Layer2finance: The appearance of scaling, the future of DeFi portals

As we all know, DeFi promotes open on-chain financial activities through its composability and permissionlessness, and quickly forms a more efficient currency market through various DeFi protocols. However, from the current point of view, due to the expensive Gas fee, the DeFi world, which upholds openness and low barriers to entry, is becoming a game that seems to belong only to giant whale users. The transaction fees of different DeFi protocols can range from 50 to 200 US dollars, which discourages many retail investors, which seriously hinders DeFi from achieving the next goal of tens of millions of users. In order to solve this problem, some leading DeFi protocols are trying to seek changes by deploying and transferring to Layer2. For example, Synthetix pledged 5.3 million SNX on Optimism, accounting for 5% of its total SNX pledged in L1. Aave currently has a TVL of US$2 billion on Polygon after starting liquidity mining, but it still has US$11.5 billion on Layer1. Arbitrum and Optimism, which will be launched this summer, are also very exciting to see whether some DeFi protocols will be "factory pre-installed". But at the same time, the community also has great concerns and doubts about the fluidity and combined split of the DeFi protocol under the multi-chain multi-layer2 architecture in the future, the migration cost, the migration process, whether the corresponding supporting services and infrastructure can keep up, and other issues and technical choices. . As a new idea to solve this problem, Celer Network released Layer2.finance. Different from the first idea, the expansion method of Layer2.finance is not carried out by migrating the DeFi protocol, but by migrating users and liquidity to layer2 to realize "in-place expansion" of the existing DeFi ecology. Users transfer liquidity to the layer2.finance rollup chain by putting funds into a layer2 rollup contract. From the perspective of layer1, it is equivalent to forming a liquidity aggregation pool of multiple users. On the rollup chain of layer2, users can operate on the funds they have deposited in layer2.finance, such as putting them into lending agreements, or participating in various liquidity mining to obtain benefits. What needs special attention here is that the layer2 operation performed by the user on layer2.finance does not immediately send out the fund transfer of layer1, but only expresses a user's "willingness to allocate funds". When there are many users on layer2.finance, the same willingness to allocate funds for a period of time can be aggregated into a single layer1 fund transfer transaction through layer2.finance without trust. sum. Through a method similar to "Pinduoduo", layer2.finance has achieved the effect of allowing retail investors to share and greatly reduce costs when interacting with DeFi protocols. From a technical point of view, the main innovation of layer2.finance is the cost reduction based on layer2. From a product point of view, it has the potential to become the main portal of DeFi in the future. The open banking platform TrueLayer plans to lay off 10% of its staff, and raised $130 million last year: Jinse Finance reported that the open banking platform TrueLayer announced plans to lay off 10% of its staff. TrueLayer co-founder and CEO Francesco Simoneschi said, "We are now operating in a very special environment and challenging market conditions. Although TrueLayer is in a strong position, it is not immune to these more macro factors." TrueLayer currently provides Services include payments, payments, user account information, and user verification, and its clients include crypto companies such as MoonPay, Ramp, Revolut, Freetrade, and Cazoo. As previously reported, on September 21, 2021, TrueLayer announced that it had completed a financing of US$130 million at a valuation of US$1 billion, led by Tiger Global Management and participated by payment company Stripe. (The Block) [2022/9/16 7:01:54] In the first version, Layer2.finance uses the Optimistic Rollup architecture developed by Celer itself, and the existence of the challenge period (anti-fraud window period) leads to delays . Users may have to wait several hours before their transaction requests are packaged and sent to L1's DeFi protocol. It also takes a similar waiting time to withdraw funds from the strategy pool. However, Layer2.finance has shortened the lengthy challenge period from days to hours by simplifying state and computation. In addition, Celer State Guardian Network (SGN) acts as a distributed watchtower to monitor Layer2 status, which also adds a certain degree of security to Layer2.finance. So while the length of the challenge period is reduced, no one is taking the risk. FlickPlay launched the NFT series "FlickyGang" and reached a cooperation with The Sandbox: On April 18, Metaverse social application Flick Play announced the launch of the first NFT series "Flicky Gang". The protagonist of this series is an anthropomorphic chameleon named Flicky. Casting is expected to start in May this year. In addition, Flick Play also announced a partnership with TheSandbox, a metaverse platform. Players can use NFT as their avatar on The Sandbox and win rewards in 3D virtual games. Flick Play is a PokemonGo-style game that allows users to unlock digital collectibles, play AR games, and more through its physical interactive AR map. As previously reported, on November 2, 2021, Flickplay announced the completion of US$5 million in financing. This round of financing was participated by Lightspeed Ventures (Lightspeed Ventures), Abstract VC, LongJourney VC, etc. Angel investors include Warner co-founders ViviNevo and King Co-founder Sebastian Knutsson et al. (Nftgators) [2022/4/18 14:32:01] In addition, StarkWare has also given up the idea of independently developing "DeFi Pooling" similar to layer2.finance, and announced a partnership with Layer2.finance to jointly Research and launch the layer-2 version, which will be launched by the end of the second quarter. StarkWare is a leading zk-rollup solution company. The ZK-STARK algorithm it provides has greatly improved the scalability and product diversity of projects such as DeversiFi, dYdX and Immutable X. It is foreseeable that layer2.finance will greatly improve after joining the StarkWare ecosystem. enhance its competitiveness. YFX founder Math Teacher: YFX will soon conduct contract transactions on layer2: According to official news, YFX founder Math Teacher forwarded the official tweet about "YFX will soon conduct contract transactions on layer2". Transaction fees, support for faster transaction speeds, and lower thresholds for derivatives transactions. YFX is a cross-chain decentralized perpetual contract trading platform based on Ethereum, Tron, Binance Smart Chain, Huobi Ecological Chain, OKEx Public Chain, and Polkadot, providing up to 100 times the perpetual contract trading BTC, ETH, etc. assets. Previously, YFX Genesis Mining (Phase 1) has been successfully completed on the three public chains of TRON, Heco, and BSC, and Genesis Mining (Phase 2) will also announce detailed rules in the near future. [2021/3/17 18:53:20] We believe that it is reasonable for Layer2.finance to use Optimistic Rollup to develop itself in the first version, because Optimistic Rollup is launched quickly and the later iterative upgrade is more flexible. Although ZK Rollup has a shorter challenge period than Optimistic Rollup, because the application scenario of layer2.finance itself requires users to wait for co-aggregation, the additional waiting time of several hours will not seriously damage the user experience, and in the user volume When it is not very large, the amortized cost of Optimistic Rollup is lower. In the future, after adding the version of ZK Rollup with StarkWare, the distribution time and withdrawal time of collective funds will be greatly reduced, thereby further enriching the application scenarios of Layer2.finance under high concurrent users, including such as aggregation transactions. The BiKi platform will launch the Korean project Klaytn at 16:00 on September 4: According to BiKi’s official announcement, Klaytn, the top Korean blockchain project, will launch on the BiKi platform at 16:00 on September 4 and open transactions and withdrawals. The net deposit activity will start at 16:00 (GMT+8) on March 2. Klaytn is a global public blockchain platform developed by Ground X, a blockchain subsidiary of South Korean Internet company Kakao. Klaytn has worked with many well-known brands around the world to create a reliable decentralized business platform. Ground X, Kakao's blockchain development arm, has officially launched Klaytn and is available for commercial use. [2020/9/2] At present, layer2.finance v0.1 (similar to the beta public test version) has been launched on the Ethereum mainnet for a week, supporting three protocols: AAVE, Compound, and Curve 3Pool, of which Compound and Curve have their own liquidity mining Function. The current total lock-up amount is $1.5M, and the number of users is 270+. According to Celer Network’s Twitter disclosure, in the first week, layer2.finance saved a total of $34,000 in gas fees for 900 DeFi transactions, with an average savings of $40 per transaction. Although there are relatively few large-scale DeFi protocols that lock billions of dollars, they are already bringing tangible benefits to participating users, showing the performance advantages of layer2.finance. YouTube channel PlayStationLive has defrauded $13,000 worth of BTC: YouTube channel PlayStationLive has launched a classic digital currency scam. The channel claims that if users send 0.1-20 BTC to a target address, they can get 0.2-40 BTC in return. now. Before the channel was taken off the shelves, it had received hundreds of thousands of views, and the final target address received 1.405 BTC, worth $13,000. (Decrypt) (decrypt) [2020/6/12] is different from many other DeFi protocols that simply pursue the amount of locked positions as a measure of network effects. Since the cost reduction of layer2.finance comes from the increase in the number of users, layer2.finance Another very important measure of is the number of participating users. At this stage, layer2.finance has not yet formed an initial network effect. There are two main reasons. First of all, layer2.finance has not yet started liquidity mining, but after the planned v1.0 goes online, layer2.finance will most likely start liquidity mining for initial user acquisition; secondly, the current online trading strategy is more Conservatively, users in other protocols (such as harvest) can obtain higher returns of the same strategy through additional liquidity mining. For a large number of more aggressive and medium-risk strategies, there is no access yet. If the above two problems are solved in the official version v1.0, layer2.finance will have a good chance to attract users through strong network effects and rich DeFi strategies that continue to increase with the market and obtain a high user retention rate. For liquidity mining, it is expected that Celer will improve the existing liquidity mining mechanism, not simply emphasizing the amount of locked positions, but also emphasizing the network effect of the number of users. The speed of new strategy access is crucial to the user retention of layer2.finance. For users, if there is a new mining opportunity, they would like to use it in layer2.finance as soon as possible. The Celer team also mentioned on the official website that they are integrating with YFI, Uniswap, Sushiswap, 1inch, Alpha Finance, DODO and Liquity, and at the same time cooperate with DeFi protocols that have not yet been launched, and have access to layer2.finance at the beginning of their launch strategy interface to expand different strategy pools as much as possible. The strategy interface of Layer2.finance can be flexibly expanded, and is not simply limited to interacting with a single DeFi protocol. For example, a strategy can include multi-protocol strategies such as Mortgage of part of ETH in Maker, lending DAI to generate interest on Curve, etc. This also enables layer2.finance to compete with aggregation protocols such as Rari Capital and Harvest Finance. But looking at it from another perspective, layer2.finance can also directly integrate with these aggregators, using the aggregators themselves as part of the strategy to reduce the cost of providing users, and provide the aggregators with unacceptable long-tail liquidity to achieve A win-win with policy aggregation protocols. Layer2.finance stands in the DeFi portal entrance market. Although DeFi portal platforms like instadapp, which are mainly user-friendly, can attract some new users, providing such a solution in layer1 actually increases the cost of gas consumption. New users are likely to be lost from the platform.

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