Improve impermanence loss, improve gas efficiency, whether the single library model will become the next generation of DeFi economic model

In recent months, innovation in the AMM field has driven the growth of DEX. In March 2021, SushiSwap made its single treasury model "BentoBox" public, making it a kind of decentralized app store. All users can store their tokens in a single box that can be accessed through different applications. For example, assets in bento boxes can be mined on Onsen while providing flash loans, and even (in the future) provide liquidity on SushiSwap’s AMM. Similarly, Balancer launched its own single treasury during its V2 release. Balancer's contract treasury brings together all the tokens provided by the Balancer pool for centralized management. The logic of AMM is separated from the management and accounting activities of tokens. Token management and bookkeeping are carried out by the treasury, and the AMM logic of each fund pool is quite different. A single treasury can be viewed as a Lego base upon which other Lego blocks (different DeFi applications) can be built. Protocols such as Uniswap focus on building a single building block, while others such as Sushiswap and Balancer take a different approach - combining multiple building blocks. This base can securely store tokens and automatically generate profits from underutilized assets, thereby reducing opportunity costs. Developers can build directly on this base, and their decentralized applications (dApps) can connect to the underlying assets and attract more users, thereby increasing the overall utilization of the contract. Big Time Bella Zhang: From user to owner, NFT+ games improve experience: On September 1st, Big Time China Community Ambassador Bella Zhang was in the 19th issue of "HyperPay Focus" with the theme ""Into the Metaverse" series: Take you to unlock Web3.0, and talk to Metaverse popular chain games "Special AMA mentioned: Compared with traditional games, NFT can change the ownership of game items. Players are not only users, but also owners. In the field of blockchain, senior practitioners in the game industry will create innovative and groundbreaking content. NFT helps them protect the interests of their own teams while benefiting players, so that they can get more rich experience. Just like the games on Steam, good gameplay and more power, sophisticated and open games will become popular in the future. [2021/9/1 22:51:51] The way of DEX is to maximize asset efficiency and profit for liquidity providers. In this article, we will try to explain how the single treasury model is optimized for this purpose. Omasake, a core front-end developer at SushiSwap, described bento boxes as a Layer 1.5 solution where everything is put into the same tokenbase. "Single treasury reduces unnecessary token transfers by allowing the holding of token balances inside the treasury, ensuring a more gas-efficient infrastructure. "Today, multiple approvals for the same token waste a lot of gas. In a single treasury, this cannot happen. Once a token is approved for use in the treasury, it can be used in all contracts built on the treasury. News | The World Federation of Diamond Bourses intends to use blockchain technology to improve the transparency of diamond transactions: The World Federation of Diamond Bourses (WFDB) held a conference on blockchain technology and supply traceability Following the special meeting, it was decided to take steps to further increase the transparency of the diamond trade. WFDB President Ernie Blom said: "WFDB has accepted the fact that blockchain will continue to exist, but it must be practical and available to every member who wants it, not just a few." WFDB has decided Get access to some blockchain experts to help develop a solution that can benefit all WFDB members. [2019/10/1] Previously, the increase in gas costs caused by the complexity of the smart order routing algorithm greatly outweighed the possible savings from the low price impact. The new model completely solves this problem and makes the price more suitable. With Balancer's new treasury, transactions do not need to be restricted by multiple fund pools. Only in the final stage will net tokens be settled between treasuries, which will save users a lot of gas. High-frequency traders can also avoid posting any ERC20 trades for short-term positions, which is especially effective for DEX aggregators. In addition, through flash loans, arbitrageurs can arbitrage between pools without holding tokens, thereby improving process efficiency and reducing capital-intensive operations. Dynamic | REX testing will improve CPU congestion: According to IMEOS reports, BM revealed in the telegram group that REX has been put into practice and is being tested. Once launched, the market will reposition the price of CPU. At the same time, he also mentioned that REX can reduce transaction costs, but it will not be applied to Block.one's wallet. In addition, some people have speculated that some "whales" are voting for bad BPs in order to profit by renting out CPUs in large quantities. BM's response was: "It's unlikely, it's too obvious." [2018/11/8] In general, developers can build dApps without considering their own gas optimization overhead. At the same time, due to Gas fees eat up less profits, and traders will be more willing to choose to trade on these platforms. The single treasury model decouples the pool's AMM logic from token management and bookkeeping, laying a solid foundation for developers. Some details can be delegated to treasury to reduce technical cost. This modular architecture enables teams to become more focused and efficient. The first dApp on BentoBox is Kashi, which leverages BentoBox assets for lending and one-click leveraged trading. Since all tokens are stored in a central treasury, it reduces the number of internal token transactions and overall gas costs. Through BentoBox and Kashi, short selling with 1x leverage can be completed in a single transaction. MISO (Minimal Initial SushiSwap Offering) is also built on BentoBox. MISO is a launch platform for founders to launch new projects on SushiSwap. MISO has created a set of smart contracts to allow non-technical people to easily launch new tokens and migrate them to SushiSwap by enabling liquidity. The functions of the smart contract include: creating new tokens for the project, locking positions, issuing and crowdfunding new tokens, mining farms for new tokens, etc. News | British port operators hope to improve shipping logistics through blockchain: According to cointelegraph, British port operator Associated British Ports (ABP) has signed an agreement with digital logistics promoter Marine Transport International to develop blockchain for port logistics. According to the agreement with Maritime International, ABP operates in 21 ports and transports 25% of the goods in the UK, and will use blockchain technology to participate in pilot transportation. [2018/9/19] Balancer’s token treasury can now serve as a launching pad for different AMM strategies and dApp innovations. Already two official partners: Element Finance: A fixed rate protocol that builds a custom transaction curve on Balancer V2 to avoid the hassle of building an AMM from scratch or the technical overhead of forking. "Element Finance needs to implement a custom transaction curve, but does not want to have the technical overhead of forking or building its own AMM. In order to avoid these problems, we choose to build on the basis of Balancer V2." - Element Finance, April 2021 Balancer-Gnosis-Protocol: Balancer partnered with Gnosis to bring to market Gnosis's DEX aggregator and batch auction, designed to reduce miner extractable value. He Ping, Tsinghua School of Economics and Management: Blockchain research can enhance social productivity and improve production relations: On April 26, the "Tsinghua University Blockchain Application and Investment Forum" was held in Beijing. He Ping, director of the China Financial Research Center of the School of Economics and Management of Tsinghua University, said that the promotion of blockchain may have a huge impact on the financial system, international trade, payment system, and corporate business models. Therefore, research on blockchain can provide inspiration for the improvement of social productivity and production relations, and provide reference for the formation of relevant policies and regulatory ideas. [2018/4/28] Both BentoBox and Balancer's treasury will allow dApps integrated into the treasury to be linked to each other, which creates synergy and network effects between dApps. At the same time, dApps bring new users to the treasury, allowing TVL and contracts to grow. The pool has full control over the tokens added to the treasury. This improves capital efficiency by design, allowing asset managers and dApps to be built on treasuries. After being nominated by the pool, the pool can play a role by using the underlying tokens, such as for voting, farming, lending and other purposes. Assets in BentoBox can be used to provide flash loans, even though the same tokens are also farmed in Onsen. Even if these assets are not lent out, users can still use their tokens to earn yield or LP fees. This maximizes the user's revenue at any point in time. Kashi's target utilization is between 70% and 80%. This utilization rate is defined as the percentage of assets that are currently borrowed against total supply. It will try to do this with a flexible rate that fluctuates according to utilization. Similar to BentoBox, assets in the Balancer treasury can also be used for flash loans. Additionally, the first Balancer V2 asset manager built in partnership with Aave enables idle assets in the V2 pool to earn Aave. This picture depicts the fact that when only a small percentage of assets in the liquidity pool are being traded, most assets are sitting idle in the liquidity pool. Large trades may fail as the pool asset ratio becomes more unbalanced over time. When this happens, the asset manager will automatically replenish the pool with DAI and send more WETH to Aave to maximize yield. Currently, only a small fraction of TVL is being productive in AMM. We expect the liquidity utilization metric (as a percentage of yield-generating assets) to increase substantially with the implementation of asset managers in single treasuries. When all assets are in one treasury, the risk of smart contracts will increase due to the complexity of the system. While both the Balancer and SushiSwap teams have put a lot of work into the security of funds, this innovation represents a degree of risk. In particular, dApps and asset managers have greater authority over the assets of the treasury, and the complex logic involved should be carefully reviewed. "The innovation of BentoBox lies in its scalable design. Its vectorial design allows BentoBox to become the DeFi infrastructure on SushiSwap in the future. What is different from other contracts is that it creates a main source of liquidity that any user can use to Minimum approval, minimum gas consumption, and maximum capital efficiency to use." - SushiSwap, May 2021 In addition to obtaining various benefits from the treasury, an important factor to consider is that it creates a competitive environment for integrated protocols moat. In DeFi, this advantage is difficult to obtain, due to the complexity of the protocol, which makes it almost impossible for the protocol to fork and be copied. Imagine that Yearn and SushiSwap are in the same treasury. The combination of these protocols becomes the entry point for user funds participating in DeFi to generate continuous income. This will also increase market barriers and prevent other upcoming DEXs from eroding the market share of SushiSwap and Balancer. In this transition, it can be seen that SushiSwap and Balancer are targeting passive liquidity providers, as a large number of active-zce liquidity providers flood UniSwap V3. For retail liquidity providers looking to passively manage their liquidity, SushiSwap and Balancer are good choices, while Uniswap will offer a more active-zce strategy to attract more sophisticated investors. If the single vault model lives up to its vision as a passive liquidity provider, a mass migration of assets should come as no surprise. (DeFi Castle built by Money Lego) Using Lego as an analogy, SushiSwap and Balancer regard AMM as a Lego component on the ecosystem. Borrowing from Polygon and actively incentivizing established DeFi protocols such as Aave and Curve to deploy it on the L2 platform, the next step is to incentivize more other Lego bricks to build on top of the Lego base — Fill the base with countless pieces of LEGO. Over time, the structure can become more complex through cooperative integrations, achieving an impenetrable moat for SushiSwap and Balancer. Lego bases will be a solid foundation for building DeFi castles.

Tags：

DOT