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Toutiao Youyao Issue 4 Huang Lianjin: The overall ecology of DeFi is still expanding



At 20:30 on September 17, 2020 in this issue of the newsletter, the fourth issue of the blockchain headlines special interview column "Toutiao Youying" invited Huang Lianjin, an expert member of the blockchain branch of the Chinese Institute of Electronics, to be a guest in the live broadcast room. The live broadcast of this issue is based on " Talking about DeFi's Opportunities and Challenges" as the theme, Huang Lianjin shared the future development logic and key trends of DeFi, the risks and challenges facing DeFi, and mentioned that DNA will gradually deploy the DeFi field. do well. Huang Lianjin said: DeFi has a very broad prospect and is an important part of the future financial ecology. The first requirement for the development of DeFi is security. It is necessary to pay attention to the security of smart contract codes, the security of token economy design, and the security of supervision; the second requirement is to integrate with the real world and integrate with artificial intelligence, big data, cloud computing, 5G , the Internet of Things together form a new digital economic foundation. Detailed Interviews Topic Sharing Everyone is very interested in DeFi. DeFi itself is the so-called decentralized finance or open finance, and it has two most important attributes. One is decentralization, and the other is finance. These two are its characteristics, and they also make full use of some attributes of the blockchain. In 2017, DeFi already had some projects, and everyone has heard more about them now, such as Uniswap. Also, MakerDAO has already started in 2017, and it is gradually becoming popular this year. It has a fuse, and this fuse is the so-called mining-Compound loan project. It uses the governance currency, the so-called Governance Token, as a currency. If you participate in its ecology, for example, if you lend money, or you borrow money from it, you can get its governance currency. Mining itself will not trigger DeFi. The internal logic behind it is that many central banks, mainly the US Central Bank, issue coins without limit. Big corporate bonds, and economic stimulus plans. So at the peak, the assets locked in the DeFi ecology once reached 9.6 billion US dollars, and there have been some adjustments recently. Some key terms we need to understand include automatic market maker (AMM), and DEX, decentralized exchange, Lending products, derivative products, prediction markets, distributed insurance, etc. generated by over-collateralization. Binance announced that it has supported GLMR as a loanable asset: Jinse Finance reported that according to Binance’s official news, its Binance Loan platform has added Moonbeam and Kusama parachain Moonriver’s native Token GLMR as a loanable asset. [2022/10/8 12:49:32] You may have heard more recently, the so-called liquidity mining (liquidity mining) and yield farming (Yield Farming), liquidity mining is to lock assets in a The behavior of the platform to provide liquidity to get rewards. Spread harvesting is a behavior of arbitrage by using different rewards provided by different platforms to transfer liquidity through smart contracts. Both mining methods are marketing practices. In addition to increasing traffic, beneficial and cold start, and possibly increasing consensus, it does not bring other value to DeFi. Another basic concept of DeFi at present is fair start. Its basic features are four "no"s: founder bonus, no pre-mining, and no VC. The coins you dig out are worthless, and you can only mine , Don’t buy it, this is one of its slogans, but in fact, because of the support of the exchange, everyone bought it in the end. Then under this concept, it is extended to the so-called Sushiswap, which everyone has heard a lot, that is, using the vampire mining method to increase liquidity through mining, and then through the so-called migration, the liquidity is transferred from Uniswap Moving to Sushiswap, this method is called vampire mining, which sucks blood (liquidity) from the original platform to the new platform. DeFi also has other different platforms, including insurance, prediction, NFT, and derivative products on it. At present, there are also many projects mainly through the method of forking DeFi. Forked on the original project, it has several forked logics. The first is the logic of mining, such as the duration of mining, the reward multiple for participating in early mining, the total number of coins issued, and so on. Another logic is the ratio of dividends between LP Token and governance currency. For example, SusiSwap gives 0.5% of the 3% transaction fee of platform revenue to governance currency owners, and the other 2.5% to LPs. Another fork logic is to pass the security audit. Generally speaking, coins that have not passed the security audit are definitely not safe. Another fork logic is to have a good relationship with the head centralized exchange to promote the project. U.S. stocks change Blockchain concept stocks dive: April 5 news, blockchain concept stocks dive, Marathon Digital fell more than 7%, Bit Digital fell 6.87%, MicroStrategy and Riot Blockchain fell more than 5%, Coinbase fell 4.66%, the district Block chain ETF BLOK fell 2.77%. (Gelonghui) [2022/4/5 14:05:54] Then, of course, there are some recent ones that increase some TPS not through forking the original currency, but through cross-chain methods, and Reduced transaction fees, privacy protection, and more. Well, there are also some public chains. Seeing that the ecology on Ethereum is doing so well, they are also eager to try. For example, TRON, Polkadot, Cosmos, and DNA are also working hard to build an ecology on this. Of course, DeFi still has some difficulties at present, that is, the gas fee is relatively high, and it is also relatively congested. The number of participants is not many, mainly some large investors are participating. Because if you only invest a few thousand dollars, or even less than 10,000 dollars, if you participate in mining, the gas fee is often not enough for you to earn money. In addition, its user interface is not friendly enough, especially for automatic market makers, which has the problem of slippage, that is, if you want to buy or sell coins, if the quantity is too large, if you want to keep its original ratio, the price will be lowered. A substantial increase will cause slippage, that is, there is a gap between the price you originally imagined and the final transaction price, which is slippage. There is also impermanent loss. The impermanent loss is because if you provide liquidity to participate in mining, if the price of the currency fluctuates greatly, it will increase opportunities for those arbitrageurs and suffer losses as a liquidity provider. Let me give you an example, such as Ethereum, when you first participated in mining, it was 200 US dollars per Ethereum, and then the market price of Ethereum increased to 400 US dollars, if you did not participate in mining, you would have doubled your income, but You participate in mining, and this increased price is taken away by arbitrageurs. Some people who have participated in mining will definitely feel it very much, that is, if the price fluctuates greatly, this impermanent loss will be very serious and may become a permanent loss, especially if one of the coins returns to zero, the liquidity you provided Sexuality may also be zeroed out. In addition, the cross-chain mechanism is not mature enough. The ecology of Bitcoin is gradually increasing, but it has not really diverted the value of Bitcoin into DeFi, because even if DeFi is to really develop, it must play a large number of Bitcoin. Assets, so if this is revitalized, DeFi can be developed. ZigZag: zkSync’s TVL currently ranks fifth in Ethereum L2, and will launch the NFT market: Golden Finance News, recently, ZKRollup-based order book DEX ZigZag said on Twitter that according to L2BEAT’s data, zkSync’s TVL is in It has increased by 85% in the past 7 days. In the case of excluding Loopring and Boba Network’s native tokens, zkSync’s TVL currently ranks fifth in Ethereum L2. At the same time, ZigZag announced that it will launch the NFT market and continue to expand its TVL share. [2022/3/23 14:13:35] The mechanism of the community is not mature enough. There are various methods of community autonomy, but they are not mature enough. Everyone is exploring, and now the overall participation in DeFi is currency There are still not many new forces in the circle who have experienced ICO, IEO or old people. The most important issue is security. DeFi is a financial application, and security is the primary issue. In addition, DeFi needs to be combined with the real world. This requires how assets are chained and decentralized digital identities. In addition, the current DeFi project threshold is relatively low. Compared with the original public chain project, you need cryptography experts, the team of the underlying chain, and the operation group, etc. In DeFi, one person can often use the Lego method of smart contracts to write big part of the code. For example, YFI, and Sushiswap, it is enough for one person to write most of the code. The start-up cost and threshold are much lower than those of public chain projects, so the threshold is low, and because it is decentralized, all people who participate in mining will dig the first mine. Why is head mining so good? It is equivalent to participating in mining first and then withdrawing the coins, and then selling them, you will gain, but the people who participate later will not, so this is equivalent to transferring capital from one mine to another, so it is impossible There are long-term possibilities. This is similar to the previous trading that is mining. You may have heard that FCoin was very successful at the beginning. Later, all the exchanges started trading and mining, so users switched from this exchange to another exchange, and in the end trading and mining were unsuccessful. I personally think that mining in DeFi is also a phenomenon. It is difficult for it to last for a long time. In the end, it depends on the combination with the real world. This is one point. In addition, there must be a large amount of community consensus, both of which are indispensable. Data: Shiba Inu has rebounded 30% in the past 3 days, and 64% of holders are in profit: December 7 news, the market shows that during the recent market sell-off, Shiba Inu (SHIB) lost about 35% of its previous gains value, but has now recovered 30%. According to previous news, the Shiba Inu whale has sold $400 million of its holdings, but has repurchased about $100 million. While holders of Shiba Inu experienced a massive correction, losing over 60% of their token value, according to IntoTheBlock's metrics, most holders are still making money. Currently, a total of 64% of Shiba Inu holders trade or hold tokens for profit, while less than 30% of traders are at a loss. 7% of holders break even. (U.Today)[2021/12/7 12:56:52] 01 Ms. Toutiao: Blockchain This year, many DeFi projects have emerged and successfully created a wave of DeFi in the currency circle. Can you introduce it to us? Next, the future development logic and key trends of DeFi? Huang Lianjin: The future development logic depends on the present. I just talked about liquidity mining, through the so-called governance currency, and a fair start. A better development logic here is not mining, but a fair start, that is, Fair Launch, which is a more important point. Because to achieve decentralization, there must be a financial attribute. The blockchain itself has financial attributes, global attributes, and fair attributes, which is the so-called decentralization. Applying these attributes to DeFi is a long-term development logic. Of course it also needs to be combined with the real economy. If the circulation is only carried out within the currency circle, this development will be limited. Some people are also trying, such as combining with Oracle oracles to divert data and assets in the real world into the blockchain, and for example combining with DeFi in insurance and supply chain finance. combined with the real economy. Therefore, the future development trend is to be safe first, and to integrate with the real world second. We mentioned the new digital economy. The new digital economy is based on blockchain, artificial intelligence, Internet of Things, big data, cloud computing, and 5G to digitize existing business processes and workflows, and then use blockchain technology to transform them. This is DeFi , or some key trends in the development of the entire blockchain. Golden Evening News | List of important events on the evening of November 29: 12:00-21:00 Keywords: Michelle Ice City, Invesco, WisdomTree, Metaverse Trademark 1. Michelle Ice City applied for multiple Metaverse trademarks; 2 . Minister of Finance of India: There is no proposal to recognize Bitcoin as a currency; 3. Invesco Invesco launched a bitcoin ETP supported by cash; 4. The Standing Committee of the Shanghai Municipal People's Congress: Support Pudong New Area's innovation and integration of blockchain and other technologies; 5. Asset management The company WisdomTree has launched three encrypted currency ETPs in Europe; 6. Thought Machine, a cloud banking start-up company, completed a financing of US$200 million, led by Nyca Partners; 7. TrendForce: Industrial Metaverse will drive the global smart manufacturing market to $540 billion in 2025. [2021/11/29 12:39:29] 02 Ms. Toutiao: DeFi can be said to be the hottest topic in the public chain circle in 2020. Can DeFi become the foundation of the next generation of finance? What is the current layout of DNA in this field? Huang Lianjin: DeFi is an important part of the future financial ecology. I mentioned at the Shenzhen Global Architects Summit last year that blockchain, as the new financial infrastructure of the next generation of finance, did mention DeFi. At that time, I mentioned that there were several requirements, that is, DeFi must have "De" There is also the aspect of "Fi". Decentralization means fairness and justice, self-certification, global attributes, and new traffic. This is the aspect of "De". The aspect of "Fi" is that it has some financial applications, including key applications such as financial transactions, lending, financial derivatives, and insurance. As the foundation of the next generation of financial facilities, it really needs to be combined with other foundations. At the World Economic Forum in Davos in January this year, I also proposed that the blockchain should be combined with artificial intelligence, big data, cloud computing, 5G Internet of Things, and together form the basis of a new digital economy, in which DeFi is a very important component part. The overall layout of DNA is under the leadership of Brother Hu, and DNA will gradually deploy in the DeFi field. Let’s wait and see.


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