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Golden Observation丨What kind of stable currency can deeply optimize DeFi?



Golden Finance Blockchain, October 12th. Nowadays, a large number of functions and protocols that support income farming and mortgages have emerged in the DeFi industry. Cryptocurrency holders can exchange income by mortgaging their digital assets. The attractive returns have led to this Many projects in the field have achieved explosive growth, and each project has its own exclusive governance tokens, distribution strategies, and mortgage agreements.

However, the "token mortgage model" will complicate the way DeFi users acquire digital assets, because once digital assets are mortgaged, they cannot be used anywhere else, nor can they be converted. For example, if a user has already mortgaged a digital asset, but later wants to exchange another digital asset for mortgage, then they have to withdraw the digital asset from the original mortgage position first, and then complete another digital asset exchange transaction to mortgage again. This series of operations will make the user pay a costly gas fee, and it will also damage the user's potential chance of earning rewards.

Golden Morning News | November 1st Overnight Important Updates: 21:00-7:00 Keywords: BSN, BitMEX, Ropsten, Filecoin

1. The BSN network has completed the quarterly version iteration yesterday, including the launch of the BSN permission chain test network;

2. Foreign media: BitMEX executives transferred 440 million US dollars from the exchange after learning that they would be investigated by the government;

3. Ethereum developers: The Ropsten testnet was attacked by 51% this week;

4. Acting Director of the U.S. Office of the Comptroller of the Currency: Bank of America is studying whether to support Bitcoin and encrypted assets;

5. Juan, founder of Filecoin: Filecoin's mainnet release brings the ability to make large-scale applications a native feature of Web 3.0;

6. The Swiss town of Vizkon will use blockchain technology to support SMEs affected by the coronavirus. [2020/11/1 11:21:20]

From this point of view, although income farming can bring high returns to users, it is still relatively complicated to operate, and with the surge in liquidity mining and mortgage transactions, the gas costs of Ethereum continue to rise, and many users’ pain points have emerged On the surface, such as the difficulty of changing positions and the cumbersome exchange of digital assets. Although several solutions have been proposed in the decentralized finance industry, most of them are still not ideal due to high fees and difficult management, which also makes it difficult for yield farming and staking to be accepted and adopted by the mainstream.

Golden Morning News | March 14 Overnight Important Updates: 21:00-7:00 Keywords: Trump, New York State, 6G, Ethereum transaction fees

1. Trump declared a "national emergency" in response to the new crown pneumonia epidemic.

2. New York, USA requires Coinbase, Ripple and other 18 encryption companies to submit new crown virus prevention plans.

3. Secretary of the Jiangsu Provincial Party Committee: Vigorously develop cutting-edge industries such as blockchain and new formats and models.

4. Sichuan Province promotes service industry enterprises to develop "stay-at-home economy" with the help of blockchain.

5.6G Concept and Vision White Paper: Encourage industrial chain enterprises to focus on breakthroughs in key technologies such as blockchain.

6. Bitcoin core developers are modifying the network replay logic to improve privacy.

7. Ethereum daily transaction fees hit $564,000 this Thursday.

8. BTC is now at $5,693, up 2.50% in the past 24 hours, with a market value of $103.9 billion. [2020/3/14]

In fact, the centralized finance industry has always hoped to have a powerful stablecoin that solves the above problems in a cheap, intuitive, and user-native way. Now, if elastic supply and yield farming are integrated into cryptocurrencies in a native way, these problems may be effectively solved.

Golden Morning News | A list of important developments at night: 1. The general manager of the Bank for International Settlements urged central banks to adopt digital currencies;

2. The zero phase of Ethereum 2.0 is entering the final stage of testing and is expected to launch the zero phase mainnet in early 2020;

3. MakerDAO adjusted the DAI debt limit to 95 million pieces;

4. The new anti-money laundering and terrorism regulations of the Brazilian Securities Commission may affect cryptocurrency-related companies in Brazil;

5. State Street Bank: 38% of customers will invest more funds in digital assets by 2020; The beta version of the Voice social networking platform will be launched on Valentine's Day next year;

7. New York Digital Investment Group was approved by the US SEC to create a new type of Bitcoin futures fund. [2019/12/7]

Take the decentralized platform Origin Protocol as an example. This protocol natively integrates the core income farming function into stablecoins, and solves the pain points of centralized financial users in managing income farming while increasing the use cases of stablecoins. Users can deposit basic stablecoins into the Origin smart contract to mint stablecoins, and then the protocol will invest the basic stablecoins in multiple centralized financial protocols and perform income farming to earn returns for holders. The value proposition of this stablecoin is to earn substantial passive income for its holders.

Golden Finance Exclusive Analysis China's blockchain industry is indeed leading in blockchain technology: Golden Finance's exclusive analysis, the US "Forbes" business magazine website recently published an article "China's Blockchain Has Achieved a Breakthrough Lead". The Financial Times previously reported that more than half of the 406 blockchain-related patents submitted to the World Intellectual Property Organization (WIPO) in 2017 were from China. It is understood that China has applied for a total of 225 blockchain-related patents, followed by the United States (91) and Australia (13), which is 2.5 times the number of the United States. Among the countries that have applied for patents related to blockchain technology, China ranks first. The advantages of patent submission also seem to indicate the development momentum of the domestic blockchain industry. [2018/5/7]

Unlike most digital assets that respond to changes in value by adjusting the price of the asset, this stablecoin responds to changes in value with an elastic supply that readjusts the token supply and the amount of currency in each user’s wallet in response to changes in value,” imitating "It has changed the experience of traditional bank accounts allowing users to earn interest through deposits. Origin Protocol will distribute income to token holders according to the "face value" of the stable currency. At present, its liquidity mining strategy is only based on Compound, and it will be expanded to more in the future after the security and construction volume of smart contracts are verified. and many other agreements. It is expected that after adopting the new strategy, Origin Protocol’s yield mining income should soon reach double digits.

Today, one of the most painful things for centralized financial users is that they need to pay expensive Ethereum gas fees when transferring mortgage positions. Through the stable currency of the Origin Protocol platform, users only need to deposit it in their wallets to receive funds from multiple centralized platforms. Earn income in financial agreements, transfer easily and without paying fees. This is because a series of smart contracts on Origin Protocol will deploy basic stablecoins to various centralized financial protocol combinations, such as Compound, Aave, Balancer, and Curve, and the liquidity pools in these DeFi protocols will evolve over time. Grow with the passage of time and decentralized governance, and then the rewards will be converted into stable coins and distributed to holders.

Not only that, Origin Protocol will also update the yield rate of the centralized financial agreement connected to the smart contract in real time, ensuring that the user's basic assets are allocated to different liquidity pools in the most profitable way, thereby maximizing the number of stablecoin holders of passive income. Crypto users can get a "native" centralized financial experience through Origin Protocol. They only need to hold a stable currency to enjoy the benefits of liquidity mining, even without collateral. It is worth mentioning that, while launching stablecoins, Origin Protocol also launched e-commerce platforms and decentralized online merchants “Dshops” on the blockchain that are similar to services such as Brave, Kyber Network and Solana.

The ultimate goal of Origin Protocol is to become a fully decentralized protocol governed by stablecoin minters and holders. However, in order to ensure that the security and efficiency of smart contracts are better verified, Origin Protocol will still be governed by the founding engineering team in the short term. They will be responsible for performing smart contract audits and stress testing; setting a 48-hour lock-in period for all pending protocol work to ensure the community has sufficient time to process and respond to protocol updates; and fully enforcing the initial strategy.

In order to achieve the goal of fully decentralized governance, Origin Protocol will implement fully decentralized governance in four steps, including the ongoing engineering team responsible for the overall management and supervision of the protocol, and responsible for the protocol architecture. Strict testing; and then creating privileges for stablecoin value creators in protocol governance; then deploying governance contracts and further assigning governance privileges; finally launching a fully decentralized governance contract and revoking the ownership of the Origin team contract. All of these decisions will be executed through governance contracts, and the Origin community will have collective ownership of all contracts.

It can be said that Origin has solved all problems for users by building decentralized financial functions natively in cryptocurrencies, and helped expand the user community, allowing them to earn income from DeFi and yield farming. Users can obtain income from income farming and liquidity mining by directly holding stablecoin tokens, and there is no need to worry about problems caused by various complex operations. In addition, with an elastic supply model, a stablecoin is like a bank savings account that provides users with interest over time, earning "interest" income by increasing the supply of tokens in the wallet, which is like a powerful " "Digital analog version of US dollars" allows users to effectively earn interest and make payments on the Origin decentralized e-commerce platform.

All in all, the practice of natively building yield farming into stablecoins enhances the user experience of centralized finance, and more importantly, a series of problems such as switching positions, token team members, managing investment strategies, and expensive gas fees are all solved ! This approach offers broad prospects for the mainstreaming of DeFi and brings more benefits to the entire community.

Part of this article is compiled from Yahoo Finance


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