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Golden Observation丨How to create an "entry track" for institutional DeFi needs?



The potential impact of cryptocurrencies on traditional finance (TradFi) and institutions has become a hot topic in recent years. Blockchain technology has introduced automation into the financial industry, bringing disruption and innovation, especially the recent emergence of decentralized finance (DeFi) that has aroused great attention in the industry. However, many institutional users still believe that this field is full of risks, so whoever can create an "entry track" for institutional DeFi needs will be able to take the lead in the market. For individuals or companies, no matter what type of financial management model you use, any market participant must evaluate his own risk tolerance. However, the operations of traditional financial institutions are usually relatively complex, so risk management is particularly critical and challenging for institutions. Drag into the water". More importantly, since business operations cannot avoid the "debt problem", they need a more stable cash flow. As long as the income flow becomes predictable, the company can better formulate financial plans, which in turn will help promote and deploy long-term development strategy. Fixed income, on the other hand, is critical to corporate wealth management. In the traditional financial industry, companies and wealth management institutions can indeed eliminate some risks by using fixed-income instruments such as government or corporate bonds to ensure that their investments are safer and more predictable. But in fact, solving the problem of fixed income has become one of the monetary policy strategies formulated by many governments. For example, the Federal Reserve has chosen to lower interest rates several times in 2020, and finally lowered the interest rate to 0-0.25%. And low interest rates will have a negative impact on bond yields, causing large companies to explore other channels to obtain income, but they have to pay various fees to intermediaries when investing, even in today's advanced information technology, Financial intermediary fees are still ridiculously high. Therefore, for wealth management institutions, it is more meaningful to obtain small but regular returns through low-risk investment vehicles. On-site | Jinse Finance presented the "2019 Most Technologically Innovative Public Chain" award. A total of 13 companies won the award: On December 27, 2019, the "Creation with the Times" awards ceremony hosted by Jinse Finance was held in Beijing. Jinse Finance "Created with the Times" selected the most technologically innovative public chains in 2019. After the selection by the judges, Conflux, TRON, Bytom, Huobi Chain, NEO, Cocos-BCX, IOST, Ontology, Qtum, QuarkChain, AELF, Metaverse DNA, and BHD won the "2019 Most Technologically Innovative Public Chain" award. This event invited more than 100 well-known blockchain companies at home and abroad, more than 300 industry leaders, representatives of many industry upstream and downstream service agencies and other industry celebrities to witness the awards ceremony. Jinse Finance's "Co-creation with Time" activity invited more than 40 senior industry experts as a professional selection team to conduct a comprehensive review in combination with online voting. Through different awards, each company's efforts to realize the empowerment of entity innovation and lead the future development of the industry will be evaluated. Commendation, realize the joint exploration of blockchain with the times, and create a beautiful blueprint for the industry. [2019/12/27] The advantage of decentralized finance is that, unlike traditional financial services, it does not require the participation of many intermediaries, so the costs incurred by these intermediaries will not be passed on to users, which can effectively reduce this part cost. Second, while the traditional financial industry is struggling to find high-yield solutions, the benefits of decentralized finance are rising sharply. Since Compound introduced the concept of liquidity mining, the yield and total locked-up volume (TVL) of the niche market of decentralized finance have soared. When the decentralized financial market was at its peak, some platforms could even obtain dozens of times the investment income. Although it is debatable whether this high-growth state can be sustained for a long time, it at least highlights the Great potential in terms of income. Market | Gold disk: The trend of BTC is unknown and the market fluctuates accordingly: Analysis of the gold disk: Gold exclusive analysis: In the past 24 hours, BTC has weakened again, causing the major currencies in the market to fall into a consolidation trend, but the overall amplitude is not large, and the rise and fall are within 1 %about. Short-term funds are scarce, and the market trend is unclear. Remind investors to view market fluctuations rationally and do a good job in risk control. [2018/10/22] Therefore, the huge potential of decentralized finance makes it stand out from the traditional financial industry worth trillions of dollars, and some investment banking experts have already developed a strong interest in cryptocurrencies even before the price of Bitcoin rose . Nevertheless, the current decentralized financial ecosystem is not so mature, such as unable to provide fixed income, and adding cryptocurrencies to the investment portfolio means that investors have to take significant risks, because the price volatility of cryptocurrency assets is usually large , there are still many institutions whose needs cannot be met and so on. Therefore, before large companies flood into the cryptocurrency industry, many traditional financial industry primitives must be "transplanted" into the blockchain field. Is it a good idea to classify risk levels? Take the BarnBridge project, which expands the functions of decentralized finance and improves the flexibility and efficiency of decentralized finance, as an example. It provides financial products and services to support and assist institutional client activities in some key areas of cryptocurrency, such as risk management and fixed income instruments. It can be said that this project has created an "admission track" for the growing institutional needs. In the future, institutions only need to follow this "track" to smoothly enter the decentralized financial industry. Analysis | Golden disk: The VET/USDT rebound has encountered resistance, and the bearish trend has not changed: Comprehensive analysis of the golden disk: The VET/USDT rebound has encountered resistance at 0.008, and the bearish trend has not changed, pay attention to downside risks. [2018/8/15] We found that BarnBridge divides encryption risks into multiple "buckets", so-called risk levels, so that market participants can invest in various products or assets according to different risk profiles. These types of "buckets" are: low-risk (priority) "risk buckets"; medium-risk "risk buckets"; and high-risk (inferior) "risk buckets". This kind of grading is actually BarnBridge carrying out the floating income of the original decentralized financial liquidity mining according to the level of risk, providing high income for those who can bear high risks, and stable income for those who can bear low risks. A realization of a mature product in traditional finance in decentralized finance. Before the emergence of BarnBridge, no wealth management company could obtain fixed income in encrypted assets with the support of decentralized financial platforms, because these platforms could not guarantee the final return. If it cannot bear the corresponding responsibility, its business will also be damaged; on the other hand, if the rate of return suddenly rises sharply, this wealth management company may also be unable to ensure that stakeholders receive additional returns, because traditional financial companies usually put "safety "Sex" in the first place, they are less daring to try to take risks and invest in some high-yield assets. And when BarnBridge appears, they can put funds into the SMART income bond pool on BarnBridge. When wealth management managers invest in Pool Funds, they will designate a "risk bucket". After the wealth management manager provides liquidity to the fund pool, he will receive ownership tokens representing different "risk bucket" levels. The low-risk "risk bucket" allocates priority tokens, and the high-risk "risk bucket" allocates inferior tokens. In addition to serving as proof of liquidity provided to the fund pool, these tokens themselves are also tradable, and wealth managers can exit positions by selling the corresponding ownership tokens before the fund pool expires. Golden Finance live report Chen Haozhi, CEO of Touch Technology: Digital asset-driven game mode can change the game industry: Golden Finance live report, at the GMIC Global Blockchain Summit, Chen Haozhi, CEO of Touch Technology, pointed out that in today’s highly concentrated resources, many users Concentrated on a limited platform, the cost of user acquisition continues to increase, and the game industry faces the problem of inconsistent interests between users and developers. The biggest change brought about by the blockchain is that characters and props can be tokenized, can be separated from the game, and can cross games. As long as the props and characters are valid, they have value. Therefore, the new game model driven by digital assets brought by the blockchain may change the game industry. [2018/4/27] In contrast, the interest rate of priority tokens is fixed, so the volatility of the income of priority tokens will be relatively stable, which can basically provide investors with fixed income; inferior tokens The interest rate is fluctuating. When the income is high, the income of inferior tokens will be higher, but when the income is low, the income of inferior tokens will be lower. More importantly, in addition to priority tokens and inferior tokens, the protocol also has a native token BOND, which can be used for pledge and governance. With priority tokens, wealth management managers will be the last to take risks. If the rate of return of the fund pool is lower than 5%, then BarnBridge will use inferior tokens to "supplement" the priority token holders rate of return. But if the rate of return of the fund pool is very good, then the holders of the inferior tokens will earn more than the holders of the priority tokens, and then there will be a gap between the priority tokens and the inferior tokens. a balance. Currently, BarnBridge is connected to Aave and aggregates the platform's revenue through its smart contract. When the fund pool expires, BarnBridge will distribute the revenue according to the investor's purchase share. Today, some traditional financial institutions have begun to add cryptocurrencies to their balance sheets. However, the stability of such assets is still difficult to satisfy traditional financial institutions. However, with the introduction of BarnBridge, institutions can better control related risks , In addition, the project will allow these institutions to "forgive" some potential benefits in order to better predict cash flow. Jinse Finance live report ALAX founder Feng Wenhe: No matter how advanced the technology is, there is no model and no product, it is actually empty talk: Jinse Finance live report, at the 2018 Blockchain Technology and Application Summit, ALAX founder Feng Wenhe said: "I When I came into contact with blockchain technology in 2016, the whole person became very excited. We all say that technology serves the model, and no matter how advanced the technology is, there is no model and no product is actually empty talk.” Feng Wenhe said that by 2020 The scale of cross-border e-commerce for import and export will reach US$1 trillion, but cross-border settlement still faces four major challenges: 1. High cross-border costs-an average of 10% to 70%; 2. Long transaction time-long account period 6 months; 3. Unable to conduct transactions - 2 billion people without bank cards; 4. Low efficiency, monopoly and high cost. [2018/3/30] How to fill the regret that the DeFi ecosystem cannot provide investors with low-risk fixed income services? If a company chooses to directly purchase cryptocurrencies on cryptocurrency exchanges such as Coinbase in order to gain exposure to cryptocurrencies, the risk cannot be avoided. Once the price of encrypted assets plummets, the company will bear the brunt of losses. In contrast, BarnBridge can control potential losses through "risk buckets", that is, priority tokens/inferior tokens. Assuming that the company deposits funds together with other users' ETH in the BarnBridge SMART alpha bond pool to purchase priority tokens, it means that the company only needs to face 30% of the ETH token risk exposure. The company's funds will be kept in a fund pool until it expires. After the expiration, the smart contract will automatically sell ETH and convert it into a designated encrypted asset, and distribute the income according to the risk level. To be more specific, if the company spends $100 to purchase ETH when the fund pool is formed and puts ETH into the fund pool, if the asset price of ETH rises to $110 when the fund pool expires, then the company will start from $10 If the ETH asset price falls to $90 when the fund pool expires, the company's loss is only $3 instead of $10. Most importantly, if the company wishes to liquidate its crypto assets to pay for its own daily operating expenses before the fund pool expires, it is also feasible, because these priority tokens / inferior tokens are all tradable. In addition, all interactions between users and BarnBridge are automated, which not only eliminates the need for intermediaries, but also makes BarnBridge services cheaper than traditional financial alternatives. At present, the only "headache" may be the scalability problem of Ethereum itself, which may lead to high transaction costs. Today, we are pleased to see that BarnBridge has effectively filled the regret that the decentralized financial ecosystem cannot provide investors with low-risk fixed income services. However, for traditional financial users, decentralized finance still cannot fully convince them. Even though fixed-income instruments can help investors avoid high risks to a certain extent, these instruments are not completely risk-free. For example, once the cash flow of a company or the government suffers from an inflation crisis, it may lead to failure. Although BarnBridge has introduced low-risk fixed-income instruments into the decentralized finance industry, some institutions still believe that the risk of the decentralized finance industry is too high. In addition, the platform’s smart contracts may also have bugs like other protocols. For example, the recent decentralized financial protocol Harvest was attacked by flash loans due to application logic problems, resulting in multiple contract transactions being successfully cashed out by hackers for about 24 million US dollars. Not only that, BarnBridge also faces the problem of insufficient liquidity of the fund pool itself, low income or insufficient liquidity of the connected trading platform. Of course, the advantages of BarnBridge are also obvious. The project is the only solution that provides fixed income in the entire decentralized financial industry. At the same time, it can also smooth fixed income and ultimately improve the efficiency of the entire system. It is worth mentioning that the BarnBridge team also has good contacts in the cryptocurrency industry. They are also maintaining in-depth communication and exchanges with many influencers in the decentralized financial industry. Warwick, who enthusiastically introduced the BarnBridge project to the decentralized finance community on Twitter. Not only that, the attention of the encryption community to BarnBridge is also growing naturally.


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