Last week’s year-end summary mentioned that there are only two themes in this year’s circle: one is BTC and the other is DeFi. BTC is a feast for outsiders (institutions), and DeFi is a carnival for insiders. What changes has DeFi gone through this year, and what has it become now?
Remember a few weeks ago the vernacular article " During the never-ending rapid evolution of DeFi, the skyrocketing algorithmic stablecoin is just a carnival for a few people? ", in which DeFi has made such an "intergenerational classification":
The first generation: MKR, KNC, ZRX-DAI was born, DEX entered the field of vision, the most classical DeFi!
The second generation: LEND, SNX, REN-flash loans, derivatives, cross-chain appeared!
The third generation: COMP, CRV, AMPL-liquidity mining kicks off! AMPL is here!
The fourth generation: YAM, YFI, CVP-Upgraded liquid mining gameplay! The revenue and governance aggregator appears!
The fifth generation: Hegic, LIEN, BarnBridge-high-end complex derivatives appear! The concept of graded funds and bonds is here!
The sixth generation: KP3R, COVER, AXIE-developer crowdsourcing, blockchain native insurance, games + DeFi + NFT... The
seventh generation:...
Along this line of generational classification, we can see what changes have taken place in DeFi throughout the year. It is not an exaggeration to say that whether you understand these projects and when you started to learn about them directly determines how much your earnings this year...
01
First generation: MKR, KNC, ZRX, DAI are born
DEX enters the field of vision, the most classical DeFi
MakerDAO was actually born in December 2017, but most people started using DAI for the first time in 2020. Regarding stablecoins before this, everyone seemed to only know USDT in CEX.
ZRX and KNC are the first time that people in the circle have been exposed to the concept of DEX, especially KNC, as a project that was previously "platform" by V God, has steadily increased transaction volume after 2019, and will enter explosive growth in 2020.
It can be said that 2020 is the first shot of DEX and Swap.
Of course, the current position of KNC boss has long been replaced by Uniswap , and the proportion of DEX has plummeted. In the world of DeFi, noun alternation is so rapid and cruel.
02
Second generation: AAVE, SNX, REN
lightning loans, derivatives, cross-chain emergence
The second generation of DeFi is still projects before 2020. What is interesting is that these three current star projects in the DeFi field have all experienced a painful period of struggle, and then transformed, transformed and sublimated.
AAVE, the first project called Etherlend , was a project in 2017. After going online for a while, it caught up with the 2018 bear market and almost returned to zero.
The reason is that in addition to the bear market environment, it also has a lot to do with the business at that time. The main P2P borrowing platform at the time was equivalent to a matchmaking. This model is like the earliest order book DEX. Liquidity is a huge problem . So I didn't do it at all.
On January 9th of this year, we transformed AAVE and introduced a decentralized borrowing pool model, which is equivalent to changing from the "order book" in the DEX to the "AMM pool". Then you will see the one-year myth of a hundredfold ...
At the same time, AAVE's most well-known lightning loan can be regarded as the "best reading" for understanding the charm of DeFi spike traditional finance. Readers who don't know must find the application scenarios of lightning loan (even being used by hackers).
SNX is an 18-year-old project. Its predecessor is Havven . At first, it wanted to be a stable currency. Later, it was found that this way was not working. It was transformed into a synthetic asset. The Token model was greatly empowered . It also achieved a currency price in 2019-2020 A hundred times myth.
At the same time, SUSD has become a stable currency supported by many current protocols, responding to the old saying that "intentionally inserting trees will not succeed, unintentionally inserting willows and willows".
Ren was also a project in 2018. At the beginning, the main focus was dark pool trading , but there were not many people in DEX "bright pool trading" at the time, not to mention "dark pool trading". Later, the project looked cool and immediately transformed. Make a breakthrough in the direction of cross-chain pledge and bring BTC into the DeFi ecosystem of ETH. Then it just happened to catch up with this year's DeFi high-speed train, and the currency price also skyrocketed.
Ren did not give up his original intention of the dark pool. I believe that after the DEX develops further, the number and transaction volume will increase by an order of magnitude, and the demand for dark pool transactions is believed to still exist. By then, Ren may be able to use this to boost it a second time, and say no. it is good.
03The
third generation: COMP, CRV, AMPL
liquidity mining opened! AMPL debut
Video source network
The three projects of COMP, CRV, and AMPL are in completely different periods. COMP is the borrowing leader in 2018, AMPL's Bitfinex project in 19, and CRV is the stable currency swap project in 2020.
However, the three projects were basically on fire at the same time, that is, from June to August this year. After Compound has been in operation for two years, in June this year, it officially issued a currency-"borrowing to mining", which officially set off the currency issuance of DeFi projects and the upsurge of liquid mining .
CRV followed closely, with currency issued in August, and half of the sky was supported by the income aggregator represented by YFI (most of the earliest strategies of the aggregator were stablecoin mining, and users used stablecoins to enter the CRV pool to mine and sell CRV. In exchange for yield).
After AMPL was released, it was silent for a whole year. Suddenly, the concept of Rebase became popular, and then the market value soared from several million to 600 million in just one month. It can be said that besides YFI, the myth of Hundred Times currency is the fastest. One of several projects.
Rebase has been officially understood by everyone since June this year, and countless imitation disks and improved Rebase algorithm-based stablecoins have been born, such as ESD, Basis, Frax, etc.
Interested friends can refer to the previous article " During the endless and rapid evolution of DeFi, is the skyrocketing algorithmic stablecoin only a carnival for a few people? "In the past 6 months, stablecoins have evolved 4 generations by themselves...
04
Fourth Generation: YAM, YFI, CVP
liquidity mining gameplay upgrades, benefits and governance appear aggregator
The three projects YAM, YFI, and CVP represent the changes in DeFi from July to September this year, Fair Launch, the concept of one and two pools, and aggregators.
About YFI, I have written several articles to introduce it separately . The level of understanding of YFI can be regarded as a touchstone of understanding of the entire DeFi industry, otherwise it is difficult to believe how much revenue will be made in this wave of DeFi market.
YFI can be said to have invented two terms : revenue aggregation and Fair Launch . We can see that more and more community-based projects are beginning to adopt this Token distribution method to establish early communities.
YAM can be said to be a representative project of Fair Launch after YFI , and the concept of pool 1 and 2 in the circle has been established since then , that is , pool 1 deposits a single token, lossless mining and low income, pool 2 deposits through market making on Uniswap LP Token faces the risk of free loss but high returns.
YAM itself wanted to make a Fair Launch community version of AMPL, but unfortunately because of the contract code mistakes, unlimited additional issuances caused the project to be almost aborted, and users in Pool 2 also suffered huge losses.
As we all know, there is the concept of DAO that has risen together with DeFi this year . This is why many DeFi tokens emphasize that they are governance tokens, not dividend tokens.
The concept of "pool" has fired Uniswap at the transaction level and AAVE at the generation level. Now it naturally flows to the governance level, so there is CVP.
To put it simply, the previous governance pain point-due to the small proportion of the governance token held by a single retail investor in the total circulation, its decision-making power cannot directly affect the direction of the project.
At the same time, most governance tokens cannot bring any income to users, so CVP provides a set of solutions similar to Compound by way of borrowing the platform. The governance Token is integrated into a pool through mortgage lending, which specifically provides liquidity for the governance Token, and aggregates the rights of the governance Token.
05
fifth-generation
Hegic, LIEN, BarnBridge
higher order complex derivatives appear, grade bond funds and concept debut
Hegic, LIEN, and BarnBridge are already the three projects after September this year, which can be regarded as the second half of DeFi. DeFi has entered a relatively mature period, and Wall Street's financial gameplay has been moved to the blockchain . High-end complex derivatives are the biggest sign.
These three projects are basically incomprehensible without some financial knowledge, and each one cannot be introduced in a whole article, so I will not introduce them in detail here, just make a one-sentence introduction. The previous article " DeFi can't stop! There are more detailed descriptions of all three projects in "The Financial "Building" of Ethereum is Taking Shape ", and interested readers can check it out.
Hegic-If Oypn is an order book option, Hegic is an AMM version option, just like the difference between Idex and Uniswap;
Lien-a stable currency based on ETH mortgage that does not require 150% over-collateralization of MakerDAO, but is realized in the form of risk-graded bonds;
Barnbridge is an agreement that tokenizes various volatility in the circle, and hedges various risks in the circle by establishing graded income bonds.
06 The
sixth generation: KP3R, COVER, AXIE
developer crowdsourcing , blockchain native insurance, games + DeFi + NFT
If the fifth-generation DeFi is to "blockchain" a financial model in the real world, then the sixth-generation DeFi directly uses the blockchain to build a real-world business and its own unique native business .
Take Cover as an example. In the past, the leader of the blockchain insurance industry has always been NXM. Recently, Cover has sprung up and has a tendency to "user the throne". At present, it seems that the probability of success is not small.
Nexus Mutual's contract insurance pricing is developed by a team of serious actuaries based on various parameters and determined by a special calculation formula. The parameters include the number of NXM pledged by the contract, the insurance amount, the insurance time, and so on. KYC is required to purchase business.
Cover reflects the insurance pricing in the price of CLAIM Token. The lower the price, the lower the premium. The price of CLAIM is determined by market supply and demand, that is, the premium is determined entirely through the game between users, and there is no KYC to purchase business.
Obviously, NXM is more like the blockchainization of traditional insurance, and Cover reconstructs insurance on the blockchain. This kind of blockchain-native business will be more and more in the future DeFi world. See.
For example, KP3R is a project that solves the original pain points of the blockchain. Currently, all smart contracts cannot be automatically triggered to complete the automation work.
At this point when DeFi is becoming more and more mature, DApp automation has gradually become a rigid demand. Such as liquidity mining on a regular basis, outsourcing, reinvestment, stop-profit and stop-loss, and regularly obtain trading pair quotations.
And AXIE is the representative of a new generation of chain games, which combines multiple elements such as games, NFT and DeFi, which is the new direction that blockchain games are currently exploring.
07
The 7th generation
is underway, and two directions have been seen
The 7th generation of DeFi is already in progress. According to my current observations, at least the following two directions have begun to actively explore.
1. Better algorithmic stablecoins-It is mentioned that algorithmic stablecoins have evolved for 4 generations, especially the recent SEC's prosecution of XRP. The entire circle has a mortgage type that can be destroyed by supervision such as USDT and USDC at any time. Stable coins have created a sense of mistrust.
It can be seen that funds have poured into the second, third and fourth generations of algorithmic stablecoins such as ESD, DSD, Basis and Frax recently, but the first generation of AMPL has not been interested.
As a big V in the circle said, DeFi is like a living body with a natural impulse to expand . The algorithmic stablecoin based on the original blockchain is undoubtedly a holy grail existence, depending on which project can achieve the final consensus.
No on who wins the final, it can be seen as BTC, after ETH, Block Chaining third milestone of the project in general.
2. Data stream option trading -I recently saw a project A that did not issue tokens, and has begun to design option derivatives for any data stream. What's even more ingenious is that the introduction of the Rebase mechanism, which has been extremely popular recently, has eliminated the dependence on opponents from the bottom.
For example, you are short on a data, such as the US Consumer Index, and then pledge 1000 A Token (A Token assumes one dollar at this time) into the contract, and short the Consumer Index. After a few days, the settlement day arrives. Your judgment is correct and your A Token has become 1500.
If the price of A Token is two dollars at this time, you will only take 750. If the A Token is only 0.5 dollars, then the system will give you 3000 instead of 1500 A Tokens. The extra will be automatically rebase by the system .
Theoretically, with the oracle, this project can provide option services for any data stream. And because of Rebase, this project guarantees fixed income for any option user, and eliminates the demand of the counterparty, which is equivalent to predicting the market + derivatives + Rebase.
08
Summary
In 2020, the development of DeFi is really fast. If you are not familiar with the existing 7-generation products, you need to make up lessons quickly.
The currency circle may be gradually phasing out the past tuners (except BTC). Look at the performance of mainstream coins this year, and then look at the yield of senior farmers in the DeFi circle. I think you should know what I'm talking about.
Award-winning interaction
DeFi has developed extremely rapidly in the past year. How much do you know about the projects mentioned above? Welcome to write down your opinion in the message area. The editor will put two excellent messages on top, each donating a book "Hello, Blockchain!" "One.
A book is an introduction to near-future technology, 99 entries to interpret the concept and technology of blockchain.
Previous post: OpenOcean: an upgraded version of 1inch, and more than DEX aggregator
▎Recommended reading
DeFi can't stop! Ethereum's financial "building" is gradually taking shape
Overview of DeFi head ecology: What new value does the emerging new DeFi "players" contribute?
YFI founder: DeFi makes me scared, please use it with caution
YFI 10,000 times in 43 days: its core business tells you how to play the second half of DeFi
——End——
"Disclaimer: This article is the author's independent point of view, and does not represent the vernacular blockchain position. This content is only for the popular science learning and exchanges of encryption enthusiasts, and does not constitute investment opinions or suggestions. Please treat it rationally, establish a correct concept, and increase risk awareness. The copyright of the article and the final interpretation right belong to the vernacular blockchain. 』
Dear, it is said that 99.9% of interesting people have ordered "Watching"????