Although the DeFi bull market has come to its end since the beginning of September, the DeFi lock-up funds on the Ethereum network have not fallen a lot after a short-term decline. Instead, they have quickly maintained a steady growth trend, starting from the lowest lock-up amount of $7.7 billion in early September. It rose to a maximum of over US$14 billion in lock-up funds in mid-November, an increase of 82%.
This shows that investors are still keen on DeFi mining under the incentives of leading projects such as Uniswap. On the other hand, because there are still many emerging DeFi projects emerging, exchanges have also launched DeFi mining products one after another, its early wealth effect It still attracts a large amount of funds and user participation. These various factors have injected a boost for the long-term development of the DeFi market, while helping more users enjoy the high-quality financial services and growth dividends brought by blockchain technology.
Author|Tao Hu
01
Two pain points in the DeFi market
In the slump of DeFi currencies such as YFI some time ago, DeFi and its liquidity mining model have been questioned a lot. For the DeFi market in its early stage, this is a stage that its development process must face, and it needs to move toward a more mature future in the cycle of exploration, innovation and reflection.
For the previous rapid decline of the DeFi boom, the market generally believes that there are two reasons. First of all, due to the lack of more innovative and high-quality projects and models in the market with limited breakthroughs in the underlying infrastructure. After YFI, YFII, YAM and other projects, almost no similar hot projects emerged in September, and mainstream funding The lack of confidence in the DeFi market to maintain rapid growth has led to a decline in the DeFi secondary market.
The second is that the threshold for DeFi participation is too high. Many DeFi projects need to perform cumbersome steps on the English website. At the same time, each operation has a high GAS fee, except for developers with high capital and strong learning ability. Unlike investors, most ordinary investors and new users of cryptocurrency have difficulty participating in liquidity mining in the DeFi market, which directly hinders DeFi projects from acquiring more users, capturing more commercial value, and holding currency Users bring more value.
At present, the former problem needs time to wait for technological breakthroughs, but the latter problem has already been solved by many industry players and has achieved certain recognition and achievements. The main solutions are Huobi, OKEx, BitMax and many transactions. DeFi mining services launched by all companies.
In essence, the DeFi mining service means that after the exchange collects the funds authorized by the user, multiple funds can be pooled and transferred to the corresponding DeFi protocol fund pool. This service can directly reduce the cost of users participating in DeFi mining. At the same time, the participation threshold is greatly reduced, helping more users enjoy the dividends of participating in the development of the DeFi ecosystem.
Take BitMax’s DeFi mining product as an example. The platform will display DeFi projects that can participate in mining on a specific page, such as Curve, HARD and other projects, covering the four major decentralized trading pools, lending agreements, derivatives agreements, and machine gun pools. In the direction, users can directly transfer their account assets to the mining account announced by BitMax with zero handling fees. The platform does not charge additional fees and performs corresponding operations such as deposit, withdrawal, and withdrawal of user assets.
According to BitMax's official website, in the current DeFi mining project, the reference annualized interest rate of Curve's USDT mining strategy is 27.88%, and the reference annualized interest rate of the HARD project is higher. The annualized interest rate of its USDX mining test is 30.5. %, the annualized interest rate of its token HARD mining strategy is 575.37%. Hard Protocol is a newly launched DeFi mining project on BitMax. It is a cross-chain currency market for digital assets built on the Kava blockchain. It supports users to borrow and earn through BTC, XRP, BNB, BUSD, KAVA and other assets. Take income.
Due to the simplicity and convenience of DeFi mining services and stable income, such services have been welcomed and supported by a large number of exchange users once they are launched. Some exchanges set up quotas when such services are launched in a short period of time. Since it has become an important means for exchanges to increase user stickiness and favorability, many exchanges are engaged in fierce and differentiated competition around the details of proxy mining services.
For traditional giants such as Huobi, they have more advantages on the traffic side, but this also results in that their proxy mining products will soon be purchased once they are online, and it is more difficult for ordinary users to participate. At the same time, some exchanges' proxy mining products also have a fixed mining period, which has a negative impact on users' capital liquidity.
02
Differentiated solutions
If we conduct a more specific analysis of the mining products of major exchanges, BitMax's DeFi mining products are one of the most attractive ones. Just as the wallet is a long-term entry point for DApp, BitMax also hopes to become a long-term important entry point for DeFi-type protocols and smart contracts, especially for small and medium-sized fund users who do not have private key management and smart contract interaction experience. BitMax's one-click With features such as proxy mining, no fixed lock-up period, and zero gas fee, users can participate in it at a low threshold even without any financial background. At the same time, the product design also conforms to the professional knowledge of financial professionals to ensure its professionalism and safety. Optimize the interests of users.
On the other hand, BitMax is still striving to form greater linkages with the DeFi project team, positioning itself as an ecological partner and consultant with common interests with the project team, and by driving the growth of the project, it can help users obtain better benefits. In contrast, most exchanges’ proxy mining products only list assets unilaterally, relying on their own traffic advantages to divert traffic to the project party, and other than that, it does not bring more help to the project itself.
It is understood that BitMax has also continued its strategy of "less but refined" in the selection of DeFi projects, tending to discover and incubate dark horses earlier, and be a "accompaniment runner" for high-quality projects. Only the curve liquidity pool will be launched in the first phase. Loan agreement with Hard, in the later stage, through exclusive strategic cooperation with more DeFi projects, we will strive to launch exclusive DeFi mining projects and provide a series of support for project parties, including token allocation mechanism consultation, secondary market liquidity strategy, Staking support, liquid mining, global marketing support and translation services, etc.
Through these differentiated play methods and thorough user thinking, it can be seen that BitMax pays special attention to DeFi mining products. This has become an important way for the exchange to attract more user traffic and increase industry influence, while helping platform users Enjoy the best mining experience and benefits, reflecting the exchange’s excellent strategic vision and user-led operational thinking.
Behind these actions are the years of industry experience and professionalism of the BitMax executive team at play. According to public information, BitMax CEO Cao Jing served as the quantitative investment director of Barclays Capital's New York branch and founded the quantitative trading fund Deutsche Capital; BitMax COO Ariel Ling served as the director and director of Deutsche Bank's liquid investment Americas, and Raymond Brothers Investment Bank stock trading Global chief operating officer and other positions.
It is this combination of Wall Street's traditional financial background and deep encryption expertise that enables them to have a deeper understanding of financial products, and they can quickly select high-quality potential projects in the industry amidst the complexity and bring more reliability to BitMax users. The investment target.
In this process, the BitMax team has also formed a stable and open endogenous value, which drives it to continuously improve its competitiveness in the industry, which has been intensively reflected in this DeFi mining product.
First, provide users with differentiated and unique value. The iterative speed of the cryptocurrency industry is very fast. Any new model or new gameplay will be swarmed by exchanges for fierce competition. If you want to break through, you need to provide unique value for the industry and users.
Second, consider both minimalist and extremely complex product concepts. Cao Jing has publicly stated that the positioning of digital currency trading products should be polarized, either minimalist or extremely complex. Minimal, that is, people without any financial background can use it with one click; extremely complex, that is, professional traders can trade the product.
Third, it has a clear sense of industry responsibility. The goal of BitMax's launch of a series of products is not only to attract more traffic, but also to promote the larger-scale application of DeFi and even blockchain technology, so that more ordinary people can enjoy higher-quality financial products and services because of the advancement of technology. In order to attract more incremental users and funds to enter the encryption market, related companies can also gain a broader market space.
It was a large wave of exchanges that launched DeFi mining services. The DeFi lock-up funds on the Ethereum network did not decrease significantly after the market fell sharply. Instead, they maintained a steady growth trend, starting from the lowest lock-up amount in early September. The US$7.7 billion rose to over US$14 billion in mid-November, an increase of 82%, injecting a boost for the long-term development of the DeFi market.
In the future, with the further improvement and optimization of the underlying DeFi infrastructure, excessive gas fees and delays will no longer be a problem for users. The financial services provided by the DeFi market will truly become a target that threatens the traditional financial system. There is a high probability that products such as wallets and wallets will become the main entrance for ordinary people to participate in the DeFi ecosystem. All parties will jointly promote the growth of the entire market.
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