[View] storage is still the best value use cases encryption currency

Store of value is 2019, the entire field of encryption most feasible, the ideal use case, it increases the user provides the basis for the encryption of the second decade.

Mortgage-backed and asset replacement value storage encryption (SoV) found a niche market in 2019. As part of the dispersion financial (DeFi) revolution, the locals began to see the encryption mortgage and savings is one of the most exciting trends in the field. We also saw a community-oriented capital pool (called DAO) reappears, which itself can be said to be SoV.

Bitcoin community seem to have found common ground on its major niche market, that is a store of value rather than payment mechanism. SoV use cases become so compelling, Ethernet Square community tried to refocus on "Programmable currency" Use Case: "Ether Square is money" dominated the discussion.

DeFi project grew rapidly. Synthetix synthetic derivatives market in the second half of its collateral increased more than 680 percent. However, DeFi has been dominated by MakerDAO, the company Square to a basket of other Ethernet-based assets as a backup, to Dai (now known as Sai) stable currency loans. Dai / Sai may seem like a very low capital efficiency mechanism, the annual interest rate as high as 20.5%. In 2019, while an average of over 320% mortgage deposit.

But it is early.

From a security point of view to the protocol layer, these rates will encrypt all the risks inherent in pricing. DeFi interest rates should look like emerging market interest rate (ie 20%), rather than LIBOR + 1%.

Enter encryption currency of the second decade, if we see some catastrophic DeFi black swan event, followed by an appropriate period of re-pricing risk, I would not be surprised. Importantly, we are here to maintain perspective, and recognize that many DeFi encrypted economic model is still highly experimental, and need to learn important lessons.

DAO revival)

DAO this year caused a new excitement. Aragon by the release of 1,000 DAO, which is a remarkable achievement. MolochDAO spawned dozens of descendants of the theme, and a lot of ongoing research to make DAO sustainable and profitable, legal compliance, and more attractive to a wider audience. Although DAO experiment booming, driven in particular by the noble task DAO booming, but most of these organizations are funded and coordinated by the known participants of a certain number of a certain value of the capital base.

Critics argue that, DAO has great regulatory risk, there is no real decentralized, autonomous or organization particularly well. But DAO's rapid development, coordination tools are rapidly developing to allow different participants to effectively organize themselves. On how to use credit-weighted peer review combined with the right social tools, how can significantly improve the coordination of DAO, there is a lot of discussion.

As we saw in DAO 2020 professional, we will see the most compelling premium into the community DAO obtained, while the vast majority of DAO transaction price will be lower than the assets they manage (ie it flow value of holdings of storage). If for any reason, DAO administrative tasks differ significantly from the original, DAO will be more efficient than ever, cleaner way to release and return of the token holder value.

SoV the next decade

In 2020, SoV will continue to be the major use cases in the field of encryption. However, we have to solve some problems, so SoV become the basis for a variety of financial applications.

First of all, we can be more effective capital DeFi mechanism used. One option is to introduce non-transferable reputation, as part of the user's collateral. If the debtor to bear public reputation risk, the odds of default on the loan will be greatly reduced. This reduces the implicit interest rate. We can also sample the decentralization of basic capital DeFi pool in a given PoS protocol allows to improve capital efficiency in order to reduce the interest rate by the use of fixed-income agreements.

Second, we need to figure out how representatives from chain assets in the chain, but not limited to being called a security token exchange or over-use centralized proxy walled garden. Wise DAO capital pool should probably have some striking gold and other non-related assets exposure to reduce volatility associated with asset and investment portfolio. I personally would-based asset diversification while ensuring diversified portfolio more interested.

Third, you need a lot to spread the Gospel, will be extended to the encryption currency market the most promising markets, which has the following advantages:

Large population,
due to the ineffective fiscal and monetary policy as well as
strict technical education programs, developing talent.
Beijing, Hangzhou, Mumbai, Bangalore, Taipei, Sao Paulo and Buenos Aires and other cities is a good example of SoV can attract people largely use cases.

Finally, as the line on the new generation of advanced technology to encrypt network and begin to interact, we will need to figure out how to trade in a number of chains in multiple currencies. Ethernet Square and will benefit from the interactive space is usually the other layer 1 protocol and through, I am optimistic that, with the line Filecoin, NEAR, Cosmos, Polkadot other items, we will begin to see these initial 2020 cross-chain synergies and gain traction.

Motto "If you give a woman a lever and motivation, she can change the world" at this moment for our industry seems particularly distressing. For most people, the use of encryption still means enormous friction. Therefore, only when there is an extremely attractive economic incentive to do so, we are a new user space will tend to overcome these tremendous obstacles. This avoids the unfortunate currency of their country, seeking to avoid the higher revenue opportunities and / or to seek other better financing conditions during the economic downturn. However, since Bitcoin was born ten years, we can say with certainty that, as the supreme value stored encrypted currency has found a compelling use cases.