I will change from day-to-day operations to a consultant role to help cultivate the next generation of teams built on Sushi, support from the sideftt stock price, and help the wider DeFi ecosystem, no matter where they are deployed, it doesn’t matter. I still believe in the Ethereum community, especially after Layer 2 goes live. The most exciting experiments all appeared in Ethereum first. Of course, such exciting attempts are being made elsewhere.
However, despite the promisicardano ada stock newsng development trajectory of the game field, there are still three major shackles:Shackle one, traditional game players don't really "own" anything. Players mainly buy clothing, weapons, props, etc. on in-game items, but even so, last year's consumption in this area still exceeded US$50 billion. However, in addition to improving player performance and game fun, these game items cannot be used for any other purpose, nor can they be sold, lent or mortgaged for any game items purchased by themselves. These purchase transactions are not real investments.
Shackle two, the interoperability between traditional games is very limited. To a large extent, many games on the current market are still walled gardens: they are independent of different "game worlds" and have their own items and experiences. Of course, this problem is not surprising! Game developers want to gain complete independent control over their own creative efforts, but what if game developers can collaborate with each other in more complex ways?Shackle three, traditional games lack business model options. At this stage, more than 80% of total digital game revenue comes from free games (or "freemium games"). In some successful paid games, most of them only get income through the purchase of skins, which will also limit the design space of some developers. Form follows function. As more game developers launch new business models (such as secondary NFT sales commissions), new game forms will also appear.Why the "Playing and Earning" game can get a big explosionIn fact, there are five major trends that have driven the explosion of "play while earning" games:Trend 1: The blockchain network continues to expand. Remember the network congestion caused by the "crypto cat" CryptoKitties game in 2017? But now, with the emergence of the second-layer Ethereum expansion protocol, a new high-throughput blockchain, and other scalability solutions, the development of blockchain native games has a solid foundation;
Trend 2: NFT becomes mainstream. Many innovations, including the ERC-721 standard, have spawned the recent upsurge in NFT applications. Game companies now have the tools to NFT games, and more importantly, the public can better understand why rare game assets are valuable.Trend 3: DeFi tools and architectures are increasing. Many basic decentralized financial industry tools (for example, AMM automatic market makers) have been tested in actual combat and have been widely implemented. Game developers can combine these tools to realize game financialization and promote purchase, lending, mortgage and other basic financial activities Now they can all enter the game field smoothly.In addition to the differentiation of the deployment of public chains, the business types of lending projects have evolved from basic lending and stable currency lending to new businesses such as leveraged mining lending with targeted scenarios. In addition, credit lending mainly for institutional-level customers, risk grading agreements derived from existing lending agreements, and interest rate derivatives are also gradually growing.
Although many loan projects have mature business models and abundant cash flow income, there is still huge room for innovation in this industry, and it is still possible to give birth to new giants such as Aave. It is precisely because of this that lending projects are still one of the key directions of the DeFi entrepreneurial team.After scanning the newly born projects in the past 2 months, we selected 4 more representative loan projects for key analysis. They either broke out rapidly in business or had unique mechanism innovations. Through this research Report, we try to answer the following questions:What is the actual business situation of these projects?What are their product positioning, mechanism or token design innovations?
For those fast-growing projects, what are the sources of growth and how sustainable are they?The track value of the loan business
Like the trading platform, the lending project is also the basic liquidity layer of the crypto world. It plays the role of a bank in the crypto world. Its essence is to coordinate the supply and demand of funds from multiple parties and match liquidity across periods. The business ceiling of this track will expand simultaneously with the expansion of the scale of the encryption business.On the other hand, the demand for matching funds is long-term, and there is no doubt about the sustainability of this track. Although the current funding needs for encrypted lending mainly come from investment leverage, arbitrage, and short-term capital turnover, with the progress of compliance, the channel between the traditional world and encrypted finance will eventually be opened, and the real-world collateral ( The introduction of lending platforms such as real estate and corporate credits, and issuing loans to non-crypto players through stablecoins are all things that are gradually happening, which will bring more room for development to the industry.Whether as entrepreneurs, investors or ordinary users in this industry, the track of crypto lending is far from the final form. There are still a large number of new products and rich investment opportunities worth looking forward to.As of September 16, 2021, Defi's total TVL has hit a new high since May, reaching 180 billion U.S. dollars. Although the proportion of borrowed TVL has declined, it still occupies the bulk, with a TVL of approximately US$50 billion.
In terms of business volume, the established projects Aave, Compound and MakerDAO still firmly occupy the top three positions, and their TVL accounts for more than 70% of the entire lending market.However, the rise of emerging lending projects is also amazing. The top ten projects in TVL include Anchor ($3.12 billion) on Terra, Benqi ($1.23 billion) on the avalanche agreement, and Qubit ($400 million) on BSC. Unlike the big three lending giants that originated in Ethereum, these fast-growing lending forces all come from Ethereum’s competitors, which is the hottest narrative at the moment-the new public chain.What is even more surprising is that in addition to the earlier launch time of Anchor (in March this year), the official launch time of the other two projects is only less than one month.In terms of the type of lending business, whether it is the number of projects or the amount of funds, basic lending projects account for a higher proportion, followed by leveraged mining lending projects, and other relatively new ones such as risk-graded interest rate products. The business volume is currently relatively small.
Project StatusProduct launch time: August 24, 2021
Qubit is a decentralized currency market that uses a mainstream borrowing capital pool model. Qubit's development and operation team is the team behind Pancakebunny-Mound, which was first deployed on BSC, and there are plans for multi-chain expansion in the future.Project Features
The main features of Qubit compared to other basic lending projects are:Its token QBT can increase the rate of return of deposit users after lock-up, which is called "Boost" functionQubit is part of Mound’s product matrix, and Mound’s products are highly combinableQubit does not support lightning loan functionBusiness conditionsBusiness data
Token value captureCore function: revenue acceleration
Up to now, the main function of QBT is to obtain qScore after lock-up. Through qScore, deposit users can accelerate their deposit income (from the increase in QBT deposit subsidies).This mechanism is similar to Curve's Locker mechanism. Curve's Locker function and economic model consolidate its original competitive advantage and increase the switching cost of liquidity providers and investors. It is a very eye-catching design. However, when the mechanism is applied to a loan agreement, will it still have a good effect? The author remains skeptical about this.
First of all, the reason why some people are willing to lock up the position of Curve's token CRV for a long time after buying it is caused by Curve's strong position in the stable asset business chain and the competition for the governance power of Curve by multiple participants. Because governance power on the Curve platform means two core resources: the baton of liquidity and the accelerator of revenue.Since the issuer of stable consideration assets (stable currency, stETH and other pledge certificates and renBTC and other BTC cross-chain assets are stable consideration assets), they have great requirements on the stability and transaction depth of their operating assets, so they choose Curve to list. Assets and attracting market-making liquidity are very rigid requirements, which creates a strong position of Curve relative to asset operators, which is determined by the business positioning of its Top1 stable asset exchange platform.
In terms of the expansion of asset lending scenarios, the demand from asset operators is far less strong, which results in a large number of less demanders for Qubit governance rights, and the overall lock-up willingness is difficult to reach the level of Curve.In addition to the revenue acceleration function, QBT currently has no other functional scenarios, and there is no QBT repurchase or dividend mechanism for the borrowing spread income of the Qubit platform.On the whole, QBT tokens are currently weak in capturing the overall economic value of the platform.risk control
Qubit does not have a special design for risk control. It basically adopts a method similar to the mainstream lending agreement Aave. Each mortgageable asset has two types: LTV (Loan-to-Value, borrowing ratio) and liquidation threshold (Liquidation Threshold). The main parameters, the former determines the upper limit ratio of funds that can be lent for a fixed-value collateral, and the latter determines when the debt/collateral comes to the ratio, the liquidation window will be opened.However, the current borrowing ratio of all Qubit assets is consistent with the liquidation line, instead of Aave's method of using the liquidation line to be higher than the borrowing ratio.
Qubit's LTV and clearing line parameters (data not updated), source: Qubit documentAt present, the borrowing rate of most assets on Qubit is 60%, which is slightly higher than the initial 50%. While this reduces the risk, it also reduces the pledger's capital utilization efficiency to some extent, especially the mortgage rate of all stablecoin assets is only 60%. There is still a lot of room for optimization of the overall parameters.
In terms of contract security, Qubit only received an audit report from the Peckshield family before it went live in August, which was slightly thin, and the oracle used Chainlink.The total deposits and TVL growth rate of Qubit was very fast since the launch of Qubit. The product's data board function is complete, the product interaction is smooth, and the interface is more beautiful, but overall there are not many innovations. With the continued decline of currency prices and the dilution of subsidies by funds, the current decline in the TVL of the project is also very obvious. It is worth noting that, compared with other lending project tokens that capture the cash flow of the agreement as the core source of value, Qubit's tokens are not currently linked to the project’s profit. The only function is to increase the deposit’s tokens through lock-up. Subsidies, which also caused the intrinsic value of project tokens to weaken, and the high inflation of tokens further aggravated the selling pressure of tokens.
Euler is a license-free lending agreement developed on Ethereum founded by Michael Bentley, a researcher at Oxford University. The development company is Euler XYZ. Euler XYZ won the Encode Club’s “Spark” college hackathon in 2020, and subsequently won a $800,000 seed round led by Lemniscap. Other participating funds include LAUNCHub Ventures, CMT Digital, Difference Ventures, Block0 and Cluster. And Luke Youngblood, an influential Coinbase angel investor. On August 25, 2021, the project announced that it has received a new round of investment of 8 million US dollars led by Paradigm. Other investors include Lemniscap and individual investor Anthony Sassano (The Daily Gwei), and Bankless founder Ryan Sean Adams With David Hoffman, Synthetix founders Kain Warwick, Hasu (Uncommon Core podcast).Project FeaturesIn response to the many shortcomings of existing lending projects, Euler has carried out quite a wealth of product mechanism innovations. Due to space limitations, only the key parts are introduced:License-free listing mechanism: Provide a lending platform for long-tail assets
Compared with the current licensing system adopted by mainstream lending platforms, the introduction of assets on the Euler platform does not require a license, as long as the asset has a WETH trading pair on Uniswap V3. Of course, in order to protect users from low liquidity and the risk of violent fluctuations in long-tail assets, Euler divides assets into three categories based on the risk of assets:Isolation layer assets: Users can deposit or lend assets, but they cannot use the isolation layer assets as collateral. In addition, if you want to borrow different isolation layer assets, users need to use different accounts on Euler to isolate different assets Between the risks.
Cross-layer assets: It can be used for ordinary lending and cannot be used as collateral, but it is possible to borrow multiple cross-layer assets with one account.Mortgage layer assets: The assets of this layer are similar to those of most mainstream lending platforms. They can be used for ordinary lending, cross-borrowing, or as collateral. Cross-borrowing means that users mortgage assets in one account to borrow multiple mortgage-level assets.
By isolating assets with different risk levels, Euler tries to increase the supported asset classes on the one hand, and on the other hand to ensure that high-risk assets do not affect the security of mainstream assets.Adopt dynamic interest rate model: improve the sensitivity and accuracy of interest rate pricing