"DeFi refers to the economic paradigm change brought about by the use of decentralized technology, especially the blockchain system. From peer-to-peer payment systems to automatic loan products to a stable platform directly linked to the US dollar, DeFi has become a blockchain technology exploration The most popular application scenario in the field."
-Consensys
DeFi Ecological Picture
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In August 2018, Brendan Forster, co-founder and COO of Dharma Labs, 1st proposed the idea of "DeFi". In his post "Announcing De.Fi, A Neighborhood for Decentralized Financing Platforms", he explained the four features of DeFi projects: design On the decentralized general public chain, financial apps, open source code, and the complete developer platform. DeFi means "Decentralized Financing", which refers to "decentralized financing". In the wonderful world of blockchain, additionally it is called open financing, because this concept refers to those in the open decentralized system The growth of various financial apps aims to determine a multi-level economic climate, predicated on blockchain technology and cryptocurrency, to recreate and improve the existing economic climate. It could be said that the emergence of DeFi is really a ideal integration of decentralized technology (blockchain) and the present day financial industry. In many conventional scenarios such as securities trading, lending, and insurance policy, it has spawned a series of innovative apps and triggered the planet of encryption. Craze.
In most cases, decentralized financial applications have the irreplaceable advantages of traditional centralized finance, such as transparency (public chain data is transparent and auditable), open source, programmable, non-tamperable, and anti-censorship. DeFi started its budding growth as soon as 2017. In the second half of 2019, different teams competed, and celebrity projects such as MakerDao, Uniswap, and Compound emerged. However, at the start of 2020, the entire crypto industry was strike by the dark swan incident, which triggered liquidity to dry out, and DeFi was not immune.
Total Value Locked (TVL) is really a measure of the DeFi ecosystem's ability to absorb precious metal. It refers to the total worth of Ethereum deposited in a particular DeFi ecosystem. At the beginning of 2020, DeFi's TVL had been 680 million U.S. dollars, and TVL increased to 1.2 billion U.S. dollars during the "bull marketplace" in February. After the 312 incident, the DeFi project was also affected, and TVL experienced a cliff-like decline that has been nearly halved. From 312 to the present, the recognition of the DeFi ecosystem has not decreased but improved. Up to now, TVL has already reached 1.68 billion US dollars, and the amount of active Ethereum wallet addresses has also doubled.
Changes in the amount of locked ETH, image source: ConsenSys
The amount of assets locked on ETH, image source: TokenInsight, DeFiPulse
How PROXI became the unicorn in DeFi
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MakerDAO and PROXI with credit score as the core
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In today's DeFi ecosystem, along with decentralized exchanges (DEX), the asset issuance side will be extremely hot in 2020. In accordance with information from DeFiMarketCap, by the date of publishing, the worthiness of DeFi project tokens is continuing to grow to a lot more than 6.7 billion U.S. dollars. Which value reached a higher 8 billion US dollars on July 13.
The data implies that the top three DeFi projects this week are Compound Dai, Compound and Maker, with a complete marketplace value of around $1.6 billion, accounting for about 25% of the full total marketplace value of DeFi projects. In early June, the full total market worth of the Maker contract exceeded US$550 million, which furthermore accounted for more than a quarter of the full total market worth of DeFi, followed by the 0x agreement (US$322 million) and Synthetix (US$172 million). In just a month, the DeFi ecosystem has developed quickly, and the amount of projects and the amount of asset deposits have qualitatively exceeded, which can be described as the first yr of DeFi asset issuance.
DeFi market worth ranking, image supply: DeFi Market Cap
Talking about assets issued beneath the DeFi ecosystem, the veteran project MakerDao cannot neglect to point out. Maker is really a Dapp operating on Ethereum, concentrating on decentralized financing (DeFi) apps. Maker created the home loan lending function generally for the Tunbi Party. Customers can pledge their Ethereum on the Maker platform and lend out the steady currency DAI released by the platform. There are many benefits to lending DAI. The Tunbi Party rarely uses its own digital assets, that is similar to the spare cash we put at home. It just stores worth and does not generate brand-new value. To make users' cash run to generate revenue, Maker has developed a stable coin DAI, and in addition developed a loan provider for DAI. Customers only need to home loan Ethereum to the Maker platform to switch the corresponding amount of DAI. The platform after that lends DAI to users in need, costs a degree of attention, and returns area of the interest to users who lent DAI.
MakerDAO recently released a written report showing there are nearly 8,200 unique addresses, the remaining balance is not negligible, and the regular growth price of holders and dynamic addresses is 20%. The body below shows the evaluation between the amount of ETH locked in the MakerDAO home loan financial debt warehouse and the price shift of ETH since 2018. It should be emphasized that, as a loan platform, despite the fact that the price of ETH has fallen dramatically in 2018, the cost of Maker has been strong.
MakerDAO's locked ETH
Also concentrating on decentralized lending services, the DeFi 2.0 project PROXI protocol was born, attempting to promote the evolution of DeFi 2.0. With regards to project style, PROXI launched the provider module of credit score and derivative issuance for the first time, and provided users with the services of buying electronic asset derivatives and making use of high leverage equipment to earn attention through distributed security protocols. It collected loans and property. Synthesized in one, with excellent features such as flexibility and maneuverability.
The main modules of PROXI
PROXI includes four core modules: interoperability layer, multi-asset home loan pool, high-leverage credit score, derivatives issuance and trading modules. Compared with many early DeFi projects, the PROXI protocol has significant comparative advantages. To begin with, PROXI is really a DeFi platform that can release user status value, not only another binding protocol; along with users participating through mortgages, PROXI furthermore provides additional functions such as cross-chain interoperability, tokenization of real property, and issuance of derivatives. . In addition, the PROXI platform furthermore provides credit-based P2P lending and margin. Entering the platform, you will discover a distinctive portfolio administration panel. Customers can choose items with different risk and return ranges according to their very own capital character and risk preference. Even institutional investors can establish appropriate portfolio positions here.
PROXI's asset administration panel
Liquidity mining boosts PROXI growth
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Compound is also challenging the leading position of Maker. From the TVL information perspective, Compound surpassed Maker to be the No. 1 in DeFi. As the two established lending platforms in exactly the same time period, why do Compound become the leader? Right here we have to point out the liquidity mining activity of the governance token COMP initiated by Compound.
The so-called "Yield Farming" means liquid mining. This event is very similar to the “industry is mining” model of the FCoin exchange that was all the rage in 2018. The higher the cost of COMP, the stronger the user's motivation to save and borrow funds. Based on the current scenario, users not merely need to purchase Compound, but also make money. The interest of USDT on Compound was as soon as as higher as 11.66%.
The PROXI platform also uses this liquidity mining model-PROXI intends to apply liquidity mining incentives to multi-collateral and synthetic asset issuance. The platform aims to compensate for two main shortcomings in the encryption field.
1. Negative earnings cryptocurrency-almost all cryptocurrencies are kept in exchanges or wallets and don't generate interest. In fact, because of the natural higher volatility of electronic currencies, which includes brought huge costs and risk exposures to holding tokens, the yield of holding these cryptocurrencies is "unfavorable".
2. Insufficient borrowing stations in the cryptocurrency field-there is no agreement like Compound or PROXI, the only real place where users can "lend" cryptocurrency is through centralized exchanges. However, borrowing from the centralized exchange implies that you must be able to tolerate another type of risk exposure, such as being hacked, so that users' opportunities could be liquidated beforehand.
PROXI's liquidity mining mechanism
More importantly, with the introduction of DeFi, the gap between users who hold a great deal of cryptocurrency and users who've a requirement for cryptocurrency could be eliminated. The party with a surplus will get attention from the mortgage, and the borrower can use the excess cryptocurrency to attain their very own goals, thereby achieving a win-earn situation.
Conclusion
The PROXI project has been ambitious because the beginning of its design. It does not just want to be a follower of the DeFi boom, but to help DeFi by fully releasing the credit score worth accumulated in the entire encrypted asset industry, combined with the incentive model predicated on liquidity mining The completion of the evolution to the two 2.0 stage will truly stimulate the vitality and efficiency of capital in the market, and help DeFi grow into a truly brand-new finance with mainstream entire world influence-an open economic climate.
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