Binance launched aggregated mining, DeFi entered the 2.0 stage
Author | Qin Xiaofeng
Editor | Hao Fangzhou
Produced | Odaily
Author | Qin Xiaofeng
Editor | Hao Fangzhou
Produced | Odaily
Last week, the crypto market panicked.
Bitcoin has repeatedly dropped below the $10,000 mark, and most DeFi tokens, including Sushi and CRV, have been cut in half and then cut in half... Various signs seem to indicate that the fire of DeFi is about to burn out, and the bull market is about to end.
By the end of the week, however, the panic had eased, largely thanks to two things.
One is that the founder of SushiSwap, who was exposed to cash out, transferred project control to SBF, the founder of the centralized exchange FTX, to temporarily eliminate panic.
Since Binance had made a strategic investment in FTX before, Binance was active behind the two events. Therefore, many people jokingly called it "Binance bailout".
It is worth noting that the aggregated mining of exchanges launched by Binance also directly promotes the DeFi market from the first stage of competition of "DEX issuing coins, doll incentives" to the first stage of "CEX as a traffic entrance, extending the utility of DeFi products". second stage.
This style of play has also attracted many centralized exchanges to imitate and follow up, and the DeFi market has become lively again.secondary titleOn September 6, Binance released"New Coin Mining", will launch a new product
"New Coin Mining"
, users can use BNB, BUSD or other designated tokens to mine (Farm) new coins. The first project to be issued on new coin mining is Bella Protocol (BEL), which will be officially mined on September 9.
(New currency mining page, picture from Binance official website)"DeFi Mining"This is not Binance’s first foray into DeFi liquidity mining. In addition to "new coin mining", Binance has also been launched recentlyBinance Mining」。
as well as"
Binance Mining
The so-called "DeFi mining", also known as "staking mining", means that users deposit USDT, BNB, DAI and other encrypted assets, and Binance helps users put these assets into popular mining projects in the market (Compound, etc.) to obtain income returned to the user. At present, the annualized income of USDT in "DeFi mining" can reach up to 60%, and the annualized income of BNB can reach up to 25%.
image description
(Revenue from DeFi mining, picture from Binance official website)
Different from "staking mining", "binance mining" provides liquidity for stablecoin transactions to obtain income, similar to Curve's model. However, the annualized income of "Binance Mining" on the 7th is generally maintained at around 18%, which is higher than Curve's current income (annualized 7.1% on the 7th).
From staking mining, to Binance mining, to today’s new currency mining, Binance has completed the “three-step” strategy and officially announced that it has entered the wave of DeFi liquidity mining.SushiSwap Whether it is for retail investors, DeFi projects, or the entire market, the entry of centralized exchanges such as Binance has played a positive role in promoting.
On the one hand, using centralized exchanges such as Binance as a traffic entrance can effectively reduce the threshold for retail investors to enter the DeFi market, help more users directly access DeFi projects, and play a role in promoting the project.
Prior to this, ordinary retail investors faced many difficulties in participating in DeFi mining: (1) Gas fees are high, and the Gas fee for a single transfer during peak periods can even be as high as 1 ETH, which is dozens of times the usual fee; (2) Network congestion, transactions sometimes fail If it is successful, it even needs to pay the Gas fee multiple times; (3) Users need to use web wallets to transfer funds, which is cumbersome and prone to mistakes. Previously
I once received a wrong transfer of 400,000 USDT.
Today, users no longer need to operate on the chain, and can participate in liquidity mining through internal transfers in centralized exchanges, both in terms of ease of use and security.
On the other hand, mining projects that have been screened by exchanges are of higher quality; retail investors can directly participate in mining without the need for a secondary market to take over, and it also prevents DeFi projects from becoming a tool for large investors to harvest retail investors.
Whether it is SUSHI, CRV or YAM, it is very difficult for ordinary users to grab the top mine, which also means that the income is greatly reduced; for a wider range of retail investors, due to the high mining cost, they cannot participate, and basically only in the second level Buy in the market, and take orders for large investors by "digging-lifting-selling". In addition, some mining projects have loopholes, smart contracts have not been audited, and security cannot be guaranteed.
Today, Binance is the first to launch "New Coin Mining", allowing retail investors and large investors to stand on the same starting line, and directly participate in liquidity mining through stablecoins BUSD and USDT, with more stable and higher income.
In addition, whether it is Bella or other projects of "new currency mining" in the future, due to the binding with the Binance brand, Binance will conduct strict audits, and the project quality is far superior to other DeFi projects.
In general, Binance's multiple new measures have provided more convenient channels for many users who are still on the periphery of DeFi, and also promoted DeFi mining to enter the 2.0 stage-exchange DeFi aggregate mining.
secondary title
2. Turn passive into active, use DeFi to empower platform currency
In a sense, Binance’s DeFi aggregate mining can be regarded as a counterattack against centralized exchanges (CEX).
In the era of DeFI 1.0, CEX has always lagged behind DEX (decentralized exchange).
Whether it is YFI, YFII, CRV, or YAM, they all went live on Uniswap first, and then landed on the three major exchanges. Many people even ridiculed that the three major exchanges are the last stop for DeFi coins to "cut leeks".
But for CEXs, due to traffic and competition considerations, they have to list popular DeFi tokens.
"If we don't list new DeFi tokens, the traffic will go to other exchanges, and we will gradually fall behind. We provide liquidity for assets, but at the same time we don't force you to buy. All tokens are High-risk, especially DeFi." Binance founder & CEO Changpeng Zhao (CZ) once admitted that the frequent listing of DeFi tokens is due to traffic considerations.
Now, Binance has launched DeFi 2.0, and the centralized exchange has turned from passive to active, from being led by the nose by DeFi projects to leading DeFi projects forward.
This mutual transfer of identities can help CEX to better grasp the development of the project and avoid the recurrence of the scene of YAM and CRV plummeting when they go online.
In particular, initial projects such as Bella will be more closely connected with the initial platform, and centralized exchanges will further capture community traffic through projects.
In addition, CEX also empowers platform currency through DeFi projects, expanding the usage scenarios of platform currency beyond IEO.
Taking Binance as an example, users can use the platform currency when participating in Bella new currency mining, and 90% of the shares are allocated to the BNB mining pool, and 9% of the shares are allocated to the BUSD mining pool, as shown below:
Moreover, in the previous "staking mining" and "binance mining", there are scenarios where BNB and BUSD are used.
Thanks to this, the platform currency that was left out in the DeFi boom has also recovered.
On the day of the announcement on September 6, BNB bucked the trend and rose, with a maximum increase of nearly 20%.
If Binance launches more "new currency mining" projects in the future, BNB may reproduce the style of the 2019 IEO period.
However, this does not affect the enthusiasm of other CEXs to follow.
After Binance launched "New Coin Mining", many CEXs also competed to imitate, and launched exchange platform currency DeFi aggregate mining.
It can be expected that this model will become a strong driving force for the market to move forward in the future.
secondary title
3. Prepare for a rainy day, Binance’s DeFi industry layout
Although DeFi has only become popular in recent months, Binance has made a strategic layout early.
As early as in the 2017 white paper, Binance clearly stated that it will build its own decentralized exchange DEX in the future.
This is just the beginning of Binance’s DeFi journey.Binance Smart ChainThe main network is officially launched.
In May of this year, Binance Chain released the Binance Smart Chain (BSC) again, which supports EVM, is compatible with Ethereum, supports cross-chain interoperability, and is fully connected with Binance DEX; on September 1,
Binance Smart Chain
The main network is officially launched.
According to Binance's plan, in the future, the DEX based on AMM (Automated Market Maker) on BSC will form a linkage with the Binance DEX based on the order book, thereby promoting the liquidity of assets on the chain.
"One of the key goals of the smart chain is to fully integrate the assets on the Binance chain (> 6 billion US dollars) to establish a sustainable DeFi ecosystem. In order to make the development of DeFi projects more convenient and move towards implementation, we are stepping up the integration of mainstream tools Providers, including blockchain browsers, oracle machines, APIs, etc.” Binance told Odaily.
The emergence of Binance Smart Chain enables Binance to provide stronger technical support in the DeFi field. Especially at the moment when it is difficult for Ethereum to meet the needs of DeFi, Binance Dual Chain will have the opportunity to undertake more market demand.
DeFi：Swipe, Aave, 1inch.exchange, WazirX, DODO, dForce, Bounce.finance, Spartan Protocol, MCDEX, Cream, ForTube, DeBank；
Odaily observed that there is already a liquidity mining project called "StakeCow", which was launched on the Binance Smart Chain on September 5.
Before the mainnet launch of Binance Smart Chain, many crypto asset projects have cooperated with the Binance Chain community:
Infrastructure and tools: ChainLink, Band Protocol, Trust Wallet, Ankr, BSCScan, Bitquery.io, MathWallet, MyWish, CertiK, Torus;
Cross-chain liquidity providers: RenVM, pNetwork, Thorchain, Ferrum.Network, Alpha Finance;
In 2018, Binance Incubator Binance Labs first phase project incubated the decentralized protocol Injective Protocol, in addition to Dune Analytics, Tellor, Terra, Strike Protocol, etc.; recently, Binance Incubator led the investment in the decentralized trading platform ( DEX) aggregator 1inch, with an investment of 2.8 million US dollars.
Summarize
“Our investment department, including Binance Labs, Binance X and M&A investment teams, can provide financial support for innovative DeFi projects with development potential.” Binance told Odaily, “Many DeFi projects are still in very early stages. We will discuss with the project how to design a more optimized transaction, liquidity model, token economy, etc., to help them better define the market positioning and future development plan of the product."
secondary title
Summarize
