From speculating on prices to speculating on market value, one article to understand the concept of internet celebrities and algorithmic stablecoins
Editor's Note: This article comes fromHot Wheels Community (ID: FHBT18), Author: Pepe, reproduced by Odaily with authorization.
Editor's Note: This article comes from
Hot Wheels Community (ID: FHBT18)
Hot Wheels Community (ID: FHBT18)
, Author: Pepe, reproduced by Odaily with authorization.
Hello everyone, I am Pepe. After two months of baptism, the DeFi market has gradually recovered, but the core thing of DeFi is not a new thing. Don’t mention the old coins before, just mortgage eth in the maker to generate dai The business has been around for several years, and farm has driven the popularity, but it is still a variant of "XX is mining".
And when it comes to innovations in 2020, it may be "algorithmic stablecoins".
In the summer of this year, ampl became an instant hit, letting the diners know that there is still such a magical currency in the market, no need to look at the price, as long as the market value increases, it can multiply and earn ten times the income. Here it seems to repost the magic map:
Special Note: This aunt has nothing to do with the Hot Wheels community.
Unsurprisingly, a lot of imitations appeared after ampl. In the past few months, some improved coins have also appeared, forming an algorithmic stable coin sector. Today, let’s take advantage of this enthusiasm and talk about such projects on the market. , to see what the difference is between them.
Algorithmic stablecoins, also known as elastic cryptocurrencies and unsecured stablecoins, are all a kind of Kazakhstan. One of its goals is to solve the pain points of the stablecoin market.
Stablecoins, if you have read our previous two articles, you should understand the importance of stablecoins to the encrypted world. It can be said that a large part of our hundreds of billions of market value is built on stablecoins, but many people will It is said that centralization like USDT is opaque and has regulatory risks, while DAI, which is generated through collateral, has a risk of serial liquidation.
Is it possible to say that we use machine algorithm smart contracts to create a currency that anchors the value of legal currency? Today's algorithmic stable currency is an attempt in this direction.
To talk about the mechanism of algorithmic stable currency, we must understand a word: rebase, that is, to make the market price tend to the target price by updating the circulation.
The setting of most projects is that when the currency price is > 1.05 US dollars (this standard is also slightly different for each project), it is considered that the market demand is increasing, and a certain proportion is issued according to the currency price to restrain the market price.
https://www.coingecko.com/zh?category_id=rebase-tokens&view=market
When the currency price is less than $0.95, it is considered that the supply is oversupplied, and the price will be reduced by a certain percentage to increase the price.
1. AMPL
Through repeated rebases many times, the currency price tends to approach the US dollar price.
https://www.coin-tools.com/ampl/ampl-rebase-history/
For investors, the focus of such currencies is not buying low and selling high, but the compound interest generated by continuous issuance after the price enters a positive cycle of micro-inflation. You may see that the currency price has been at 1.1, 1.2U but The asset prices of the holders behind have increased by five or six times, so such projects need to pay more attention to market value fluctuations rather than just prices.
To learn about the algorithmic coins currently on the market, you can check the following link from coingecko:
https://www.ampleforth.org/dashboard/
Currently, there are about 11 kinds of transactions included, and today we will talk about the main ones.
This should be more familiar. Needless to say, about the data of AMPL, one is:
This records the increase and decrease ratio of the daily rebase (once a day at 10:00 a.m.). For example, today it is +2.63%, which means that the currency volume of all currency-holding addresses directly increases by 2.63%. This does not involve transfer distribution, which is directly through the contract. Change the amount of currency held in the address.
2. YAM
The other is the databoard of the official website:
There are a lot of data in it, if you are interested, go and have a look. The following picture shows a change in market value:
The death cycle lasted for two months before, and it started to pick up in early November. Now it has grown to a market value of 350 million. Of course, this is somewhat related to some actions of the team and the community. In addition to the development of multi-chain, last month also launched a project called Geysers (Geyser) plans to allocate 3.9 million AMPL rewards from the ecological incentives of his tokens to liquidity market makers on the three platforms of SushiSwap, Balancer and Uniswap.
The above is the current market-making rate of return, but note that this does not calculate the free loss caused by price fluctuations.
The surge in AMPL’s market capitalization once amazed the audience, but there are still many design problems in its home, so there have been some “imitation disks” with micro-innovations, and one of the most popular ones in the community is the sweet potato coin YAM. .
3. ESD
At that time, it was the boom of defi agricultural mining. Many friends may only care about the income, ignoring that what his family is doing is actually a flexible currency, but compared to the traditional private equity financing method of ampl (early investors, teams, ecology and other chips account for to 70%), Sweet Potato is following the most popular community mining route without pre-mining and fundraising this year.
In addition, rebase is performed twice a day (at 4:00 am and 4:00 pm). At the same time, YAM has also added a reserve mechanism in the design. 10% of the additional issuance will be replaced by ycrv (the lp token of the stable currency trading platform Curve) as a community reserve for follow-up Development and use, and YAM also adds governance functions.
However, it is a pity that a rebase vulnerability was encountered not long after it went online, which led to a large amount of YAM being minted in the reserve. The king fell to bronze. The following picture shows the trend of YAM:
YAM has always been supported by the community. Recently, it is also affected by the algorithmic stable currency, and the price has returned to the top of 1U.
The full name of ESD is Empty Set Dollar. It is currently the second largest unsecured stablecoin in terms of market value. It was very popular two months ago, and its price soared to $15.
His home rebases three times a day, once every eight hours, and the middle section is called an EPOCH.
The biggest difference between esd and ampl is that neither the additional issuance nor the reduction has changed the amount of each account through the contract, that is, when you buy esd, it is the same as buying other erc20 tokens. When additional issuance, only the mortgage at the official contract address Tokens can be distributed to the income, and the income also needs to be collected by itself.
In the case of deflation, it will not directly deduct the currency on the account. There will be two concepts here, one is debt debt, when the esd is less than 1 dollar, the system will form debt according to the reduction ratio, and wait until the price returns to less than 1 dollar Above all, use the amount of additional issuance to offset these debts, and start to distribute additional issuance to currency holders until the debts are cleared.
The other is the Coupons coupon, which gives different discounts relative to the current price of esd according to the length of time the price is below 1U. The longer the time, the greater the discount. Users in the system can use the esd in their hands to buy This coupon, wait until the issuance cycle, you can use these coupons to redeem esd to earn a discount price difference, the main purpose of its design is to prevent staying under 1 dollar for too long, and the system will generate too much debt.
The above is the data of the esd debt and coupon market, which is still struggling in a debt cycle.
One of the advantages of this design of esd is that there is no rebase increase or decrease in the traditional sense, relatively speaking, the scalability is better, and it can participate in mortgages, liquidity pools, etc. like any other non-algorithmic tokens (this is still very important) , and ampl’s access to any third party will be a little more complicated. For example, when ampl/eth rebases in Uni every day, the amount of ampl will change, but eth will remain unchanged, which will also cause instantaneous arbitrage behavior, which may also cause Although ampl is very popular so far, it is only doing liquidity mining and has not really penetrated into the field of defi lending.
4. Basis Cash
The other is relatively milder, not saying that the currency price has fallen again, and the currency in the account is still decreasing. Davis double kill.
However, esd’s pitfalls are also very deep. Its discount coupon has a mechanism that is very similar to options. There are only 90 EPOCHs, which is valid for 30 days. up.
This is a bit like using gamblers to reduce the "bubble", but according to their original thinking, the people who buy coupons should not be wine and food, but big players who can pull the market. They are confident that they can pull the price back and buy again. Coupons are very cool, but goose, reality is possible. .
Judging from the evaluations of people close to the community, it seems that there is a force deliberately suppressing the price, hoping to directly harvest those who bought coupons, so this project, for now, has some features and advantages, but the water is still very deep .
This is an algorithmic stable currency project that has become very popular recently. His family has three coins bac\bas\bab. Many friends say they don’t understand it. In fact, if you look at esd similarly, it is easy to understand, because it is esd Improvements have been made on the basis.
According to community experts, this is expected to alleviate the difficulties that esd is facing now, but it is only the first wave of mining, and the increase or decrease has not yet started, so whether it is the optimal solution remains to be known through practice.
epilogue
Of course, pay special attention to the current price of more than 170 U for bac, which will eventually be anchored at 1U. . There should be no need to say more here, besides, I feel that there are pictures in my mind.
And the reason why it is so popular is also because the initial release took the same community route as YFI, mining through stable coins such as DAI, yCRV, USDT, SUSD and USDC, and BAC only has a starting amount of 50,000. Open 2 pools, use BAC as liquidity to get BAS, BAS is also a dividend coin that is hard to find, and the initial issuance of bac at such a high price will be very high, so it will be crazy if so many conditions are intertwined.
But what will happen in the end depends on the fight of the big players. Once again, although this project is a popular fried chicken, it is very risky.
epilogue
Regarding algorithmic stablecoins, there are some, such as the recently popular one called base, which is not anchored to stablecoins, but to the total market value of the encrypted market. There is also one called DSD, which is an imitation of esd. Disk, space limit will not detail them one by one, interested can look up.
1. Opportunities for algorithmic stablecoins, one is that there are basically no big exchanges at present, which is a potential hype point, and the other depends on the market value, whether it is a new market or a small project with a market value of about one million, betting that they can float Bo, but this is also the coexistence of risks and opportunities. Small projects may have strong explosive power, but they are not as strong as the consensus of hundreds of millions like ampl. Can't tell.
