Algorithmic stablecoins are "avalanche" across the board. Is there still a chance to rise after upgrading and self-rescue?
Editor's Note: This article comes fromVernacular Blockchain (ID: hellobtc), Author: Five Fireball Leader, reprinted by Odaily with authorization.
Editor's Note: This article comes from
Vernacular Blockchain (ID: hellobtc)
Vernacular Blockchain (ID: hellobtc)
, Author: Five Fireball Leader, reprinted by Odaily with authorization.
The second generation of ESD, imitation disk DSD; the third generation of Basis, imitation disk Mith, ONS; the fourth generation of Frax, XUSD, etc., without exception, the price of Token has been cut in half, followed by a knee cut, and then an ankle cut...
On the contrary, AMPL, the originator of the algorithmic stablecoin generation that has been silent when the younger generations were crazy, recently started its performance again.
This is the self-help journey that AMPL quietly started when other algorithmic stablecoins were crazy. Now ESD, Basis, etc. have also embarked on the journey of self-help.
In this article, we will take stock of what magic weapons or unique tricks each company has come up with to save its "horrible" Token price.
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AMPL: Liquidity mining, cross-chain, collateral
As early as more than two months ago, AMPL started to act quietly. There are three directions in general, namely liquidity mining rewards, cross-chain and collateral.
On November 21st, AMPL announced that it will launch a new round of Geyser Prizes, totaling 3.9 million AMPL. Sushiswap was launched on the 24th, and Balancer was launched on the 25th. In just 4 hours, the capital pool exceeded 1 million US dollars.
On the 26th, Balancer officially announced a governance vote to increase the AMPL mining cap from $1 million to $3 million, followed by another vote in mid-December to raise the mining cap to 10 million.
In December, the AMPL Foundation announced that AMPL Token will be launched on the Tron, Acala (Polkadot) and NEAR blockchains in the next few months.
This makes it very clear that 2021 is a year of cross-chain turmoil, and stablecoins must be a "slag coin" that "steps on a few boats".
On January 15, Brandon, the co-founder and developer of AMPL, initiated a proposal in the Aave community, suggesting that the Aave protocol add AMPL as a mortgage asset.
And just two days ago, a new round of AMPL Geyser plan was launched again. In addition to the automatic continuation of the previous three reward pools, a multi-asset pool will be opened on Balancer, namely AMPL/WBTC/ETH.
It can be seen that the development model of AMPL has been developing towards the general direction of higher liquidity and convertible rivets in the DeFi system, and the price of Token in the past two months has also stood firmly above the water.
However, the real test is whether the Token price and market value can be stabilized after the cancellation of these geyser plans. This is the real test for AMPL.
Some people say that AMPL's single Token Rebase is too old and has been surpassed too much by younger generations. Some people say that the blockchain world is still old and spicy. Pioneering projects in any field often get the greatest consensus and the highest rewards, just like "performance" Weak” BTC.
There is no reason for this kind of question, and the answer can only be given by time.
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ESD - V1.5: Change Token Model
As a second-generation algorithmic stablecoin of the dual-token model, ESD was completely sidelined after its smash hit. The price performance of Token in the past two months can be said to be the worst among all stablecoins, none of them.
In the introduction of version 1.5 just released, the Token model of ESD has undergone a complete change, introducing the Continuous ESD dual Token model, ESDS as the governance Token and Seigniorage Shares, and ESD as a pure stable currency.
Among them, ESD can always be minted with 1 USDC from the reserve, and can also be destroyed and exchanged for RR USDC (RR is the current reserve ratio, with an upper limit of 1.00).
ESDS can be purchased through reserves and can be burned when the ESD issuance income causes RR to be higher than the target value after reserve management income, reserve investment growth, and target RR falls below 1.00. If RR is lower than the target value, it can be minted ESDS and sold.
V 1.5 is expected to be audited in the first quarter and start in the second quarter. The price of ESD tokens has finally been stimulated by this news, and it has risen a lot from the bottom. However, under the attack of AMPL in the front and Basis and Frax in the back, can ESD recover? It's hard to say the glory of the past.
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Basis: Three steps to a grand vision
There are two reasons why many people in the Basis circle are optimistic:
One is to remove the Rebase function from Bac, which makes it more convenient for a simple Bac without Rebase function to participate in DeFi Lego, whether it is a medium of exchange or collateral, it is much more convenient.
Second, many people think that Basis is actually the originator of the Rebase model, just because the original BaseCoin was dismissed by the SEC. After that, AMPL absorbed its elements and launched it first. The BasisCash anonymous team took over the Basecoin white paper that year, which was much later.
But in terms of design, BasisCash is the "orthodox Rebase" algorithm stablecoin that retains the three-token model of Basecoin, rather than the single-token model of AMPL.
Which one of the three tokens is better than the single token is better than the POW VS POS battle back then.
From the blushing and thick-necked rhetoric in the WeChat group, to the well-founded analysis of various big Vs, and even to the academic discussions of academic papers, they can all find their own place to stand, but in the end there is a high probability of what will happen: two Live well, just like today's PoW and PoS.
The first stage: short-term strategy. Transfer liquidity to the Stableswap pool, give liquidity providers better rewards, and integrate lending agreements at the same time to increase the demand for BAC.
The second stage: medium-term strategy. Expand the basic ecosystem through various applications to increase the demand for BAC, making BAC a stable currency supported by scenario requirements.
For example, offering savings account-like services and launching the Basis Synthetic Asset Protocol. This may be the most critical part of the success of Basis. As mentioned in many previous articles, 2021 will definitely be the year when synthetic assets will shine.
The third stage: long-term strategy. It is planned to launch Basis Swap, a dynamic automatic market maker based on Basis Cash, to build its own stable currency system, and to make BAC a routing asset similar to ETH in Uniswap.
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Frax Deus Ex
Frax has come out on top after listing on Binance this week as the first algorithmic stablecoin.
Compared with the other three generations of stablecoins, Frax is a part-collateralized algorithmic stablecoin, which mainly relies on arbitrage to maintain Token price stability. Therefore, it is much more stable than the previous three generations of "printing money out of thin air".
Frax is basically good in the near future. It has cooperated with CRV and Sushi, received AC likes, listed on Binance, and there will be secondary mortgages and repurchases in the future.
More complex mechanisms such as PID control algorithm, and due to the initial mortgage casting, redemption and arbitrage mechanism, Frax’s stable currency is basically similar to Dai from the beginning, fluctuating around $1, and its stability is at this stage. Spike the previous generations of algorithms Stable currency, so the market recognition and acceptance are much higher.
The later test for Frax is that with the gradual decline of the USDC mortgage rate and the gradual increase of the FXS mortgage rate, Frax will become "more and more like" the algorithmic stablecoins of the previous three generations, which will pose new challenges to the reliability of the system.
However, it will take a lot of time to reach this stage. By then, the market value of Frax should be several orders of magnitude higher than it is now.
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Five generations of stablecoins? new exploration
There are currently two new types of stablecoins on the market, exploring in another direction.
The second one is called Rai - Reflexer Lab. Its biggest highlight is a reflective bond system. In the founder's own words, Radi is a washing machine, but it is not used to wash clothes, but to temporarily wash off the volatility of collateral.
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What both have in common is that they are not anchored to the US dollar, Float is anchored to the real market value of the encrypted market, and RAI is anchored to a dynamically adjusted price.
The difference between the two is that Rai first mints stable coins and then issues equity coins (currently only Rai can be bought on Uni, and the equity and governance coin FLX has not yet come out), while Float first issues equity coins Bank and then mints stable coins .
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