Editor's Note: This article comes fromBlue Fox Notes (ID: lanhubiji), reprinted by Odaily with authorization.
, reprinted by Odaily with authorization.Blue Fox Notes has always believed that algorithmic stablecoins are the real holy grail in the encryption field. On this point, you can refer to the previous article of Blue Fox Notes "". Wang Xing of Meituan once said: The most first-class entrepreneurial path is destined to be unprecedented. The same is true for crypto projects. The real big opportunities are in such projects. Of course, there are also the greatest risks here, and it is not suitable for everyone to participate in.
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The Three Supports of Algorithmic StablecoinsAt present, algorithmic stable currency projects are surging, including basis, frax, float, fei, rai, etc., but so far, they are still in the experimental stage, and they have not really gained a foothold. Only time will tell who will be able to run out in the end. But there are three extremely critical factors:* Resilience of the project partyAlgorithmic stablecoin is destined to be a narrow door. It is different from obvious DeFi projects, such as lending and DEX. These are businesses. There are transaction fees that everyone can understand at a glance, and there are clear and large-scale demands. The success of these tracks is inevitable, it's just a matter of which one succeeds.And the algorithmic stablecoin, in order to succeed, must go through hardships, because what it has to touch is the "holy grail". How can it be so easy to touch the "Holy Grail"?If you want to wear a crown, you must bear its weight.Don't look at a team's triumphant progress in a bull market, but look at a team's tenacity in a bear market or trough.* Stablecoin mechanism is the table, the degree of adoption is the coreIs the mortgage hybrid mechanism more likely? Or is a completely unsecured model more likely? Is the protocol-controlled funding model more appropriate? Or is the elastic change model more appropriate?The tone you set in the beginning has a profound effect on its long-term development. However, if a team is good at iteration, it can continue to improve based on existing practices.In the long run, the stability mechanism of a stablecoin is the appearance, the exterior, and the operating framework, while the real core is the ecological development of the stablecoin itself, which is the degree of its adoption.This is especially true for algorithmic stablecoin projects that are extremely difficult and risky. To abandon the development logic of ordinary projects, there must be a certain degree of idealism, and even some necessary sacrifices to promote the sustainable development of the project.secondary title
Ecological start of BasisBasis plans to launch its lending product on April 1, 2021. Basis's borrowing, as far as it is currently seen, is mainly the borrowing of its internal assets at the beginning. The purpose of its borrowing is to improve its capital efficiency, increase its application scenarios, introduce more gold diggers, and win a longer time for its development. .
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Specific lending details and mechanisms are expected to be released in a few days.secondary title
Why Basis Borrowing InterestsBasis' lending products serve two purposes:*Improve capital efficiency, help users increase revenue, and allow more people to participate in Basis' ecology;*The landing and adoption of the Basis ecology will enhance its usage scenarios, thereby facilitating its stability.With the loan project, Basis's internal assets have the opportunity to use leverage, which is the same as Maker DAO's loan. With Maker's loan, ETH has gained a greater utilization rate.For example, Basis lending allows its users to maximize returns on LP tokens that provide liquidity. It turns out that users who provide liquidity for BAC/DAI on Uniswap can obtain the income of BAS V2 and transaction fees. With Basis lending, users can pledge their BAC/DAI LP tokens, lend more BAC and DAI, and provide greater liquidity for BAC/DAI, thereby increasing its income.There is another scenario, which Basis also mentioned, can use the combination of its BAC Vault and lending to obtain more income. In the future, Basis V2 will dynamically issue BAS V2 token rewards for BAC/DAI LP and BAC Vault. With the Basis lending agreement, BAC Vault can use its pledged BAC as collateral to lend more other assets, such as BAS V2 or DAI, so as to maximize its BAC Vault income, and at the same time, there is no need to sell its BAC .secondary title
Tokens for the Basis lending protocolThe Basis lending protocol issues new tokens. The specific token mechanism has not yet been released. However, early participants in Basis will be rewarded with its tokens:*Early LPs who provide assets for Basis lending will receive tokens*BAS holders will receive an airdrop of Basis loan tokensIn addition, there are two details that are very important: first, BAS is still the governance token of the entire Basis ecosystem, including Basis loans; second, part of the Basis loan proceeds will be sent to CDF, which gives BAS an initial value capture.Basis lending is the first step of Basis ecologyBasis lending provides a landing scenario for the assets in the Basis system, and can improve its capital utilization rate in the early stage, attract more early gold diggers to enter, lock in more assets, and win more time for its ecological development.Of course, with the development of Basis lending, it can be expanded to more assets in the later stage, combining Basis' internal ecological assets (BAC, BAS, BAB, BAC/DAI LP tokens, BAS/DAI LP tokens) with more External encrypted assets are associated, such as ETH, wBTC, etc., so as to enhance their ecological resilience.
