Dragonfly Capital talks about three things that DeFi needs to solve next year

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Dragonfly Capital talks about DeFi needs to solve these three things next year

Haseeb Qureshi, managing partner of Dragonfly Capital, accepted a retrospective interview with Coindesk about his views on Defi. And pointed out that in 2020, Defi needs to solve these three things. 1) Improve efficiency by reducing overcollateralization margins; 2) Increase the diversity of synthetic assets (not only DAI); 3) Build bridges with the real world to import strong forms of identity into the blockchain.

2019 was a big year for DeFi. The number of DeFi users has increased by 30 times, MakerDAO is the first and most important DeFi foundation, and has captured a large amount of market share, and platforms such as Compound, dYdX and Uniswap have their own breakthroughs, wallets like Coinbase and Argent are now offering U.S. dollar-denominated savings accounts, all of which are on a public blockchain.

A year ago, DeFi was an obscure concept. Now no one doubts that DeFi will become an integral part of public blockchains.

This is a good start, but we still have a long way to go. DEFI introduces what was missing: a truly internet-native form of finance.

So what's next? DeFi has a lot to improve, but here are the top three priorities for 2020.

The first is to improve efficiency by reducing the overcollateralization margin. Most consumer mortgages operate with a 5-20% down payment, bringing the total mortgage loan to 105-120% (since the home itself is already 100% mortgaged). A 150% overcollateralization would be unheard of in traditional finance.

There are two main reasons for the over-collateralization situation: volatility and transaction delays. If the freeze time in Proof of Stake can be reduced (or better yet, DeFi applications can be pushed to layer 2) and use a more specialized network of market makers, these systems will be able to liquidate collateral much faster. In addition, with the acceleration of liquidation and the increase of collateral, the over-collateralization rate may drop a lot.

After reducing the mortgage rate, the second priority of DeFi is to increase the diversity of synthetic assets. Take a look at MakerDAO: MakerDAO produces dai, while there are no actual dollars anywhere in the system. All it takes is the price of ETH/USD. If we just swap the price feed for ETH/other assets, suddenly we can produce synthetic other anchored tokens through the exact same mechanism. Maker and UMA are two protocols pursuing this goal, and I hope we will see a variety of synthetic financial assets soon. In the future, anyone with a mobile phone will be able to buy any financial asset they want from anywhere in the world, all with cryptocurrencies.

Finally, DeFi will need to trend toward an iterative game. Instead of taking into account each user's white space, the protocol will take into account your long-term on-chain cash flow and income-generating assets. If your address is performing well on other DeFi platforms, you should be eligible for lower rates and better credit.

Eventually, we should be able to import strong forms of identity into blockchains by building bridges to the real world.

Identity is a prerequisite here. After all, blockchain is not quite like the real world when it comes to lending. If you default on your debt in real life, you must declare bankruptcy and forfeit your credit for at least 7 years. But on the blockchain, you can ditch whatever address is the default, and start over with a new address.

The Internet disrupted monopoly in nearly every industry, but in a way it left finance almost untouched. DeFi introduces what was missing: a truly internet-native form of finance. Ultimately, it will fund the growth of the Internet to other industries. However, it's still early days, and all of these products are experimental and will undoubtedly glitch. However, the innovative force of permissionlessness makes DeFi inevitable.

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Staking, lending interest (Defi&Cefi) and depositing currency (Hodl): Which currency can earn more?

Staking：

Using the Binance platform as the standard, the author compared the three operation methods, staking, lending out wealth management and depositing coins, which currency can earn more, and made a one-year comparison starting from December 9, 2018 , of course, the comparison is still very rough, but the result is still in line with the impression, it draws the following conclusions:
We consider:
The percentage value of the annual estimated average reported by Binance;
To understand the value of interest, we multiply the amount of collected tokens by the current value of the cryptocurrency;

The amount of invested tokens calculated by dividing $1000 by the value of the cryptocurrency as of December 9, 2018.

As it turned out, the winning cryptocurrency was Tezos (XTZ), with the initial investment multiplied by x4.

Lending wealth management:

Includes tasks performed on platforms such as Binance or systems created using the Compound protocol
Consider the following:
For loans on Binance (USDT, BNB and BTC), we will use the exchange rate on the platform;

For loans in other cryptocurrencies, we will use the rate published by Compound on December 9th, 2019.

In this case, we found that the investment that brought x3 was Binance Coin (BNB) due to several factors.

Tun coins:

Unsurprisingly, Bitcoin (BTC) is proving itself to be a standout asset holder and therefore a store of value. It was followed by Bitcoin Cash (BCH), which proved to double the initial investment, and Ripple (XRP), which recorded a net loss, proving to be a very bad investment.

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Finance 2.0: A blockchain letter from Pantera

A Defi article written by Pantera. They wrote a great Open finance article at the beginning of the year. Maybe they plan to write a summary at the end of the year? Some of the research data summarized at the end of the article are not bad. Some key points are excerpted:

Since 2010, any Bitcoin investor who has held Bitcoin for three and a half years has seen positive returns.

Jeremy Allaire, founder and CEO of Circle: "When the iPhone came out, no one could think of Uber - maybe only a handful of entrepreneurs. When you connect the dots between infrastructure, the things you can do may not even be People think about them. That's actually what excites me the most."

We mentioned at the beginning of this year that there are three major obstacles facing cryptocurrencies and Defi.
scalability
scalability
nascent infrastructure

scalability
scalability

0x has partnered with StarkWare to enable hundreds of transactions per second. Likewise, Uniswap ran a trial at Plasma Group that allowed 100 transactions per second. BloXroute recently went live on Ethereum, which will increase the throughput of the network. Ethereum has already increased throughput by about 25%, and using bloXroute, it could grow 10 times faster than its current rate in the next year. We have made great strides in Plasma research, in particular Matic Network has launched a trial on the main Ethereum network using the technology. A new technology called Rollup has emerged that can improve performance by 10x to 50x (but without latency), which is what Uniswap uses for its scalability experiments. We will see a lot of interesting launches in the first six months of 2020.
The ramp has developed very well over the past year. Bakkt launched their futures contracts in September and their trading volume is rapidly increasing. On the consumer side, Wyre (along with a host of competitors) have launched products that enable users to bring dollars (Ether, Bitcoin or Dai) into their crypto wallets in less than 30 seconds.

infrastructure
Unlike scalability and fiat onramps, which have made huge strides over the past year, with more expected improvements in 2020, infrastructure improvements will likely come at a slower pace. Our expectation is that it will take about 5 years for changes to manifest.

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STO products will (finally) take off in 2020

The author is Emma Channing, CEO of Satis Group and representative of Consensys Securities, for a retrospective interview with Coindesk. Mainly talk about her views on STO, she thinks STO will skyrocket in 2020.

2018 started with only three STOs hitting the market. In 2019, by contrast, infrastructure technology has improved significantly while costs have fallen sharply. At the same time, platforms have begun to be thoughtfully designed around end-to-end functionality and compliance, including features that broker-dealers need.

Relative liquidity is a benefit, but not a panacea for STOs (except for funds, especially those with active, co-investing LPs that want to trade with each other). Custody and control solutions are certainly important for individuals, registered investment advisors, and broker-dealers, but they are still nascent and complex from a practical and legal perspective. Another problem is low-quality, unqualified or enthusiastic lawyers advising STOs and failing to deliver. In particular, due to the lack of confidence in Regulation A+ applications.

For the STO industry to grow further in 2020, it needs to provide reasons other than greater liquidity (i.e. STOs divert investment into previously illiquid assets). The STO needs to be designed by a properly qualified FINRA registered representative to provide a better trap that is not only financially attractive but also has added functionality or enhanced execution or something like that, its The performance exceeds the traditional capital market. To achieve these goals, issuers need to leverage the full suite of DLT technologies.

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The dark side of the BRAVE browser

This is an article criticizing BAT (Brave browser), especially the attack against founder Brendan Eich. There are some attacks on individuals and criticisms on Brave and BAT's economic ecology.

In 1998, while still a Netscape employee, he helped start the Mozilla project. A core part of Mozilla's identity has always been good ethics around open source and web citizenship. This is an amazing legacy for any software engineer. Yet Brendan Eich underwent a sort of late-career transformation and became the face of the dark side.

By layering ads on my ad-free site, while convincing web users that they are part of some virtuous new economy. Users may find that all Brave does is replace one set of ads with another, so Brave introduces something popularly misleading: cryptocurrencies. Invented something called "Basic Attention Coin" to pay users for viewing advertisements served by the Brave browser.

Here's what I found with Brave:

Zero innovation. Brave offers no new ideas. Just replace one set of ads with another.

dishonest. For users, Brave will still collect data about you