DeFi: A financial tool that turns 1 billion into 2 billion
Editor's Note: This article comes fromChatting with Xiaozha (ID: xiaonazha88), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Chatting with Xiaozha (ID: xiaonazha88)
, reprinted by Odaily with authorization.
Now it seems that DeFi is a good story, a wealth story that does not violate harmony, and a new story that is preparing ammunition.
If ICO coin issuance is a money printing machine out of nothing, then DeFi is a bubble machine that allows you to turn 1 BTC into 2 BTC or more.
DeFi is like a minting machine, but also like a bubble machine. DeFi will be indispensable in the bubble of the next round of bull market.
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DeFi market value, 1 billion to 2 billion in a few weeks
Decrypt reported on June 9 that the total market capitalization of DeFi products surpassed $1 billion a few weeks ago.
In other words, the overall market value of DeFi has doubled in a few weeks, and this kind of increase may not be a big deal in the currency circle. After all, since March 12, Bitcoin has risen from $3,800 to around $10,000.
But in recent weeks, Bitcoin has fluctuated sideways. From this dimension, DeFi's performance is very good.
Let’s first take a look at which coins are included in the $2 billion.
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Source: DeFiMarketCap
The above statistics include 566 tokens with a total market value of 2.16 billion US dollars. The top market value rankings are: MKR, ZRX, SNX, KNC, UMA, DAI, etc.
From the market value of these tokens:
2) The market value of the 0x protocol is 322 million US dollars, and the market value of Synthetix is 172 million US dollars;
3) The market value of tokens after 160 in the ranking does not exceed $100,000.
How did the change from 1 billion to 2 billion come about?
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DeFi, up 1 billion US dollars in a few weeks, where does the money come from?
Of course, the first reaction was to pull it out.
Careful analysis, not necessarily. When discussing DeFi, one judgment dimension is to look at the market value of locked tokens. According to the statistics of DEFI PLUSE, the current market value of locked tokens in DeFi exceeds 1 billion US dollars.
So the market value of DeFi's $2 billion and the market value of locked tokens of $1 billion, is there any relationship between these two data?
From the perspective of the market value of locked tokens in DeFi, Maker, Synthetix, and Compound have the highest locked market value, exceeding US$700 million. The locked tokens are mainly BTC, ETH, DAI, etc.
From the perspective of the DeFi business model, for the lending platform, project token financing and stable currency lending are required; for cross-chain lending and transaction liquidation, the anchor currency of the token is required, such as anchoring BTC to issue WBTC, etc.
DeFi market value statistics include: project tokens, anchor coins, and stable coins. The locked token market value includes: BTC, ETH, stable currency DAI.
It is worth noting that the circulation of the anchor currency is generated by the association of the amount of pledged tokens, that is, the amount of anchor currency = locked amount. The number of stable coins is generated on demand, and certain stable coins and anchor coins will also be generated according to the stable coins.
Therefore, the $2 billion market capitalization composition becomes:
1) The value of the anchor currency generated by the anchoring of BTC, ETH, etc.;
3) Anchor the sum of the value of various types of tokens that appear.
Therefore, the $1 billion locked in DeFi has been incorporated into the $2 billion market value of DeFi.
It’s a bit like spending 1 BTC as 2 BTCs, and you can also use revolving mortgage loans. It’s not impossible to spend 1 BTC as 10 BTCs in the future.
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DeFi is a bit 2008 US subprime mortgage crisis CDOs
DeFi has attracted much attention due to open finance, and the two largest sources of financial business value-added: liquidity and additional issuance, that is to say, if DeFi has the same capabilities as the secondary market, it can also be related to the future of cryptocurrencies.
Simply understand, DeFi can generate coins from coins, and you can spend 1 coin to get the effect of 10 coins. For this goal, the projects in DeFi are also working hard, non-stop increasing the items that can be mortgaged, and expanding liquidity.
The hardware wallet Ledger has also joined the DeFi camp, integrating the decentralized exchange DeversiFi, so that users can conduct trustless transactions, confirm transactions and sign messages directly from the device.
ICO magnifies the money-making effect by printing money. DeFi may once again usher in the money-making effect through the trick of turning 1 yuan into 10 yuan. Be the story of a new round of bull market.
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DeFi, how can I make money from it?
All investments have certain risks. It is often said that "high risk, high return" or "low risk, low return". Risk and return are positively correlated. For high risk, low return is best avoided.
You can mortgage coins to DeFi projects to earn interest, but this is not recommended. Many DeFi projects have very low mortgage yields, such as lendf.me, which was hacked before, with 1% interest, but the risk is that the principal will return to zero.
