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core point of view

• Chain News ChainNews (ID: chainnewscom)

• , by Maple Leaf Capital, published with permission.

• core point of view

• Ethereum is a digital energy commodity that powers and secures transactions and code execution, much like water powers waterwheels, a “recyclable” resource. EIP-1559 is like alchemy, which is equivalent to converting ETH from water to a "non-renewable" resource more like oil.

• #D eFi's financial system, in other words, uses the above-mentioned digital energy commodities as raw materials to explore various modules and functions inside and outside the current financial infrastructure, and its structure is very similar to petrochemical/industrial value built on top of oil chain.

• A well-designed public chain with a broad base of elites, its long-term growth and returns should be comparable to the industry. Although the rise in its cost has the opportunity to restrain the upper-level economy, the security provided by the high price itself should be able to offset the cost disadvantage accordingly.

• In today's #DeFi ecosystem, we think automated market makers (AMMs) and lending protocols will merge over time. In a brutal competition, the winner may be short-lived, so we tend to avoid tokens with unbalanced supply and demand and slightly overvalued tokens such as COMP, BAL, and CRV (not yet issued), and prefer to invest in tokens that have reformed tokens. Tokens such as LEND, BNT, and REN that lead to catalyst push. Following the metaphor of "alchemy", the chemical change from pure governance to value capture is the core incentive to drive huge returns (such as KNC). ZRX and RUNE need further hard work to make that jump. Additionally, we are closely monitoring potential token offerings on Uniswap, Graph, and 1inch. A team with strong execution (such as SNX) deserves a more expensive valuation.

In general, we believe that each DeFi project can conduct more formulaic or flexible issuance/repurchase/dividend experiments according to the use/adoption of the agreement and the degree of preferential treatment for users/long-term holders. We also appreciate teams that are thoughtful about tokenization without bragging about it or making money prematurely.

The combination of blockchain-native currency, L1-layer digital goods, layer-2 scaling, and #DeFi infrastructure should have a Lollapalooza effect, and the combination of the three will have the opportunity to be like a nuclear transformation Generate new use cases, like the invention of the first steam engine, or the birth of the first British pirate equity structure. This new paradigm and application. From today's perspective, these new formats are either unaffordable or impossible. At present, although this ecology only serves dog gambling and leveraged gambling today, we can't just see the swamp in front of us, but see the tall buildings in the future from the swamp.

If the above tasks are successfully completed, we may live in a future world with a high degree of individual sovereignty-every item of financial statement can be re-integrated, and any individual can sell to anyone and acquire ownership rights; sovereign / nation-state The definition of will evolve. New agents of violence emerge. All of these institutions can provide violence as a service in exchange for “tax dollars”; in this paradigm, everyone can be a stakeholder on a hyperlocal and global level.

Ethereum-based layer 1 tokens should be compared to evolvable energy commodities (water/oil), while its upper layer applications should be compared to real-life energy/petrochemical/industrial value chains/infrastructure industry chains

Tier 1 tokens serve as an evolvable “energy” commodity that secures and powers smart contracts. In addition to balances, Ethereum's ledger also stores the corresponding code that is executed when nodes (miners) process each block. By design, the caller of said code pays a small amount of Ethereum tokens as a gas to incentivize processing. In the PoS design, it is necessary to release income to the nodes (PoS), while in the PoW system, miners need fees + inflationary income streams to compensate their input (PoW) because they pay the sunk cost of legal currency. Network security can be guaranteed. In short, ETH, the PoW token, acts today as an energy-like commodity, powering and securing transactions and code execution, much like water powers waterwheels as a “recyclable” resource— —Nodes and miners sell ETH directly back to the ecosystem to achieve a balance similar to atmospheric circulation.

The EIP1559 proposal slightly changes this mechanism, and the gas fee paid by the user will be directly destroyed. The base rate of the inflation rate will also be increased accordingly to compensate the nodes/miners - such a change, like alchemy, turns ETH into oil, and the surge in processing demand will directly bring upward momentum to ETH. The timeline for this change, and whether non-ETH (such as wrapped BTC) can be used for travel remains to be seen.

#DeFi is one of the petrochemical/industrial value chains built on layer 1 digital commodities, aiming to replicate and innovate existing financial industry functions. It is worth emphasizing that the existing financial system is a closed value transfer system (i.e. centralized custodians with the help of violent institutions, maintaining a centralized value transfer), now there is another option: through ingenious system design , allowing the open market to discover what people are willing to pay for value transfers. In other words, whereas in the past the hidden costs of value transfers were highly optimized, primarily through brute force recourse in the event of default on tax payments, now, there are many alternatives priced through open markets.

Therefore, middleware and applications currently running on Ethereum are like crackers, refineries, pipelines and servicers in the oil value chain, as well as third parties such as engine manufacturers and chemical plants using oil/refined derivatives. Three industries.

• DeFi, in other words, is an emerging ecosystem that burns various first-tier token digital energy to explore and replace various modules/functions inside and outside the current financial infrastructure.

• The long-term growth and return of a well-designed public chain with a broad base of elites should be comparable to that of the industry. Although there is an opportunity to restrain the upper-level economy, the security provided by the high price itself should be able to offset the cost disadvantage accordingly.

• Under the framework of such a digital commodity/value chain, I think the following inferences can be drawn. These make it not easy to invest in the "Ethereum killer" public chain, and the only remaining hope may be that the product-market matching degree of the application found in the L1 competitors is extremely high, attracting more developers/users:

• Code is the alchemy of digital goods: protocol upgrades through consensus, endowing tokens with new properties that are much more flexible than physical atoms. Here, it is possible to turn water into oil. The difficulty of code upgrades to be accepted is analogous to the inert/brittle combination of compounds.

• What constitutes the moat is not only technology, but also a community with uniform and equal interests: considering the characteristics of the evolution of the public chain and the reproducibility of the code, a leading, fast-changing, and dynamic public chain should be any Ecological first choice. In other words, preventing anti-intellectualization, centralization, and alienation of the community is the top priority of maintaining a leading public chain. Replicating + maintaining the community and ownership structure will be an extremely challenging task.

• "Moore's Law" for digital goods: the cost per transaction should continue to decline over time while maintaining the security and integrity of the ledger, while the overall value of the network scales with use cases Increase. Similar to how to refine oil into high-grade oil, or refine raw iron ore into alloys, layer 1 tokens are improved through compression and outsourcing above layer 2, while maintaining/granulation safety, the same demand, in The cost on the public chain should be smaller and smaller.

Fundamental question: Which is better to invest in oil or petrochemical/industrial chain stocks? Opinions may vary. My view is that a well-designed layer 1 can provide returns that match the growth of the industry, and a large spike in the SoV premium in the short term may temporarily dampen its commodity demand, slowing progress and adoption, depending on the end demand price Is there a lack of flexibility.

Maple Leaf Capital

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• An overview of #DeFi tokens to watch

• image description

• Research token introduction, the number unit is millions of dollars, the data source is Messari, Etherscan, Coingecko_

• COMP, BAL, and CRV supply and demand balances can be very investor-friendly, so proceed with caution; as capital flows in hot sectors, one might favor tokens like LEND, BNT, and REN that may change or assume catalysts. ZRX and RUNE are also good, but it depends on the team's willingness to change and whether they have the ability to execute.

One thing to note is that all token mechanics are subject to change. Even for governance tokens, it is entirely up to the team whether they perform governance functions or not. "Governance > value capture" is usually a big catalyst for a token like KNC to jump.

• One can look forward to Uniswap, Graph and 1Inch launching their tokens for more incentives. The layer 2 scaling token debate still lingers.

• secondary title

• For the best risk-adjusted return, do you want to own a commodity like water that can become like oil but still be defective (like ETH), or do you want to own "equity" at the top of the value chain (like COMP, MKR, SNX, LEND, KNC, etc.) ? In particular, it should be noted that the value chain itself can be transplanted to any commodity without being loyal to any single public chain.

If the final demand is still far from being defined, is there any value in this oil commodity and upstream industry chain? It's akin to buying land to drill for oil and building refineries before steam engines and cars, how do you know it works?

In a world where any project is generously issuing stocks/tokens and the token economic model is constantly changing like a kaleidoscope, any project can cross tracks, and any track may no longer exist tomorrow. Are you sure you have the right track layout in the value chain?

• secondary title

• Analysis of the characteristics and advantages and disadvantages of popular #DeFi projects

• #DeFi lending platforms: MKR and COMP should not invest until the token economy changes dramatically, LEND is worth getting on

MakerDao (MKR): Repaying Dai (USD) loans incurs an X% "stability fee" (centralized decision) against which MKR is destroyed + Dai deposited into MakerDao DSR is paid. MKR can also issue additional tokens to manage the risk of liquidation. MKR is currently regarded as the basic compound / Aave. Users can only deposit limited collateral, and can only lend the platform's own USD stable currency DAI, and its net interest rate is represented by "stability fee".

• Compound (COMP): This token only has voting rights to changes to the rules of the Compound protocol. Just released the COMP token, which distributes tokens to users based on the assets they deposit/loan.

• Aave (LEND): 0.025% borrowing fee (0.09% flash loan fee), 20% is paid to the platform integrating the product, and 80% is used to burn LEND tokens. Fixed and variable rates are great. The flash loan platform is exciting.

• personal opinion:

• Borrowing has certain economies of scale, but it is not a natural monopoly. To expect user loyalty to be 0 and to choose the most affordable rate (just like in the real world). There may be innovations around the preferred rate (by betting on native tokens according to the agreement), cooperation with AMMs to provide liquidity + lending (higher rates), and packaging structured products into tokens on AMMs (CLO), etc. .

• MKR as a first generation #DeFi token needs to refactor its token economy + add features (AMM is a good step). The existence of DSR with a centralized rate defeats the purpose of allowing Dai to circulate to a certain extent. Dai may never be adopted, partly due to Tether + USDC network effects, partly due to collateral pool limits + interest rate manipulation, both of which are blunt weapons. I don't think MKR tokens are worth investing in until the model adjusts. Strong VC support and centralized model may mean that it develops very fast, with more real assets and centralized assets as collateral.

Compound’s token rewards to users and the extremely small liquidity of the token have resulted in its market value and loan volume being artificially enlarged and diluted. Tokens like LEND/MKR provide alternatives in value capture. Betting on such a large project, and putting Aave behind, means that returns are likely to be underperformed, especially considering the current high valuation + small circulation + continuous large issuance. I think Aave is worth the investment because of (a) the obvious valuation difference, (b) traffic from Compound during this period of accelerated growth, (c) it will likely do something like: yield farming, and (c) Teams are better at leveraging partners in the ecosystem and delivering new functionality for common uses. Boldly explore different collateral types beyond normal crypto assets.

• Dharma, Nuo, Fulcrum, Lendf, etc. were excluded from the focus due to lack of tokens and/or lack of user adoption.

• Kava (KAVA): More on that later. Not being on ETH probably means it's not easy to succeed and lacks other projects/modules to interact with. Framework Ventures' involvement could mean it's worth a shot/could introduce liquidity mining.

• #DeFi Liquidity Pool (LP) / Automated Market Maker (AMM): BAL is not worth investing in, CRV is too expensive, BNT is worth a try

• Uniswap (no token): Set 2 tokens (50/50), set curve (swap ratio), buyer pays 0.30% fee, now also works as an oracle. Keep an eye out for possible token launch plans and other business development incentives. Arbitrage losses are a real problem.

Bancor (BNT) v2: 1 token + BNT, arbitrary rate, adjustable curve + Chainlink, variable rate, loanable when depositing. BNT tokens serve as AMM’s reserve tokens, earning transaction fees in proportion + earning newly issued BNT. Betting on inflation, fees and interest can be very tempting. Changes in the value capture model and possible catalysts + the lowest market cap among DeFi tokens today, making it a very good target. The difficulty is that the Bancor team isn't part of the DeFi mafia (check out SNX-BAL-CRV-REN!), so it might not be hot enough. Also unclear are market metrics and total token supply.

• Balancer (BAL): multiple tokens (up to 8), arbitrary ratio, set curve, user-defined fee (0.0001%-10%). The BAL token was just released and distributed to users based on assets deposited to provide liquidity. Tokens have voting rights to decide on Balancer rule changes. Similar to COMP, BAL is an option for future value capture. The market capitalization of full circulation has reached unicorn status, and the small circulation + increased issuance schedule means that it is only worth investing in after a crash or when the token economic model changes. Changes to the oracle mechanism lack due process, highlighting governance deficiencies.

• Curve (CRV): When one or more tokens or similar representatives are exchanged (ie USDC to DAI, WBTC to renBTC), the taker pays a fee of 0.04% to set the curve. CRV tokens are waiting to be distributed to users based on the assets deposited in the fund pool. The fee will be used to burn CRV tokens. Obtaining value through burning + liquidity mining from the first day means that CRV is likely to enter the market at a very high valuation at the beginning (our guess is that the full circulation market value is greater than 1 billion, that is, the price of each token above $0.35). Combined with COMP and potentially Aave, it could decouple DAI. The lifespan of the project is uncertain, and if it launches at a high price, it is better to mine it than buy it on the market.

personal opinion:

• All AMMs are pretty much the same - users lock tokens in a smart contract, let other users trade/exchange them, usually using a mechanism that calculates slippage (simulating order book depth), and pays different fees. Ultimately they are all similar to each other (CRV, BNT, and Uniswap as subsets of Balancer), and I also believe that AMMs providing liquidity will eventually combine with interest earning protocols like BNT as well. A possible outcome is centralized exchange integration.

• Unlike lending, exchanges do have a network effect, as users flock to exchanges with the lowest slippage/highest rebates. Given the intense competition for token inflation incentives, liquidity remains isolated for now, but long-term niche winners are expected to emerge (probably not yet). It is best to buy in a basket. BAL+CRV is too expensive. BNT is worth a try. Stay on the sidelines for Uniswap.

• #DeFi DEX aggregators and others: KNC has better momentum and value capture, but short-term headwinds, ZRX needs further changes

• Kyber (KNC) Katalyst Upgraded: Becomes "Equity" of Hybrid Liquidity Aggregator

• 0x （ZRX）

• Token mechanism: aggregated from different sources, market makers pay a variable 0.25% fee (65% to KNC stakers, 30% to professional market makers in Kyber, 5% for KNC token burns).

• Personal opinion: Katalyst token economic adjustment means a game changer for KNC's value capture. Staking KNC can now be rewarded and burnt as an additional buffer of demand (if they also get tokens distributed by KNC). It's interesting that market makers are still paying for the Kyber team to integrate their product into every end-user-facing application (which is usually paid by users). Kyber users will almost certainly still pay, as market maker fees are baked into the spread, and the added convenience could mean less price sensitivity. Long term, the big question is whether an integrated aggregator layer with a market-making service can beat a pure aggregator (like 1Inch) that only deals with DEXs, where market makers on DEX don't need to interact with Kyber's intermediaries . My hunch is that before the industry matures, the more tactile KNC model has its value, but after the emergence of a more mature free layer, Kyber will be easily eliminated by the application layer; however, Kyber can continue to provide liquidity Additional services beyond aggregation, but this is also risky.

• Short-term token price pressure may be seen as the catalyst wears out. I think it's an interesting final distribution model.

• Token Mechanism: only has voting rights for 0x upgrade (ZEIP)

• Personal take: 0x is a 1st gen attempt to help the ETH ecosystem transact with each other (before all the #DeFi innovations above). The code provided by the 0x team is essentially a public good and currently has no value accrual for the token - although there have been attempts like ZEIP-21 that introduced fees for ZRX stakeholders (who are also market makers). Still, the project is still in the exploratory stage when it comes to token economics. The recently launched DEX aggregation product Matcha is a very good step to feed more volume to the protocol - but ultimately ZRX will be with market makers (with Kyber), pure aggregators (1Inch) and basic DEXs (Uniswap+) Direct competition - the latter offering deeper integration, lower fees, better routing and/or direct access. With current valuations similar to KNC and post-catalyst value capture insignificant anyway, there may be an allocation to ZRX, but it's best to wait until a friendlier proposal emerges that acts as a catalyst for a repricing.

1Inch (no token yet): A notable aggregator. Possibly another competitor of KNC and ZRX.

• IDEX (IDEX) — Don't like order book DEXs that require KYC. Unless the team improves the mechanism, IDEX is not worth investing in.

• Loopring (LRC), Switcheo (SWTH), Airswap (AST) — more on that later.

• #DeFi Derivatives DEX: SNX's top-notch execution may warrant high valuations, UMA still looking for product-market fit and waiting for a catalyst

• Synthetix (SNX) — a "trading platform" that tracks profits and losses through price feeds, the token acts like a kind of "equity pool"

• Token Mechanism: Token acts as a pool of equity for the balance sheet of the "synthetic asset trading platform" - the protocol uses oracles to receive external price feeds, whereby user profits/losses are funneled into losses/profits of SNX token stakers — Therefore, SNX stakers need to hedge if they want to stay even. System inflation acts as an incentive to encourage staking + transactions. The paid transaction commission + inflation will be owned by SNX stakers through dividends.

• Personal opinion: The "centralized trading platform" is elegantly designed. In the future, other collateral types (mainly ETH and wrapped BTC) will be added, enabling another "borrowing" venue and increased fees. Closing the loop allows adding modules like asset management pools, which add more fees to SNX stakers. Leveraged Futures + Binary Options was introduced great. Users need to take risks that cannot be hedged; also, high gas fees will basically kill all operations on the platform, but I don't think layer 2 will be launched anytime soon. Network effects are debatable in the long run, but perhaps once there is enough liquidity on the client side, offsetting transactions will make it easier for pools to hedge. Mass distribution to end channels is required. The risk is that the oracle crashes, founder Kain burns out, and the SEC destroys them, or users don't care about making 100 pips on USDAUD. It's richly valued, has probably the best team in the space -- and executes well with all sorts of upside opportunities.

UMA (UMA) + Augur (REP) — ​​"capital expenditure" for the oracle/reporter

Token Mechanics: These two tokens are put together because their token economics are fairly similar - users place off-course bets on UMA/Augur and when settlement comes, UMA/REP holders are summoned (for a fee ) to "validate" the result - the holder stakes UMA/REP tokens, submits the result/vote, and gets a commission from the user if it is close to a consensus vote.

• Personal opinion: These two platforms may be too far ahead. Tokens are more like artificial oracle nodes. The ultimate problem with these platforms is that they may not be able to scale, or no one cares - long-tailed, highly specific VAMs will find it difficult to find counterparties (large-volume, high-significance VAMs can be sold through platforms like SNX ), even if a counterparty is found, the problem still exists: (a) the tokens are too concentrated to determine the authenticity of the voting results (these are all VC chains), (b) the verification submission is highly manual, This means that it may not be possible to scale. Such a project is best done with a platform that has a large number of existing users paying for it (such as Facebook), rather than a newly established platform-the former will immediately crush the latter. There is already a lot of gambling in the valuation (the platform has insufficient traffic), and the token may be worthless in the long run. The key question is whether liquidity mining can work. UMA's investors include Placehoder + Dragonfly + Coinbase. Such an investor team means that it has the opportunity to be listed on Coinbase.

• Futureswap (FST), Deversifi (NEC), dydx (no token) — more on that later.

• #DeFi cross-chain DEX / Wrapped tokens: REN depends on risk reward and mining and cross-chain enablement, RUNE is more like a venture capital bet

• Ren (REN) — “Capex” wrapping tokens on Ethereum

• Token Mechanism: To obtain the right to "dark nodes" that process transactions, you need to take REN as collateral. The protocol acts as a custodian for incoming tokens (BTC, BCH, ZEC) and issues 1:1 certificates on Ethereum (much like a vault) that can be used to redeem incoming tokens. From the input of tokens to the issuance of certificates, minting and burning fees need to be paid to REN dark nodes in proportion to ~0.1%.

• Personal opinion: The renBTC pool is limited by the market value of REN (REN / 3 > minting renBTC, when the market value is about 140 million, the maximum minting amount is about 5,000 renBTC, and the current supply is about 1,300). When the number of wBTC has exceeded 10,000, the result may be like Tether vs. Dai, and a more centralized version of wrapped BTC will win (although BitGo may be more constrained than Tether and cannot be issued out of thin air). The team must make every effort to (a) increase transaction speed and (b) increase renBTC penetration throughout the ecosystem. Arbitrage demand + gains from lending and liquidity pools + ETH's faster transaction speed may facilitate one-step adoption of renBTC. The biggest problem is that there will be enough fees to cover the cost of dark nodes in the long run, so the team needs to further redesign the token economic model to improve capital efficiency without sacrificing security. It is part of the DeFi Gang of Four (SNX-BAL-CRV-REN), so expect further incentives to keep pushing the token. It is likely to see further value capture catalysts and more updates when cross-chains are enabled.

Thorchain (RUNE) — "Capex" for cross-chain Uniswap

Token Mechanism: RUNE as collateral needs to (a) obtain the right to become a transaction processing node and (b) provide liquidity. It wants to be able to exchange tokens in different chains (such as exchanging BTC for ETH). For every $1 of exchangeable tokens in the network, the protocol requires at least $3 worth of RUNE to be staked. The transaction commission paid + additional tokens are distributed to SNX stakers as dividends.

Personal opinion: If successful, it could be the first one-click non-custodial token swap across different chains. Can embed Tornado Cash type functionality + introduce delayed/regular transfers. Might compete with REN (ETH - renBTC - BTC vs. ETH - BTC), meanwhile a renBTC/BTC swap on Thorchain would be interesting once it launches (could be so cheap that you don't have to pay the 0.1% renBTC burn fee). At the time of initialization, use powerful token incentives to stimulate transactions and provide liquidity in advance. The 3:1 collateral-to-token ratio like REN also limits the size of the liquidity pool. There have been delivery delays in the past, and the product has not yet been launched - the current market value of 50 million + the full circulation market value of about 150-200 million, which is not good for a team that has just launched early products and is unknown Not cheap. If it can be successfully launched (thanks to incentives and lock-up periods), it may bring a large price boost, but also increases the risk of delays/errors/non-delivery. Its complex system also needs to account for block time attack vectors and fees required for transactions on different chains. It's a one-way bet on success, with potentially significant downside risk if it gets screwed up; and the ultimate outcome is hard to tell right now.

• Keep Network (KEEP) – More about its tBTC product later.

• General Thoughts on #DeFi Value Capture and Token Capital Allocation: Better Features Could (Should) Come

• In the eyes of traditional financial practitioners, the value capture/token economic model in this field is still in its infancy, and we look forward to further experiments in the following areas:

It is worth rethinking about the issue/repurchase/dividend relationship: any good allocator in the capital market will know that issuing stocks when stocks are overvalued, repurchasing stocks when stocks are undervalued, and internal IRR no longer meet the minimum expected capital Send out dividends when the recovery rate is high. These are the three decisions that a CEO should make the most. As of now, the issuance/repurchase/dividend distribution mechanism in the DeFi field is still very dogmatic and fixed. Protocols should explore homeostasis formulas. (a) Accelerated inflation when token price is too high compared to protocol state, or split/customize based on project milestones (b) buyback when token price is very cheap compared to protocol state, (c) contemporary When the currency is between the extremes, dividends are issued instead of repurchases.

• Not all token holders are equal, so differentiate accordingly: Tokens serve as a bonding mechanism for all stakeholders, so heavy users/participants and passive holders/short-term speculators should be treated differently . Not enough thought and experimentation has gone into designing mechanisms to increase the lifetime value of protocols. Some possible ideas include holding period conditional value rewards, prioritizing redemptions given holding period and engagement, or penalizing inaction.

• Projects with a long-term vision should be issued with great care: equity is a very expensive form of financing, as existing owners effectively forego a portion of future profits. Similarly, squandering your token supply prematurely and carelessly means less room to maneuver in response to change in the future (or risk losing your credibility, which causes the token price to drop), and risk successors Risk of dwarfing you with a more aggressive and/or thoughtful design.

• The breakthrough of blockchain-native legal currency stablecoins (USDT, USDC, Dai, DCEP, Libra, etc.) may pose challenges to the sovereignty of most non-first-tier countries, similar to colonialism in the 17th and 18th centuries

The USD/RMB Stablecoin is a game-changing invention that sends money through layer 1 digital goods or controlled nodes, entirely via existing internet infrastructure.

Through B2C applications (Facebook, WeChat, etc.), citizens of any country can now transact in non-national currencies. The winner should be a more "responsible" currency. The winning state effectively "colonizes" the losing state, as this increase in market share hinders the losing state's ability to tax and/or inflate directly, thereby disempowering its government.

Stablecoins are an entry-level "drug" similar to BTC, but the impact of the first order may increase the dominance of USD/EUR/JPY/RMB, and any tier 2-4 countries will be the first to "ultra-dollarize."

• The "good plus good" effect: With the help of #DeFi infrastructure, the combination of digital goods that promote blockchain-native fiat currencies and stablecoins should lead to extremely useful digital-native businesses

• Good plus good effect, noun: multiple factors work together and influence each other. The plus-plus effect is a result that is far greater than the sum of its parts.

• MLC believes in the following combinations:

Layer 1 + Layer 2 as Digital Goods Powering Permissionless Apps

As a financial industry chain, #DeFi infrastructure that provides various types of financial services,

• ...will one day lead to a real commercial landing. From today's perspective, these new formats are either unaffordable or impossible. At present, although this ecology only serves dog gambling and leveraged gambling today, we can't just see the swamp in front of us, but see the tall buildings in the future from the swamp.

• secondary title

• Every item of the financial statement can be repackaged and sold/owned by anyone.

The definition of sovereign/nation-state will evolve. New agents of violence have emerged. All of these institutions can provide violence as a service in exchange for "tax money".

Everyone can now be a stakeholder on a hyper-local and global level - user equity bonds paid for coffee at the local coffee shop and game/movie royalties earned for participation will co-exist in personal or escrow wallets.

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Risk Summary/Practical Considerations

Is liquidity mining the new paradigm?

As a casino owner, Gambling Dog gives them a little bit of your casino equity every time they place a bet. What do you think they will do? Of course, it is to call on your friends and friends to stud together. At the same time, your casino will receive a burst of pulse-like income. The question is, if all the casinos in town do this, is it enough to bet on dogs? What should I do if the loss is over?

• Isn't this a Ponzi scheme and a bubble?

• What good is beer without foam? And in a way, drunk people tend to be more creative. Capital and vision attract talent, talent strives for it, and most fail, but the few who succeed create the future we live in. Is a vision worth investing in if it doesn't spark a bubble? You know, when stocks were first invented by the British, they were available for pirates to share bounties. The birth and prosperity of any industry requires multiple iterations of the cycle, and in the end the blockchain industry, we hope that it can "equitably motivate everyone" and create value for everyone.

• What can burst the bubble?

• Injunctions from the SEC and others. Remember, these are fake securities.

Tier 1 Fees that are too high will churn users and eventually lead to a drop in metrics.

• Existing ecosystem capital drain + external funding eventually hits this point when the market cap of #DeFi as a whole requires too much capital to sustain.

• DeFi code is complex, and there may be systemic risks in both code and leverage, prone to liquidation at various prices, failures/errors, and hacking. A big wave is enough to kill it.

• What long-term risks need to be aware of?

Premature tokenization and profit/fee sharing can hinder project flexibility.