Will DeFi bring a bull market?

巴比特

特邀专栏作者

2020-07-12 08:00 (UTC+8)

This article is about 2967 words, reading the full article takes about 5 minutes

If we want DEFI to bring a bull market, at this stage we can only hope for more wealth effects, that is, more bubbles.

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If we want DEFI to bring a bull market, at this stage we can only hope for more wealth effects, that is, more bubbles.

Editor's Note: This article comes fromBabbitt Information (ID: bitcoin8btc)Babbitt Information (ID: bitcoin8btc)

Babbitt Information (ID: bitcoin8btc)

, by Monte Carlo, published with permission.

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1. The popularity of Defi

The blockchain market has been flat for a long time, and only recently has it found a trace of enthusiasm, which is brought about by Defi.

At the recent blockchain international week conference held in Hangzhou, Defi has also become a well-deserved protagonist, so that many voices in the market have begun to say that the next round of bull market will be brought about by Defi.

Before proceeding to the next discussion, I think it is possible to give a simple definition of Defi. I wrote a popular science article before, "Everyone is talking about Defi, what is Defi?" "Introduce what is Defi, which gives a clear definition:

Defi is a general term for various financial services in which users hold their own private keys and digital currency is the main body.

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2. The business competition between Defi and Cefi

At present, Defi's business mainly includes: decentralized transactions, loans, mortgages, wealth management, and may include some derivatives in the future.

These businesses are basically covered by the current Cefi, and Defi is just going through it again in a decentralized way.

Of course, Defi has many innovations, such as cross-chain, such as automatic market-making mechanism, such as asset synthesis, etc. These are the innovations of Defi and the potential of Defi, but there is no such thing as yet. There is not enough trading volume to support the formation of scale.

I have also seen other bigwigs’ concerns about Defi. They think that if Defi is just going around in the existing circle, it will not bring more new things to the industry.

Pan Chao, Head of MakerDAO China: If DeFi wants to connect to the real world, it must first recognize the reality. DeFi is not an island of assets. When the fruits on this island are all eaten, you must transport food from other places, just to solve the problem on the supply side. In the past, there were only encrypted assets on DeFi, but now progress has been made, such as bringing legal currency assets and stable currency assets to DeFi. The next step is to get in touch with more real assets and map them over, including electronic gold, accounts receivable, etc. , are to solve the problem of the supply side. You can only be productive if you are full first.

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3. Stock

At present, the blockchain market as a whole is mainly based on competition for stock, and in the stock market, it is mainly based on transactions, and lending can only be ranked second;

Interestingly, although everyone's demand for Defi is not high, everyone's demand for Defi project tokens is very high, and even the demand for Defi tokens is much higher than the demand for Defi business, which is not healthy.

Some people also think that it is a good thing that there is a high demand for the tokens of Defi projects, at least there is demand, and there is demand and there is enthusiasm. However, this popularity is based on the rise in the price of tokens. If the price of tokens rises, the popularity can be maintained. Once the price cannot maintain the rise, the popularity will begin to decline.

Now the tokens are issued and the projects listed on the exchange are all projects with certain accumulation and market popularity, coupled with the market hype, all have such a good market performance. However, the overall demand for lending in the entire market is limited. If there are more lending platforms rising in the future, they will face the problem of dividing the cake in the stock market. Except for a few leading companies, it is difficult to find some Defi projects behind Supported by the real trading volume, the token price is likely to be difficult to react too much.

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4. Increment

If you want to really bring about a bull market, you must seriously consider the increment. The increment includes several aspects: the first is the increase in personnel, and the second is the increase in business.

At present, the influence of the blockchain is growing, but most people are limited to knowing some concepts and news. If you want to let him really enter the operation level, such as letting him go to the exchange to buy digital currency, it may be a step away. The difference is far.

Because Defi has the property of decentralization, it needs to master the private key by itself, so there are many new concepts and many additional operating procedures. These are the thresholds, so it is a must to rely on Defi to add more users. This is a very difficult thing, and we must continue to do a good job in science popularization and user guidance.

Even if you continue to popularize science with your heart, it is very difficult to increase users; even if there are new users, there is a high probability that these new users will come from centralized exchanges.

These users already have a certain theoretical foundation and have a certain understanding of blockchain and digital currency, but they have also developed the habit of trading on centralized exchanges. If you want to attract them, then you There must be special business that can attract their business, which is what we call business increment.

At present, whether it is trading, lending or financial management, the Defi industry is no different from the services provided by centralized exchanges for the time being. Under the same circumstances, it is still difficult for you to surpass centralized exchanges in terms of efficiency and user experience. of.

What advantages do we have over centralized exchanges? What can we provide that centralized exchanges cannot provide? Security and self-control of the private key are one of the advantages, but this advantage is far from enough.

Because the three major exchanges have not had too many security incidents, even if an accident occurs, they are basically paid in full, and users feel that it is still safe. So what else can Defi provide besides security? What innovative businesses can only be done by decentralized exchanges, but cannot be done by centralized exchanges? How does the experience of decentralized exchanges far exceed that of centralized exchanges? These questions must have clear answers.

This is thinking from the perspective of increment. Increment belongs to the fundamentals of the industry and is the foundation of the bull market.

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5. Wealth creation effect

Of course, some people say that the trading volume is not the most important factor for the bull market to come or not, but the wealth-creation effect is the most important factor, and the wealth-creation effect only needs air and bubbles, and has little to do with fundamentals.

They think: Why did the bull market come in 2017? It was because at that time that the issuance of ICO tokens triggered a beneficial effect and triggered crazy participation in the market.

In this round, why some people began to say that Defi will bring a bull market is because Defi’s currency issuance and the model of “borrowing and mining” have triggered a certain degree of wealth effect and triggered certain market expectations.

Defi is a good entry and a trend in the future. It is still in its early stage. Whether it is the existing functions, product usage, smoothness or the flow of people involved, it is limited, and how much wealth it can generate The effect is also subject to natural constraints. We can keep an eye on this, but at the same time, we must look at the development of Defi rationally.