OKEx Xu Kun: Encrypted Assets Redefine Value Boundaries
Editor's Note: This article comes fromXu Kun's Sixianghui (ID: gh_0c9473726b11), Author: Xu Kun, published with authorization.
Editor's Note: This article comes from
On August 6th, I shared my recent thoughts on the value presentation and conversion of Token, the trend of DeFi explosion, and the layout of OKEx's encryption ecology in the "2020 Cointelegraph Chinese Greater Bay Area·International Blockchain Week".
The following is the graphic record of this sharing:
At the beginning of July this year, I once talked about the overall structure of the exchange from the microscopic dimension. Today I will spend 20 minutes to share with you a new sharing. The sharing content has three parts: the first is Token, we In fact, from a macro perspective, it is a blockchain. From a micro perspective, let’s decompose and think about how the value of Token is presented and transformed. The second is DeFi, because there is actually a lot of heat in the market after June, and I will also share a key point in this area. The third is the layout of OKEx's encryption ecosystem, including some current work and a report for everyone.
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Token: the digital carrier of assets
The digital carrier of assets is Token. Token realizes the mapping from the physical world to the digital world. In terms of presentation form, on the one hand, traditional assets are digitized, and we can see that various assets are directly encrypted. Another dimension is the data elements that we have not realized value before, which can be confirmed and priced in the Token world.
Why is the first part of today talking about Token? Because the world of Token has gradually begun to be divided into two dimensions, one is homogeneous tokens, and the other is non-homogeneous tokens (NFT). What is homogenization? Bitcoin, Ethereum, and emerging public chains are broadly defined as homogeneous tokens. What is inhomogeneity? Every unit is unique. Each unit has indivisible attributes, but Bitcoin and Ethereum can be divided relatively infinitely, but non-homogeneity, such as encrypted cats, each Token has unique attributes.
After March, we noticed NFT. At present, the cumulative transaction volume of NFT has exceeded 100 million US dollars, the number of transactions has exceeded 4.7 million, and there are more than 16 projects with a cumulative transaction of more than 1 million US dollars. OpenSea is an NFT trading platform. It currently has more than 20,000 users. Compared with popular DeFi projects, the number of users is second only to Uniswap, kyber and Compound, and higher than Maker and 0x. Another example, Superrare, is a digital art market. At present, artists from 178 countries around the world have released more than 7,000 NFT artworks through this platform, with a total turnover of more than 1 million US dollars.
In the next few years, NFT is likely to show explosive growth. NFT will carry richer and unique asset values, and NFT trading platforms are also worthy of attention.
DeFi opens up programmable finance
In the second part, let’s talk about DeFi. As the name suggests, DeFi corresponds to CeFi. Strictly speaking, it is a programmable finance, that is, code programming, which integrates some lending, insurance and various financial dimensions in the traditional financial market in the world of DeFi. Or show it in the finance of programming.
Let’s take a look at the data in this ecology. In 2019, we think it is the first year of DeFi, because the data of DeFi began to be recorded in 2019, but it has reached 4.66 billion US dollars in 2020. This data is from the OKLink browser. The data, the data is still very accurate.
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Data source: OKLink blockchain explorer, August 4
Judging from the rising trend this year, the current data is more than five times that of last year. In July, I made a linear forecast at the Babbitt Summit. We think that the multiple and room for DeFi growth this year are still very large. The large space we think will bring some opportunities for the flow of DeFi new stock transactions. At present, this month we can look at the growth rate of the same cycle, from March to April, and from 4 to 5 cycles in the same cycle. In the last month, it has doubled from 2 billion US dollars to more than 4 billion US dollars. We can see that the growth momentum of DeFi is still very large.
There are several viewpoints on why DeFi will develop.
One is that multi-collateral promotes the rapid growth of DeFi. We know that the traditional financial world has a variety of asset types, categories and quantities. In order to promote the development of diversified financial businesses in the entire traditional financial market, the world of DeFi is the same. From the mortgage of Bitcoin to the mortgage of Ethereum and stable currency, we can predict that multi-collateral will still have a positive effect on the promotion of the entire ecology, because the size of the market and the type of assets are positively correlated, even beyond linear development .
The second point of view is that the growth trend of stablecoins is positive. Stablecoins have been tested by the market in the past four years. The total market value exceeded US$10 billion in May this year, and now it has reached US$13.42 billion, up from US$5.83 billion at the beginning of the year. The dollar has doubled and entered a stage of mature growth. Analyzing stablecoins from a macro perspective, our opportunities are still relatively large at present. Of course, financial and money matters in the market are prone to "black swans", so we still remind everyone to pay attention to risks. There will be a big reshuffle of stablecoins in the next cycle. It may be that stablecoins bred by DeFi have a lot of opportunities.
The third point is that DEX has actually made great progress compared to last year. DEX currently has three main modes. The first is the design where the order book and matching are placed on the chain. The advantage is to maintain the transparency and objectivity of the data. The disadvantage is that the requirements for the public chain are higher, and once a security problem occurs, it will be a relatively big problem. The second is the combination of on-chain and off-chain. There is a contradiction here, that is, there is a challenge of credit component. The third is the automated market maker model. The advantage here is that there are very few storage and computing resource requirements for the blockchain, but the disadvantage is that it is suitable for small transactions. Small retail investors are willing to trade on Uniswap. We are currently doing research and development on this , our research and development team will use this mode to do it, because the design will be more friendly.
Data source: Dune Analytics
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Data source: Dune Analytics
In the field of lending, Compound is undoubtedly a phenomenon-level project. All major exchanges have listed its tokens, and OKEx is the first platform to list perpetual contracts.
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Data source: OKLink blockchain explorer, August 4
Just mentioned so much DeFi data and so many representative projects, all the questions can help us support the future development and trend of DeFi. But we have three data that are worth thinking about. The first data is a comparison of dimensions at the same time. The growth rate of locked positions is higher than that of users, which shows that for users, the education cost and threshold of DeFi are still relatively high. .
Data source: Dune Analytics
Since the beginning of this year, DeFi users have grown from 100,000 to about 300,000, an increase of 2 times. The lock-up value has increased from about 700 million US dollars to more than 4 billion US dollars, an increase of nearly 5 times. Especially in the last month, the lock-up volume has doubled from 2 billion US dollars to 40 US dollars, but the user growth is only about 30%. DeFi is still in its infancy, and how to achieve a breakthrough in user scale is an important topic in the next stage.
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Data source: Dune Analytics
Judging from the data of active users, a month ago, Compound’s weekly activity was 7,500, but now it is only about 2,000 to 3,000. The total weekly active users of the Top 10 DeFi applications was 25,000 a month ago, and now it is about 24,000. In fact, the number of active users has not increased by magnitude, and even dropped slightly.
Having said so much, although DeFi has received the attention and attention of the market, there are still various problems and challenges. We can take a look, because at present we may have its own stable currency in the DeFi ecology, and even extension products and various financial scenarios, which also have various problems.
The first one is code bugs. It happened two or three times in the first half of this year, and the risks here deserve everyone's attention.
The second is systemic risk. There will be black swan events in the traditional market involving money. Of course, sooner or later, a relatively safe risk control mechanism should be established here to ensure that the DeFi ecology can be normally resistant risk capacity.
Another is how to chain traditional assets, which is a very big challenge. This is what we have been promoting, or many people in the market said that I have changed the chain before, or various things. But the real asset on-chain is still a very big topic.
Finally, I would like to share with you the situation of OKEx's encrypted asset ecology, what we have done and the dimensions of the business.
OKEx has two major strategies, the vertical one is the full life cycle of users, and the horizontal one is globalization. In terms of the whole cycle, we provide services according to the user's life cycle. From trading, to financial management tools to investor education, we meet the full life cycle services through a complete product line. As long as you start trading, our product system is fully satisfactory. Our exchange launched options at the beginning of this year, and we also launched contracts for small currencies. The feedback from users is still very good.
Our horizontal strategy is globalization. This is a question we have been thinking about and reflecting on, because we said in 2018 that we want to be globalized. Why has there not been a truly localized exchange that has gone global.
In terms of globalization, one of the things we think about is the real localization of products. Overseas product managers can really develop situations that meet user habits and respect their local culture, and truly respect their humanistic environment and trade with them. We have done this Great article. In May of this year, our overseas version was officially launched, and it was developed by our product manager in the United States.
Having said so much, what is the core competitiveness of OKEx's overall strategy and our direction? Including what have we done? You can see that OKEx has been going for seven years, why can it become more and more solid, and where are the barriers? We have several dimensions that all centralized exchanges must adhere to. The first is system performance. This year, our "Trading System 3.0" was launched, covering the entire business line of spot, delivery, perpetual, and options. Compared with the previous old system, it has been greatly improved, the delay has been reduced by 90%, and the stability and concurrency capabilities have been improved by ten times.
There is another security guarantee. In terms of security, we have our own security system and have established cooperation with well-known security organizations in the industry. With excellent security isolation and risk control, no asset security incidents have occurred.
There is also a risk control mechanism. OKEx has a series of risk control measures such as price limit rules + reasonable mark price + gradient margin + intelligent liquidation algorithm, and is also constantly iteratively upgraded. Our perpetual and delivery continued to have zero allocation, and the risk reserve also exceeded 140 million US dollars.
