A picture at the beginning: DeFi, Uniswap and the local dogs
"The platform is fine, pay attention when choosing coins."
The investor who said this is an old coin lover in the industry. Since May, he has gradually become a regular customer of Uniswap. At this time, he believes that it is "the time when Uniswap is in the limelight."
"Don't play domestic projects, there are many local dogs running away," he said.
"Earth dog" is often mentioned in some recently established currency fan groups. Since Uniswap became popular and DeFi currencies skyrocketed, some people took the market driven by DeFi this time as the dividing line and divided them into "classical currency circle" and "new currency circle". Sweet potatoes are all very familiar words.
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Fomo Emotions Breed Earth Dogs
"Soil corresponds to domestic production, and the Tugou project is the domestic project currency on Uniswap." The aforementioned investors explained to Blocklike. Over the past two months, he has seen the status quo of many local dog projects: "The proportion of domestic projects on Uni is too high. I have seen 1,500 ETH running away, and 0.04 ETH running away. It is very likely that in the end it will be mutual cutting within the group.”
In the community, most of the "earth dogs" who are applauded by investors are like this: no white paper, no founding team information, and blessings of various popular concepts.
Such projects are often simple and straightforward, and the "earth dog" itself is a selling point, showing off its sickle brightly, with the purpose of attracting bold investors to come in and take a gamble.
These local dog projects discussed in the group have increased by hundreds of times and thousands of times, which can fully satisfy the fantasy of "getting rich overnight". Take a piece of the pie, grab it and leave. Some currencies with higher gains have also been given titles such as "King of Earth Dogs". Speculation is never a false demand.
Some investors who are keen on the Tugou project hold the attitude of "willing to bet and admit defeat", hoping that they can become the protagonists in the stories of sudden wealth circulating in the group.
"AAPL is a piece of shit."
"ruze, this is the token of the imitation disk ampl. It is a local dog project party, and it has been shipping."
There are many similar discussions about earth dogs. However, how many people can really make money from dogs?
"I lost money, and I'm embarrassed to say it in the group. I saw other native dog projects flying again, so I wanted to try again." An investor from the "Uniswap native dog project exchange group" quietly tell us.
In contrast, many investors are also sounding the alarm.
"It's crazy now. When I played Uni in May, few people knew about it. It started to get out of hand in mid-June. Now it's crazy." The investor who contacted before emphasized to Blocklike again, " At present, 20% of people are playing Uniswap and new concepts, another 60% are still stuck in CEX calling orders, and 30% are playing plate.”
He gave an example: "Look at the NUGS coin, there is actually no bright spot. It's 30 times the opening price, and there are leeks buying wildly. You know, I dare not touch the 10 times the opening price."
As an experienced investor who entered the market in 2017, he is cautious about the current market of earth dogs flying around. As the popularity becomes more and more popular, he already has a set of methods to identify "earth dogs". Participate in such a risky project.
"Before I look at a project, I first check to see if there are any foreigners discussing it (in the overseas community). If there is no foreigner mentioning it, it is likely to be a local dog. In addition, there are also a lot of data to observe. If you check the block and other Look at the proportion of holders, and track the wallet addresses of big players. Then look for telegram groups and Twitter, and you will know as soon as there is any news.”
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Dream back to 2017, incremental entry?
After the DeFi concept detonated the Dex market, more and more people discovered that the cost of issuing Uniswap tokens was basically zero, and its liquidity was even comparable to the 2017 ICO era. enter.
According to a CoinDesk report, on August 13, the transaction volume of Uniswap in August reached 1.76 billion US dollars. Over the past 24 hours, Uniswap saw $213 million in trade volume, accounting for more than 60% of all DeFi trade volume.
The Fomo sentiment among investors is palpable.
Just yesterday, belmore, the core developer of the YAM project, finally announced that the rescue failed. YAM crashes. The locked value once reached 600 million U.S. dollars, and the entire life cycle of the DeFi project, which has been treated by many stars, is 36 hours. The Fomo sentiment is very obvious.
On Uniswap, there is a strong fragrance of "2017 ICO period".
This is a bold and innovative decentralized trading platform. Its biggest feature is the Automated Market Maker (AMM), which replaces manual quotations with established algorithms. Through the "constant product" model, Uniswap enables users to directly exchange tokens in the exchange pool, lowering the market-making threshold. According to the official introduction, this mathematical model is X*Y=K (X is the number of ERC20 tokens, Y is the number of ETH, and K is a constant. X and Y are in a trade-off relationship). Someone buys ETH in this contract, and the amount of X will increase.
The main advantages of this model are:
1. Reflect the price according to the transaction situation. When someone exchanges Y tokens for X tokens (that is, buys X), the price of X will rise, and in turn (sell X), the price of X will fall, which is in line with the general transaction price law.
2. Maintain liquidity. The algorithm provides liquidity regardless of the size of the liquidity pool.
3. It is not suitable for large-amount transaction exchange. When the pool is small, such as 10 ETH in this pool, when large funds want to enter, they must be split into many coins and entered in batches. At the beginning of the distribution of chips, the big funds and small funds are relatively fair.
What is even more stimulating to issuers is that it only takes 10 minutes and tens of dollars to issue coins on the platform. Uniswap does not have a project review mechanism. Here, the project party only needs to allocate the total amount of coins and inject assets into the two pools to start the transaction. This has become a new distribution method that many "circles" shine.
You must know that in 2017, the process of issuing coins and going online requires a lot of BTC and sorting out multiple resources to do it. Would you be happy if you were the issuer?
According to the rating report, since its launch in October 2018, the number of Uniswap users has grown exponentially. Up to now, it has a total of about 140,000 users, and the compound growth rate of the number of users per month is about 34%.
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The DeFi market is overheated, be wary of risks
How should we view this wave of DeFi boom?
"Starting from COMP, with the gradual rise of the market, we have seen YFI, YFII, and YAM, which has been charged with 400 million US dollars in the past two days. This phenomenon-level liquidity mining product has completely subverted people's perception of DEFI. Opinion. There are products such as Uniswap, Balancer, and Curve, which pose a great threat to centralized exchanges, and the trading volume is increasing day by day." The captain from BlockArk said in an interview with Blocklike.
The captain told Blocklike: "The market in 2017 is undoubtedly a speculative market. It is no exaggeration to say that 99% of those who participate in the digital currency market are speculators. The function of Ethereum was once considered to be only "issuing coins." ", the cycle of new project release, fundraising, currency issuance, listing on the exchange, and harvesting is only a few weeks. In such an atmosphere, it is difficult to have a good product that can be precipitated, and the market does not allow such a product. " PPT fraud projects such as "Space Chain" can gain the attention of the market, which can be used as the best evidence."
According to his analysis, after 3 years, market participants and funds have undergone tremendous changes. Exchanges have become compliant, institutions have entered the market, financial derivatives have been improved, and retail investors have been ruthlessly harvested out, making this speculative market After passing the initial value discovery stage, it has come to the stage of value precipitation; Bitcoin/Ethereum has also transformed from a speculative product in the early years to a commodity that focuses more on transactions. The commercialization of digital currency determines that the demand for liquidity can be changed. From the original need to buy and sell spot goods to the demand for loans, to the need for hedging/arbitrage and other parties, centralized institutions cannot meet the transparency and liquidity that the asset side hopes to obtain. When it comes to security, the birth of DeFi products just fills this gap.
After three years of iterations, the DeFi products on Ethereum are now very different from those three years ago. Three years ago, ETHLend (AAVE), which was unknown three years ago, shined with flash loans this year. In June, it detonated the market with liquidity mining, and Curve, which increased the minimum slippage and great liquidity for stablecoin exchange, V1 was released in 2018. After V2 was released in May this year, relying on the sudden wealth effect of long-tail assets, Uniswap, which crushed centralized exchanges in one fell swoop, far exceeded the DeFi products in 2017. These new products are sufficient to meet the liquidity needs of assets, and have really come to the demand side from the white paper.
At the same time, he also reminded the risks: "Currently, the primary and secondary markets are also quite hot, and there are countless coins several times a day. NEAR directly caused Coinlist to shut down for two consecutive nights, and all the coins locked for one year were robbed. You can see the madness of the market. I hope that when you enjoy this madness, you should also pay attention to risks. For example, YAM, many people collapsed before they understood what was going on.”
"This is also the price of trying new things. When you see the extremely high returns and APY of DeFi, you must know that returns and risks are positively correlated."
Text / Blocklike Lan Wen
Editing / Blocklike Ange
