The New World of DeFi: The Emerging School "Picks up Money" and the Classical School Takes Over
Editor's Note: This article comes fromHoneycomb Finance News (ID: fengchao-caijing), Author: Kyle, reproduced by Odaily with authorization.
Editor's Note: This article comes from
Honeycomb Finance News (ID: fengchao-caijing)
Honeycomb Finance News (ID: fengchao-caijing)
, Author: Kyle, reproduced by Odaily with authorization.
A comparison chart of the growth rate of the holdings of new and old leeks has been widely circulated in the currency circle. "Old leeks" prefer assets such as BTC and ETH. Waiting for DeFi coins to pale in comparison. Some people joked that the old leek can no longer understand the currency circle.
That may not be the case.
KOL star masters in the currency circle have experienced bull-bear rotations, and are also senior players in the early DApp explosion era. There is almost no threshold for playing DeFi, and they are the first group of people who ran into DeFi to "get money".
Niu Fengxuan, the founder of DappReview, and the big V in the currency circle "Super Bitcoin" are also participants in this round of DeFi wave. Their positioning for the "new leek" crowd is those old DApp players who have the ability to obtain information and execute.
As a result, "old leeks" have split in the DeFi wave. The emerging faction is busy participating in liquidity mining to share the early dividends. The classical faction is still accustomed to speculating on centralized exchanges. A little carelessness has become some new DeFi coins. The receiver.
DeFi, which was entrusted with high hopes of transforming traditional finance, was the first shot to kill the primary market. Liquidity mining has subverted the previous "exploitation" method of getting coins in the currency circle. The business model of cornerstone-private placement-public placement and then going to the secondary market is not applicable to DeFi.
The token allocation is 0 reserved, and the automatic issuance of tokens by the protocol is like a gunshot. No matter whether you are a local tyrant or a small individual, you have to "excavate" from the same starting line, and the decentralized transaction starts simultaneously. The distribution of tokens is transparent, and retail investors also have the opportunity to climb up the food chain.
When the stadium is hot enough to bubble, it is even more important to judge where the gunshots sounded than whether the track is OK. If you want to make a profit in DeFi, obtaining information about DeFi projects and quickly judging and executing them has become a more important weapon than the amount of funds.
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Veteran DApp players stay up late to mine YAM head mines
In the early morning of August 12, the DeFi community returned to the "sleepless" state of 2017, and the group of friends enthusiastically discussed a new DeFi protocol called Yam Finance (hereinafter referred to as Yam).
Translated into Chinese, Yam means sweet potato. It is an experimental DeFi protocol developed by a foreign team. At 3:00 a.m. on the 12th, the governance token YAM was officially issued in the form of pledge mining. Overseas communities refer to those who dig YAM “sweet potatoes” as farmers. In the domestic currency circle, the more customary title is miners.
KOL star masters in the currency circle stayed up all night in front of the computer, waiting to mine the YAM "head mine". It was only 3:05 in the morning, and the discussions in the community were one after another:
——Many VCs in Silicon Valley are digging. I didn't expect fomo to grow so fast!
——In fact, it is Ampl’s self-deflation and inflation mechanism + YFI’s issuance mechanism + Compound’s governance model.
There are two key pages on Star Master's computer screen, one is Yam's Twitter, and the other is Yam's official website. More than 10 minutes before the excavation, he threw the link of Yam's official website to the group, "mortgage the eight mainstream DeFi coins, and mine YAM without risk. I intuitively see that this is awesome."
Unknowingly, it was 5 o'clock in the morning, and more than 100 million US dollars poured into the Yam fund pool within 2 hours. The star master watched Yam's TVL (locked funds) skyrocket, and the price of Yam's currency rose accordingly, quickly breaking through $70, and continuing to rise.
After the unbearable star master woke up from a sleep, there were thousands of messages in the community, "I haven't stopped all night."
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In the two days after August 12, the image of Yam's "sweet potato" spread throughout the domestic currency circle. Even veterans like "Super Bitcoin", the big V in the currency circle, went to be a "Super Bitcoin" after missing the first mine. A "farmer" who digs sweet potatoes.
Since the popularity of DeFi, Star Master has become accustomed to this kind of life pattern of staying up late to dig out the first mine. He often digs out the latest foreign projects on Twitter and telegram groups, studies the mechanism and gameplay of various projects, and quickly enters the market after selecting a project. This is exactly the same as his experience of chasing and playing DApp (decentralized application) in 2018.
Star Master believes that DApps are more like behavioral mining. For example, in gambling DApps, the betting behavior will mine project tokens, "similar to the PoW mechanism." This wave of DeFi liquidity mining is more inclined to PoS, "the more collateral The more you dig, the more you dig, and the distribution is based on capital.”
Although the mechanism is different, Star Master has experienced a large number of DApps and experienced its prosperity, and now he can play DeFi with ease.
DeFi differentiates old leeks
At 4:00 p.m. on August 13, Yam, which survived for 37 hours, finally lost its currency price to almost zero due to code loopholes. "Seeing that Yam is popular, I quickly learned how to dig it. Before I learned it, it collapsed," some players in the currency circle joked in the community.
It became popular overnight when it went online, and became a legend when it returned to zero. Yam, like many projects that have gone viral like fireworks, has become a phenomenon-level protocol. But more people are still confused when facing DeFi projects.
Miners are still a minority, because there are many barriers before and after participation. It requires you to capture first-hand information on foreign social platforms such as Twitter and Medium in advance, and also requires you to have the ability to judge the value of the project. You must also be able to use the Ethereum wallet, and you must find the official website of the project that is often in English... Done After a series of preparations, participating in mining also needs to pay a gas fee of more than 30 US dollars per transaction...
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A comparison chart of new and old leek positions circulated in the currency circle
During the period when DeFi was booming, a comparison chart of the growth rate of the self-selected currencies of "new and old leeks" was widely circulated in the currency circle. The old leeks buy BTC, LTC and other mainstream currencies, all of which are ±0 points or 1 point; while the "new leeks" hold positions in YFI, BAL, LINK and other new currencies, the numbers before the percent sign are all double digits. Someone ridiculed that the old leek can no longer understand the current currency circle.
Niu Fengxuan, founder of DappReview, told Honeycomb Finance that if you want to play DeFi, you must be familiar with using decentralized wallets like Metamask and quickly understand how to use DeFi projects. This does form a certain threshold. But for the old players of DApp, this is not a problem, "Because they are too familiar, they quickly rushed into the market to understand DeFi, just like opening a new money printing machine."
The old leeks in the currency circle are splitting up, and DeFi is that watershed.
This time, the main members of the emerging faction are the old DApp players. They stand at the forefront of DeFi and talk about which projects they play, how to mine, and how to arbitrage.
The classical school seems to be unable to see this new information, or it is difficult to get it when faced with information, or they still regard DeFi currency as a new project. They are more accustomed to speculating on mainstream centralized exchanges, discussing which new currency can be ambushed, and predicting whether BTC can break through the previous high.
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DeFi breaks the rules of "taking coins" in the primary market
During the last round of bull market, old leeks had a common way of thinking about investing in cryptocurrencies. First, they should look for projects endorsed and invested by celebrities or well-known institutions in the currency circle, and then inquire about channels to participate in private or public offerings.
Personal big Vs and investment institutions are often at the top of the investment chain in the currency market. The currency they get is called the cornerstone round, which is lower than the price of private placement. Old leeks with good resources and strong relationships may be able to get a cheaper cornerstone price.
But no matter whether they participate in fundraising or not, everyone has to wait for the project to be listed on the exchange and enter the secondary market to maximize their benefits.
In the past, in the primary market like the currency market, there were layers of "exploitative" currency acquisition rules. But in the new world of DeFi, this set doesn't work.
The token issuance rules are written in the agreement, and the fairness of "0 pre-mining, no private placement" is praised by the participants. No matter whether you are a local tyrant or a casual person, you can excavate at the same time, and the decentralized transaction agreement spliced into the project agreement allows The mined coins go directly to the secondary market.
"Super Bitcoin" believes that DeFi has transformed the primary market of the traditional currency circle. "Yam has no pre-mining, no crowdfunding, and no team rewards, which means that the media publicity is invalid, the capital advantage of the Token fund is invalid, and the advantage of listing currency on the exchange is invalid. Everyone is basically on the same starting line. In the past seven years, all the games in the circle have been completed. overthrown."
In the view of a senior DeFi player, this is equivalent to the project party issuing the minting rights to the market, "that is to say, retail investors can also enter the primary market." Of course, institutions can also participate in projects like Yam, but no longer With the advantage of taking coins at low cost, the risk-benefit ratio faced by local tyrants is comparable to that of Xiaosan.
From the perspective of "Super Bitcoin", playing DeFi well tests the investor's ability to obtain front-line information, as well as the execution ability of hands-on coins. In other words, cognitive ability, learning ability, and execution ability are the key factors for an old leek to be able to advance to a "new leek". Players who lack these are often faced with the situation of getting out of DeFi or even becoming a successor.
Already investors have stumbled on Yam.
On the day when the YAM coin was produced, exchanges such as Bibox immediately caught this hot spot and quickly launched the coin. At that time, the hotly hyped YAM once rose by more than 150 US dollars, and some exchange users rushed to get on the bus when they did not know that Yam had an elastic supply mechanism and the protocol code was not audited. YAM drops below $1 and they probably don't even know why.
That is to say, YAM's upsurge in the exchange is only short-lived. Once reBase is triggered, the smart contract will issue additional tokens to stabilize the currency price. Therefore, even if there is no code loophole in Yam in the end, it is a foregone conclusion that the price of YAM currency will go down. Exchange users who speculate in accordance with the "classical thinking" are very likely to suffer heavy losses.
For users who pledge their assets to participate in mining YAM, when the currency price rises, they can cash out at a high level in the decentralized exchange agreement (DEX) at any time. Even if they do not cash out in time, the pledged assets can still be withdrawn, and the loss comes more from the Ethereum network transfer fee they paid when mining. Although the fee is not low, it is far lower than receiving orders at high levels in the secondary market.
In the investment-exit food chain, users participating in DeFi liquidity mining stand at the upper end of centralized exchange users. DeFi has accelerated the differentiation of investors in the currency circle. When it became a Dao alone, some people were busy "picking up money", some people couldn't see the Dao, and some people went to the wrong entrance and became a receiver.
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How does "Classical Leek" embrace DeFi?
On August 18, data from Oukeyunchain showed that the total lock-up volume of Ethereum DeFi projects reached 6.67 billion US dollars, continuing to create a record high. Under the surge in the amount of money absorbed by DeFi, established public chains such as Tron and EOS have accelerated the construction of the DeFi ecosystem. Huobi has established a DeFi Research Institute, and institutions such as LD Capital have announced investment in DeFi. The roles of all links in the currency circle want to catch up with the high-speed train of DeFi.
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The total lock-up volume of DeF has reached a new high
Buying YAM, CRV and other DeFi coins on the exchange and being harvested "classical leeks" is tired of the traditional thinking of speculating in coins. Some people have come to realize that it is better to join the camp of liquidity mining than to take orders in the exchange; some people are afraid of the new risks that come with new things, and decide to stay away from DeFi mining coins, and at most participate in IEO New DeFi currency subscribed at a low price.
Indeed, in the DeFi world, which was born less than a year ago, the new atmosphere is changing day by day, but chaos is also growing. On Uniswap, the "earth dog" projects that cut and leave are rampant; after the YFI agreement, two copycat agreements under the banner of forking have already run away.
With the gradual entry of large funds into mining, the mining interest rates of various mainstream DeFi projects have gradually decreased, and the wealth effect is not as it used to be.
Xingzhu believes that to choose a new potential DeFi project, it is very important to grasp the information. "Generally, foreign projects are relatively reliable. It depends on the popularity of Twitter discussions and whether its mechanism settings are reasonable. If there is a technical master's endorsement, Relatively stable."
What are the channels for obtaining first-hand information?
Niu Fengxuan said that generally mainstream projects such as COMP and BAL will be reported by leading Chinese media in the industry; he himself will often follow the Twitter and articles of overseas media and some KOLs. From time to time someone shares a new project.
For projects that have already been launched, Xingzhu believes that one of the most important evaluation indicators is the amount of funds locked in the project. In the current Ethereum ecosystem, Maker, Aave, and Curve occupy the top three locked positions, accounting for more than 50% of the total locked positions. As the future progresses, the smaller the lock-up volume of the project, the more cautious investors need to be.
Another senior DeFi player added that in addition to the amount of locked positions, the number of users and token trading volume of the project should also be used to determine whether it really has market popularity. If you want to be more forward-looking, you must start with the token mechanism, project model, technical level, team strength, safety factor, etc., and predict the future development of the project in advance from the fundamentals.
