DeFi crash?
In the past few days, the prices of cryptocurrencies have plummeted, especially the currencies in the ETH/TRON DeFi sector. There are a lot of currencies that have plummeted by more than 60%. In the words of Mr. Nangong Yuan:
On September 4, Bitcoin and Ethereum took the lead in the collapse. On September 5, Ethereum defi and wave field defi took the lead in the collapse. On September 6, the eos series began to collapse. Now that the collapse is over, it is solid, and the dishes are cleaned up to welcome the new era.
In the first two months, DeFi was indeed too popular, and the popularity was not worse than that of ICO back then. The currencies with dozens of times or hundreds of times of increase also aroused people's FOMO sentiment, so more people rushed in. The more people come in to play, the more funds will be brought in, and the more funds, the greater the increase, so more people will come in... thus forming a spiral upward trend.
DeFi first started from Ethereum, then went to Tron, and finally the heat spread to EOS DeFi. Everyone knew that this crash would happen sooner or later, but they didn’t know when it would happen. SUSHI is just a tipping point. , SUSHI's plunge just accelerated the process.
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1. Will the popularity of DeFi pass?
I wrote in the last article that although the ETH/TRON DeFi currency has plummeted, the popularity of EOS DeFi has not dropped. It seems that it is still booming. Projects such as fishing, diamond mining, and coral mining are one after another. , I believe there will be many new ways to play and new projects in the future, at least those who have played on ETH DeFi will also play it on EOS DeFi. For example, ETH DeFi's nesting dolls, smart pool functions, etc., currently EOS also has such DeFi products.
Even for ETH/TRON DeFi, it cannot be concluded that the game is over now, as Lao Bai said in Weibo, it is just defoaming. We should not be too pessimistic about this industry.
Regarding mining, Laobai has her own way, and often shares valuable information on her Weibo.
After this wave of baptism and elimination, those serious and deeply cultivated DeFi projects will only fly higher. Correspondingly, those projects that just want to make a wave of money and then leave will eventually be eliminated.
The popularity of DeFi will drop, the participants will become more rational, and the enthusiasm for participating in DeFi projects will be lower than before, and the increase and speed of DeFi will not be as hot as before. After this defoaming, the development of the entire DeFi industry will become more rational.
DeFi is nothing more than the exchange between different currencies, mortgage lending, etc., and these are also supported by real market demand. Although there are indeed hype and bubble elements, there will still be some transactions in the end. need. This industry will continue to develop, and will continue to improve, integrate, and optimize. After some elimination, there will definitely be some excellent top DeFi projects left behind.
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2. Impact on centralized exchanges
The impact of DeFi on centralized exchanges is still relatively large.
For most cryptocurrency investors, the first thing to use is a centralized exchange. After all, its use threshold is still relatively low. It can be used as long as it is registered. It is not much different from our use of other websites. the difference. But centralized exchanges also have many disadvantages.
For example, the user's funds are stored in the exchange wallet, and the private key is controlled by the exchange. There is indeed a risk of running away. Once running away, the user will lose everything.
Moreover, the exchange will still have the phenomenon of pin insertion. When the big market comes, there will always be some problems of this kind on the exchange. For users, the real assets are stored in the exchange wallet, and we are in the exchange. The assets in the account are only the mapping numbers in the exchange database, so some exchanges can use the data to smash the market, that is, the tokens for transactions are not real tokens, but just created by the exchange out of thin air . What kind of market pulling and precise liquidation are all caused by some unscrupulous exchanges.
Many exchanges are not 100% guaranteed. Once a collective run event occurs on the exchange, the problems of the exchange will be exposed. For example, due to the popularity of EOS DeFi recently, many people are withdrawing EOS from the exchange to their wallets. As a result, some exchanges began to limit the performance, sometimes the speed limit, sometimes the limit, it is said that in a well-known domestic exchange, it is not so smooth for everyone to withdraw coins recently, the customer service will say this for a while, and that for a while Said, maybe one of their currencies is indeed out of stock.
So in the past two days, everyone has also seen that someone has launched a coin withdrawal campaign. This wave of DeFi coin withdrawals has a relatively large impact on exchanges.
On the contrary, especially the recently popular AMM-based DEX, they are the exchanges with the highest degree of decentralization, all operations can be queried on the chain, everything is based on code, and it is a human-machine transaction, which can be done immediately There is no need to match the deal, and the exchange cannot conduct some black box operations.
Therefore, in the DEX based on the automatic market maker (AMM), the exchange cannot use fake tokens to smash the market, and as the DEX based on the AMM continues to grow, the pricing power of the Token is also shifting from the centralized exchange to the DEX. Transfer, due to the restraining effect of DEX, the pin insertion and data smashing of centralized exchanges will be much reduced.
For users, it is actually more convenient to put assets into their own wallets and then trade on DEX, without registration, and assets are always stored in their own wallets, which is obviously safer, but for some beginners For beginners who have entered the industry, DEX and CEX will coexist in the future, and DEX is constantly eroding the market share of CEX.
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3. The reaction of centralized exchanges
For this DeFi boom, different centralized exchanges also have their own coping strategies. For example, for some popular DeFi currencies, many top exchanges have also launched soon, such as SUSHI tokens, and even the three major exchanges The online trading shows that the competition of exchanges for users and traffic is still relatively large.
For the leading exchange Binance, it has responded relatively quickly to this DeFi boom, such as directly acquiring DeFi projects, launching pledge mining business, and providing exchange pool services.
And yesterday (September 6), Binance announced the launch of new currency mining, and BNB, BUSD, and ARPA can be used to mine a new project: Bella Protocol (BEL).
According to the Binance announcement, starting from 08:00 on September 9, 2020 (Hong Kong time), users can mine BEL tokens in BNB, BUSD, and ARPA mining pools for a total of 30 days.
Binance will list Bella Protocol (BEL) at 14:00 on September 16, 2020 (Hong Kong time), and open BEL/BNB, BEL/BTC, BEL/BUSD, BEL/USDT trading markets.
Compared with other DeFi projects, Binance still has great resource advantages. After all, it has been deeply involved in the industry for so long. For example, for DeFi projects, Binance can at least go online and promote them to its platform users. For some excellent DeFi projects, Binance can also provide financial, technical and other resource support.
If you have BNB, BUSD, ARPA in your hand, you can mine the token BEL on Binance.
This article only represents personal opinions, not as investment advice, investment is risky, investment should consider personal risk tolerance, it is recommended to conduct in-depth investigation of the project, and carefully make your own investment decisions.
This article only represents personal opinions, not as investment advice, investment is risky, investment should consider personal risk tolerance, it is recommended to conduct in-depth investigation of the project, and carefully make your own investment decisions.
