ETH2.0 keeps bouncing tickets, can Serum solve the DeFi dilemma?
Produced | Odaily (ID: o-daily)
Produced | Odaily (ID: o-daily)
DeFi (Decentralized Finance), which is in full swing, has ignited the encryption market this summer.
According to data from DeFiMarketCap, the value of locked positions on the chain has surged from US$1 billion to US$12 billion, an increase of 1100%; the market value of DeFi tokens has exploded, with an increase of more than 1600%.
In particular, some popular DeFi projects, which are eye-catching and gold-winning, show strong development potential, which makes CeFi feel uneasy.
In order to maintain its first-mover advantage, CeFi, represented by the three major exchanges, began to fight back, marching into DeFi, and tried its best to promote the integration of the two, forming a "DeFi+CeFi" pattern.
Odaily noticed that in addition to the three major exchanges, the derivatives exchange FTX has also begun to enter DeFi, and has carried out in-depth cooperation with the DeFi project Serum. Then, Serum also launched Serum DEX, the first decentralized exchange.
Recently, Serum has launched an ecological construction plan, recruiting partners to develop projects in the Serum ecology, and the ecological node EcoSerum will also provide project parties with "double funding" support comparable to Ethereum: the start-up capital is 10-20 million SRM (approximately 2,000 ~$40,000); when the project is officially launched, an additional SRM of 5,000 to 100,000 (approximately $10,000 to $200,000) will be obtained.
The ambitious FTX is trying to build its own DeFi ecosystem.
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Outpost: Serum DEX goes live
In the past four months, DeFi has been in full swing, sweeping with overwhelming momentum.
The increasingly popular DeFi has also attracted many CeFi to enter the market one after another, and the dark horse exchange FTX in 2019 is no exception.
On July 27 this year, FTX announced a partnership with the DeFi project Serum, with FTX founder Sam Bankman-Fried serving as a consultant to Serum. On August 30, Serum DEX, the first decentralized exchange on Serum, was officially launched.
It is worth mentioning that, whether it is FTX, Binance, or OKEx, the first thing to cut into after entering DeFi is the DEX track. The fundamental reason is that the development potential of DEX is gradually highlighted, which is impacting the core position of CEX.
From the perspective of specific application examples, on August 30 this year, the 24-hour trading volume of the decentralized exchange Uniswap reached 426 million US dollars, surpassing the centralized exchange Coinbase for the first time.
(DEX monthly trading volume, picture from Dune Analytics)
From the perspective of specific application examples, on August 30 this year, the 24-hour trading volume of the decentralized exchange Uniswap reached 426 million US dollars, surpassing the centralized exchange Coinbase for the first time.
In the face of a series of data pressures, CEXs such as FTX also have to pay attention to the development of DEX.
"With the rapid development of DeFi, we believe that DEX will have a better chance to unleash its potential in the future, and DeFi will have a better chance to change the way traditional finance works in the long run." said Adam, FTX Technical Director.
Of course, entering DEX does not mean that you can do well.
The entire DEX track is currently flooded with hundreds of platforms, especially the pioneer Uniswap has already occupied a certain market share, how does the latecomer Serum DEX break through?
Odaily summarized the unique advantages of Serum DEX, as follows:
One is strong technical performance and fast processing speed. According to SBF, the processing capacity of Serum DEX based on Solana is 10,000 times that of Ethereum, and the handling fee is 1 million times cheaper, which can effectively solve the transaction congestion problem of Ethereum (the third part explains the technical advantages in detail).
The second is that a complete order book can be built, which is consistent with the centralized exchange. At present, the AMM (Automatic Market Maker) model led by Uniswap has problems such as large slippage and poor operating experience. Serum DEX can provide users with a centralized operating experience, reduce learning costs, and through the high-frequency market maker Jump Trading Provide strong liquidity.
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(Serum DEX trading page)
The third is to provide risk margin. In a decentralized world that advocates "Code is Law" (code is law), security issues still occur frequently, and no platform dares to promise that its system will have zero failures and will not be stolen. While Serum DEX is doing a good job of protecting its own security system, it will also prepare sufficient risk margins to compensate for user losses in extreme situations, which is no different from centralized exchanges.
All in all, Serum DEX draws on the strengths of centralized trading, the interface is close to the current mainstream exchange interface, the user experience is similar to that of centralized exchanges, and it is easier to accept; while retaining the characteristics of DEX, users are all peer-to-peer from order placement to settlement Decentralized transactions, assets are in their own hands.
Because of this, Serum DEX has also been sought after by the market after its launch.
On September 22, the daily trading volume of Serum DEX exceeded 10 million US dollars. This is based on natural growth, rather than liquidity mining as incentives in various Swap models, so the data is more long-term reference.
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From points to planes, Serum ecology
A single tree is hard to support, and a single business may become a trump card, but it cannot support the company to go further.
In addition to its own core business, BAT is also constantly exploring new directions and striving to form ecological synergy.
The same principle applies to the encryption market. The three major exchanges, whether in the field of CeFi or DeFi, are not a single product business, but multiple businesses go hand in hand and work together.
If Serum wants to gain more market share in the fierce market competition, it must enhance the ecological value of the entire Serum and establish a more complete ecological system.
Both SBF and FTX are aware of this.
In a recent tweet, SBF announced the first part of Serum's roadmap, which focuses on multiple dimensions such as "DEX, lending, AMM, and liquidity" to improve Serum's ecological layout.
However, to improve the ecological project is not achieved overnight, nor can a single organization achieve it. Take Ethereum as an example. Today there are tens of thousands of projects, not only thanks to the Ethereum Foundation, but also inseparable from the efforts of hundreds of thousands of community developers. Therefore, the power of community cannot be ignored.
"The in-depth cooperation between FTX and Serum hopes to use our past experience to reform the traditional financial infrastructure with the community in a decentralized form. Of course, this process cannot be accomplished overnight, and requires the gradual efforts and advancement of the community and developers. , and gradually build the entire Serum ecology to form a positive cycle. The more stable the DeFi infrastructure, the faster the work of Serum will progress, and the more users will gather together to further promote the prosperity and development of this system. "Serum Also realized the importance of community power in development and took action.
On September 18th, Serum released an ecological project recruitment plan, inviting various projects to jointly develop the Serum ecology. According to the official announcement, the cooperation projects that Serum Ecology is looking for include the following:
Liquidity mining projects;
Cross-chain bridge and cross-chain lending;
Serum-based oracles;
Serum-based request for quote system (RFQ);
Decentralized packaging (Wrapper);
synthetic assets;
Zero-knowledge clearing engine;
Native Metamask integration
……
Adam told Odaily that the Serum ecosystem starts with DEX, and oracles, lending, cross-chain bridges, AMMs (automated market makers), and liquidity providers (Liquidity) will be the foundation of the entire ecosystem.
Why are these foundational items so important?
First of all, the importance of oracles to DeFi is unquestionable. Without oracles, on-chain transactions cannot achieve accurate quotations; cross-chain bridges can introduce assets from other public chains into Serum, breaking the barriers to asset transactions on various public chains, and realizing full DeFi Circulation; lending provides a large amount of reserve assets for the entire DeFi, improving capital utilization; and AMM complements the current order book model of Serum DEX, providing liquidity support for all trading pairs.
Moreover, these projects are not completely separated from each other, but complement each other to form a linkage effect.
For example, liquidity mining uses AMM and lending services; DEX trading uses lending; AMM can be combined with cross-chain bridges to provide more liquidity mining options.
When the above-mentioned core underlying infrastructure is completed, other ecological parts will gradually develop, and Serum will also unlock more development directions. The entire ecological project will work together to achieve the effect of 1+1>2.
Only when the Serum ecology is truly enriched and there are ecological projects comparable to Ethereum, can Serum truly practice the rhetoric in the white paper: Serum is the antidote to DeFi.
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Why do developers choose Serum?
The Serum ecology is currently like a piece of rough jade, which urgently needs to be polished by project developers.
But for the project, what are the differentiated advantages of the Serum ecology that can attract developers? Odaily believes that there are two main points: one is dual financial support, and the other is underlying technical support.
(1) Dual funding
Serum ecology has a strong support for the project, dual funding, and provides generous financial support.
In the announcement on September 18, the official stated that new projects developed on Serum can submit applications online; after passing the review, the application project has the opportunity to obtain 1,000 to 20,000 SRMs (about 2,000 to 40,000 US dollars) U.S. dollars) as start-up funds, which are not locked; and some projects related to Solana will have the opportunity to receive an additional 25 SOL as start-up funds on the basis of every 100 SRM.
In addition, when the project is officially launched, another SRM fund can be obtained, with an amount ranging from 5,000 to 100,000 SRM (approximately US$10,000 to US$200,000). This fund is locked for 1 to 7 years and released year by year.
For specific funding support rules, you can click on the Serum official website to inquire: https://projectserum.com/blog/project-ideas.
It is worth noting that the level of financial support of Serum is basically the same as that of Ethereum.
According to The Block statistics, as of May this year, a total of more than 150 Ethereum projects have received more than 21 million US dollars from the Ethereum Foundation. Converted down, the average assistance for each project is 140,000 US dollars.
So, where do these support funds for Serum come from? According to Serum's official website, the assistance funds mainly come from the ecological node EcoSerum.
It is the incentive node of the Serum ecology, mainly composed of a group of investors, traders and developers who are optimistic about the Serum ecology for a long time and actively provide help. The main role of EcoSerum in Serum can be seen as an incubation factory, providing financial support for projects built on Serum.
In this first phase of project recruitment, EcoSerum provided financial support of 120,000 SRMs (approximately 240,000 US dollars); in the future, 2% of the total cost of Serum's ecological income will be transferred to EcoSerum to support the development of new projects. In addition, EcoSerum will also evaluate the project to determine the allocation of support funds.
(2) Technical support
If financial support is soft support, then the technical performance of the Serum ecology itself is hard core support.
Serum is built based on the Solana public chain, which also allows Serum to inherit the characteristics of high performance.
Specifically, Serum can support more than 50,000 transactions per second while maintaining a block time of 400 milliseconds, which can alleviate the current congestion of Ethereum; using the Turbine block propagation protocol, the platform can support thousands of nodes while maintaining Performance and scalability; and low transaction fees, the network transaction cost for 1 million transactions is estimated to be $10, which reduces the problem of high Gas fees on the Ethereum network.
The emergence of Serum effectively solves the current pain points of Ethereum DeFi, which is undoubtedly beneficial to developers.
It sounds like there is no big difference between Serum and TRON and other high-performance public chains. But Serum also has a very important technical advantage, which is the cross-chain function.
In the past two years, everyone would think that cross-chain is too advanced a topic. However, with the increase of public chain projects, this issue is more and more worthy of discussion. Especially with the popularity of DeFi this year, we have seen various public chains fighting on their own, like isolated islands. The migration of assets on the chain faces great difficulties, which seriously hinders the development of DeFi to a deeper level.
The cross-chain function integrated by Serum supports multi-asset transfer, thereby opening up the communication channels of various encrypted assets and realizing the interconnection of multiple DeFi protocols.
For example, a user who holds EOS wants to participate in the pledge mining of a certain project on Ethereum. At this time, the project has been mapped across the chain on Serum, and users can directly transfer to EOS from the project on Serum to easily participate in mining. If it is before, users can only sell EOS first, and then exchange ERC-20 USDT to participate, the process is cumbersome.
At present, Serum has opened up the cross-chain bridge between ERC20 and SPL. Users can directly enter the ERC20 contract address in the Sollet wallet (Solana digital wallet) to transfer money and conduct transactions on Serum. In the future, the cross-chain scope will continue to expand.
In general, Ethereum 2.0 has repeatedly skipped tickets and has not been released for a long time, but the DeFi dilemma has become more and more obvious, and the trend of Ethereum projects transferring to other public chains is inevitable. As a high-performance ecological project, Serum may be able to undertake the value overflow of Ethereum.
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How does Serum rise to the challenge?
However, Serum is not perfect and still faces serious challenges.
Whether it is the developer community or the user base, Serum's underlying chain, Solana, cannot compare with the current Ethereum ecosystem. How to expand users has become a difficult problem on the road of Serum's development.
Adam told Odaily that Serum mainly solves this problem in two ways.
One is to rely on the ecology and the developer community, which is also the initial motivation for implementing the recruitment plan. Serum is a complete ecology, and the entire ecological growth process is inseparable from the participation of the developer community, user community, high-quality projects, early investors and many other contributors.
"Ethereum took five years to go from 0 to 1. We hope to gather more technical talents in a shorter period of time to participate in Serum's ecological construction and provide long-term landing applications and ecological value, such as lending and cross-chain lending. , Serum oracles, volatility products, synthetic assets, etc. We have prepared the platform and are waiting for an excellent development team to join in building the Serum ecosystem.”
The second is to use the token economic model to reward. The platform currency (ecological token) SRM issued by Serum continues the economic model of FTX platform currency FTT. Each project can choose by itself, whether to adopt the charging profit model integrated into Serum, and share the ecological revenue share. Serum's nodes will also assist in the management of the project and help it achieve profitability.
Odaily has also reported that 90% of the 10 billion SRM tokens are locked in the first year; the locked SRM will be unlocked linearly from the second year to the seventh year, which is currently the longest unlocking period in the encryption market It's time.
Serum buys back and destroys all the net transaction fees of SRM, so that SRM remains in a deflationary state and supports the future value of SRM for a long time.
On September 25th, Serum completed the first repurchase and destruction of the platform currency SRM. This time, a total of 196,592 SRMs were destroyed, worth about 401,047 US dollars.
In addition, in the Serum ecosystem, SRM can be used to stake on nodes to maintain the normal operation of the ecosystem, and stake SRM to obtain node rewards.
“The Serum team has always focused on creating real value and building a healthy ecology. It is difficult for any token economic model without real cash flow to support it in the long run.” Adam said.
In the future, Odaily will continue to pay attention to how far the new batch of DEX and the new DeFi ecosystem can go.
