Produced | Odaily (ID: o-daily)

Produced | Odaily (ID: o-daily)

DeFi is not a new word or concept, but it will shine in 2020.

Leading projects not only achieve rapid growth in their own value by virtue of model and product innovation, but also continue to drive the industry scale to break new heights. More importantly, DeFi has brought a new direction and new ideals to the industry. From the underlying public chain to the protocol layer middleware to a variety of application fields, it is inspired by it and tells a more self-consistent story.

However, what are we talking about when we talk about DeFi?

Does DeFi specifically refer to decentralized products/services that are analogous to various subdivisions of traditional finance, or does it also cover decentralized currencies such as Bitcoin and supporting components such as Chainlink? Should the ceiling and baseline of DeFi be compared to traditional finance or should it be generalized to economic activities? In the current industry atmosphere dominated by "copying and splicing", how to get a glimpse of the next hot model or product direction in advance?

In order to clarify these issues, Odaily believes that what we first need is a set of definitions and classification rules that are more rigorous and more suitable for new DeFi species, and then present the top and characteristic projects in various fields of DeFi within this contextual framework to form a set of Finally, I hope that readers can establish a panoramic understanding of DeFi from this article, and have the opportunity to predict the future trend of the industry and participate in the joint construction of an open financial ecology.

This article "DeFi Taxonomy, Industry Map and Value Project" is part of the "2020 Open Finance Development Report". A full version of the report covering DeFi hotspot events, data review, cause analysis, limiting bottlenecks, evolution direction and future opportunities will be released on January 7th at "Value Era Summit Forum and 2020 FAT Awards Ceremonyfirst level title

secondary title

1. Taxonomy

DeFi distributed finance in a narrow sense can be divided into application layer and Layer2 protocol layer in terms of technical architecture. The difference between the two is that the Layer 2 protocol layer provides a set of open source solutions, and any application can be flexibly built based on it; while the application layer is more of a debugged, specific solution, product logic and many The parameters are relatively fixed and the flexibility is low.

DeFi distributed finance in a broad sense should also include supporting assets (such as centrally issued stablecoins USDT and wBTC, etc.) and infrastructure (such as oracle machines, on-chain search tools, etc.).

The classification method in this article adopts the industry’s common classification method by business type on the main line, such as DEX, lending, stable currency, etc. Among them, stablecoins include both decentralized encrypted asset-backed stablecoins (such as DAI) and centralized legal currency-backed stablecoins (such as USDT), and are not limited to the narrow and broad senses mentioned above.

secondary title

2. Principles

There are no less than a thousand DeFi projects. Due to energy and space constraints, we will not list them one by one, but only hope to cover their main representative products and projects with shining points. Therefore, we also have three principles when screening products.

• The Ethereum ecosystem is the main one. Ethereum is the birthplace and representative market of many classic DeFi, and has been reproduced by many public chains. Therefore, this article mainly focuses on the DeFi of the Ethereum ecosystem.

• first level title

• Lean toward innovative features. Some of the projects mentioned in this article have not yet ranked among the top based on the amount of locked positions, but they are unique in terms of product positioning, model, and efficiency. We believe that such projects have more potential and imply the development direction of the industry, so they are also included in the map.

secondary title

〇 Brief description

text

1. Transaction

• to pay

• Derivatives trading

• Insurance

• prediction market

• to pay

• text

synthetic assets

• borrow money

• synthetic assets

• Stable currency (encrypted asset collateral + fiat currency collateral)

• asset Management

• NFT

• asset Management

• text

wallet

• Oracle

• wallet

• Data retrieval and display tools

• governance

• governance

• Identity and KYC tools

We have integrated the key projects in each subdivision by category in the following figure:

secondary title

text

1. DEX (18)

There are roughly three types of DEX classifications:

• According to the location of the network, it is divided into application layer and protocol layer. In fact, most DEXs are based on open source protocols. However, since some open source protocols do not build their own exchanges (such as the 0X protocol), there are not many exchanges based on them, so they are classified as a protocol layer.

• According to different transaction modes, DEX can be divided into three types: Based on the Orderbook order book mode, custody and transaction matching are completed off-chain, so as to solve the problems of slow transaction speed, lack of depth, and large slippage on the chain; Based on the AMM automatic market maker model, it supports real-time human-machine transactions. Anyone can be a market maker, which greatly increases the depth of transactions and solves the disadvantages of on-chain transactions; a mixture of the two.

• DEX can also be divided into direct transactions or aggregated transactions. Direct trading means that users directly operate in the above-mentioned DEX. Aggregated transactions are carried out through aggregators. With the increase of DEX, the liquidity is dispersed to various agreements or capital pools, resulting in an increase in the overall transaction cost of users. The aggregator can select the best trading place for users through simple calculations, thereby significantly optimizing transaction costs and improving experience.

This part comprehensively considers the above classification methods, and divides DEX into three categories: application layer, protocol layer and transaction aggregator.

(1) Application layer (12)

• Uniswap（https://uniswap.exchange, Token: UNI)

Uniswap is the platform with the most listed tokens, the most users, and the largest trading volume (market share) among DEXs.

In essence, Uniswap is a decentralized trading protocol based on automatic market maker algorithms and exchange pools.

Uniswap V2 is an upgraded version of Uniswap V1. In the previous version, Uniswap V1 only allowed users to create an exchange pool for ERC-20 Token to ETH. This has been improved in Uniswap V2. Users can add any tokens in Uniswap V2. exchange pool. For example, now users can directly create a USDC/DAI exchange pool.

In addition, in this upgrade, the lightning trading function has been added for users to arbitrage, and the authority to set the management fee has been reserved at the protocol level, which means that in addition to the 0.3% fee for market makers, the platform will also In addition, there is a certain commission fee.

• SushiSwap（https://sushiswapclassic.org/, Token: SUSHI)

SushiSwap is a decentralized trading protocol forked from Uniswap, which issues platform currency SUSHI to reward liquidity providers.

SUSHI is its governance token.

SushiSwap transaction fee 0.3%: 0.25% of which is directly distributed to active liquidity providers; the remaining 0.05% is bought into SUSHI and distributed to Sushi mortgage users (xSUSHI token holders).

10% of each SUSHI distribution is reserved for future development iterations and security audits of the project.

• Curve（https://www.curve.fi/, Token CRV)

Curve is a low-slippage and low-fee exchange pool protocol based on an automatic market maker and designed specifically for the exchange of stablecoins and stable assets.

Currently, the Curve exchange pool already supports the exchange between DAI, USDC, USDT, BUSD, TUSD and sUSD. Because Curve's exchange algorithm is specially optimized for stable currency price stability, the slippage is very low, and many stable currency trading pairs are much more cost-effective to trade in Curve than to go to CEX.

When you conduct stablecoin transactions in Curve, the platform will deduct 0.04% as a handling fee, and divide the handling fee equally among the market makers who provide liquidity in the exchange pool. And if you are a stablecoin holder, you can consider storing your stablecoins in Curve to participate in market making, and earn handling fees for stablecoin financial management.

At the same time, Curve also integrated Compound's cToken and yearn's yToken. That is to say, depositors of Compound and Yearn can earn loan interest on their respective platforms while depositing in Curve's exchange pool to earn transaction fees.

Curve has issued CRV tokens to incentivize liquidity providers and community governance.

• Balancer（https://balancer.finance/, Token: BAL)

Balancer is an automatic market-making protocol similar to Uniswap. Compared with the completely decentralized Uniswap, it has many differences.

The first is that the same liquidity pool can support up to 8 currencies, and Uniswap can only support two.

Secondly, the weight can be set for each currency, so that there is no need to ensure that the dollar value of each currency in the pool is equal like Uniswap, which is convenient for market makers. But it also leads to a difference in the rate of change of the price in the two directions of buying and selling.

Finally, unlike the fully decentralized Uniswap, the creator of the Balancer liquidity pool has the authority to modify the transaction fee (0.0001%-10%), but in terms of income, all liquidity providers are the same.

Balancer has released its BAL token and governance scheme to incentivize liquidity providers and ecosystem contributors.

• Kyber Network（www.kyber.network, Token: KNC)

Kyber is an on-chain liquidity aggregation protocol that provides safe and convenient instant exchange services. These liquidity sources aggregated by Kyber are called reserve pools, and each reserve pool is independently managed by its own reserve manager, and its transaction exchange rate settings are also completely independent. When a user initiates a transaction, Kyber will find the best exchange path to provide users with a better exchange rate.

The sources of liquidity in the reserve pool include Kyber official reserves, market makers, exchange pools, etc. Liquidity providers profit from the spread between the benchmark interest rate (determined by Kyber Network) and the interest rate paid by users. Kyber's limit order transactions are carried out through offline matching.

According to Binance data, Kyber is also the most integrated (more than 100 DApps) and most used DeFi protocol in 2019.

Kyber currently supports the currency exchange of more than 70 Ethereum-based tokens, including ETH, KNC, DAI, ZRX, etc. At the same time, the governance token KNC was officially issued. KNC holders can participate in Kyber's on-chain governance by staking KNC to vote on important proposals and parameters, and at the same time earn benefits.

• Tokenlon（http://tokenlon.im, token: LON)

Tokenlon was originally the built-in decentralized exchange of the imToken wallet. Based on the 0x protocol, it has been upgraded to an independent exchange. Users can use it directly in the imToken wallet.

Different from Uniswap and Kyber, Tokenlon adopts the "what you see is what you get" trading model, and the price is updated every second according to the real-time quotation of the market maker. When you click "trade now", the price is locked, and the price you see is your The price of the final transaction.

When the user selects a trading pair, the Tokenlon interface will also provide quotations from other mainstream centralized exchanges (Binance, Huobi) and decentralized exchanges (Kyber, Uniswap) as price references to help users accurately grasp the trading pair. Judge market conditions.

Tokenlon has issued the platform token LON token.

• Swerve（https://swerve.fi/, Token: SWRV)

Swerve, a stablecoin exchange protocol forked from Curve, offers a new token issuance program.

You can deposit stablecoins to Swerve to become an automatic market maker and get swUSD as a certificate of deposit. You can mortgage swUSD to Swerve DAO to earn SWRV governance tokens.

Swerve will initially launch only one DAI-USDC-USDT-TUSD pool, and then decide whether to add other liquidity pools based on DAO governance.

• Mooniswap（https://mooniswap.exchange/，1INCH）

Mooniswap Mooniswap, released by the 1inch team and forked from Uniswap, is a decentralized trading protocol based on an automatic market maker and supports virtual balance functions.

It focuses on better distribution of returns to liquidity providers, exploiting user slippage and protecting traders from front-running attacks. The virtual balance is used to enable liquidity providers to obtain profits originally obtained by arbitrageurs.

The 1inch team has issued the common token 1INCH for each protocol.

• CoFix（https://cofix.io/, Token: COFI)

CoFiX is an innovative AMM protocol that uses a computable financial transaction model to eliminate the corresponding automatic market maker risk.

It uses the price source of the Nest oracle machine as an off-chain market input price to eliminate system-level arbitrage opportunities and impermanent losses.

CoFiX will take into account the deviation and delay of the oracle price and calculate a corrected output quotation to compensate the market maker.

COFI is the native token representing its governance and dividend rights. The CoFiX protocol will distribute 90% of the total amount of COFI to users through liquidity mining and transaction mining (USDT-ETH , HBTC-ETH) at the same time.

20% of the transaction fee will be deposited into the dividend fund pool and distributed to COFI holders, and the other 80% will be decided by COFI holders whether to repurchase or destroy after the governance function is launched.

• DODO（https://dodoex.io/, Token: DODO)

DODO is a new generation of on-chain liquidity solutions, using the active market maker algorithm (PMM) to provide pure on-chain, contract-combinable liquidity.

PMM obtains the accurate price of an asset in the current market through ChainLink oracle input. Different from Uniswap, DODO uses its PMM algorithm to gather a large amount of market-making funds around the middle price of the market, and dynamically maintains a relatively flat price curve to provide sufficient liquidity for the market and raise higher funds for market makers utilization rate.

For the currently supported ETH/USDC trading pair, when users buy ETH, PMM will slightly increase the price to attract arbitrageurs to sell ETH, so as to maintain the balance of ETH and USDC in the liquidity pool.

Therefore, there is no minimum deposit limit for market makers, and market makers can deposit any amount of ETH or USDC to bear unilateral risk exposure and avoid impermanent losses.

• Bancor Network（https://bancor.network/, token: BNT)

Bancor V2 is an on-chain liquidity protocol for building AMM-based decentralized exchanges.

Similar to Uniswap, on the Bancor platform, users can add liquidity to the exchange pool and trade in the exchange pool. But the difference is that Bancor issued BNT as the connection token of each exchange pool, while ETH was used in Uniswap V1. Through the connection of BNT, all tokens in the exchange pool can be traded "directly".

Recently, community developers developed Katana Pools based on the Bancor protocol. Through this platform, users can create an exchange pool that supports any number of tokens in any proportion, and can flexibly set the transaction fee of the exchange pool.

Bancor V2 uses ChainLink oracles to feed prices, providing liquidity providers with a single token risk exposure, using optimized pricing curves to reduce slippage and improve capital utilization efficiency, while using dynamic weights and fees to prevent value loss and reduce impermanence loss.

Bancor has issued the governance token BNT.

• Anyswap（https://anyswap.exchange/，ANY）

AnySwap is a decentralized cross-chain transaction protocol. It uses Fusion's DCRM technology as a cross-chain solution. Currently supported chains include Ethereum, Fusion, BSC, and Fantom.

ANY is its governance token.

(2) Protocol layer (3)

• 0x（https://0x.org/, token: ZRX)

0x is one of the earliest decentralized exchange open source protocols on Ethereum.

0x introduces the concept of Relayer (repeater), allowing market makers and other dApps to act as relayers to match transactions in the off-chain state channel and settle on the chain, effectively reducing costs and improving efficiency. Less decentralized than other solutions.

But there is no doubt that 0x, an open source protocol, has effectively realized its own vision, which is to reduce the difficulty of operating a cryptocurrency exchange and allow anyone to open and operate a decentralized exchange.

according to

according to0xTrackerAccording to statistics, the transaction volume based on the 0x protocol has reached 70 million US dollars in the past 24H (second only to Uniswap), and the number of transactions (unique addresses) is close to 6,000.

In 2017, 0x issued its protocol token ZRX.

• Loopring（https://loopring.org/#/，LRC）

Loopring (Loopring Protocol) is an earlier decentralized transaction protocol. Similar to 0x, it adopts the off-chain order book mode for transactions. The difference between Loopring and other DEX protocols is that it uses ZK Rollup (one of the two alternative Layer 2 scalability solutions for Ethereum) to build high-performance transactions, so as to achieve higher security without sacrificing security. High transaction throughput and lower settlement costs.

According to the official introduction of Loopring, the throughput of the 0x protocol is about 3 transactions per second. Loopring protocol 3.0 can clear up to 2025 transactions per second. After the data availability on the chain is turned off, the throughput can reach 16400 transactions per second, and the settlement cost is as low as RMB 0.001 per transaction.

As of now, the Loopring protocol has been upgraded to version 3.5, and the first exchange based on it, Loopring.io, has been released.

Loopring has issued the protocol token LRC.

• Gnosis（https://gnosis.io/，GNO）

Gnosis is a decentralized exchange protocol that uses a ring exchange mechanism to match illiquid long-tail tokens on Ethereum.

Mesa is the first decentralized exchange built on the Gnosis protocol. DXdao uses the Gnosis protocol to build a decentralized prediction market called Omen.

GNO is the native token of the Gnosis protocol.

(3) Transaction aggregators (3)

• 1inch（https://1inch.exchange, token: 1INCH)

1inch was born in mid-2019, focusing on decentralized aggregation transactions. It launched the AMM-based Mooniswap in August, and launched the 1inch V2 version in November.

In the past six months, 1inch has made frequent moves, and its market share has also increased. According to DeBank data, this year, 1inch’s transaction volume has skyrocketed from US$320,000 to US$119 million, an increase of 370 times.

Compared with the V1 version, according to the official blog, the main highlight of 1inch V2 is the addition of the Pathfinder component, which is an API that includes discovery and routing algorithms. Through this component, the response time of 1inch V2's quotation comparison has been shortened from 6 seconds to 0.4 seconds; the page loading time has been reduced from 5 seconds to 1 second; and the API quotation response time has been shortened from 5 seconds to 0.4 seconds.

Overall, this component ensures the best possible exchange rates for 1inch swap transactions while significantly reducing transaction response times. Another feature of Pathfinder is that it provides two transaction preference options of "maximum reward" and "lowest gas fee".

, unissued currency)

· Matcha（https://matcha.xyz/, unissued currency)

Matcha is an on-chain aggregation exchange based on the 0x protocol.

As a trade aggregator, Matcha will find you the best quotes from various liquidity sources such as 0x, Kyber, Uniswap, Oasis, Curve, etc.

, unissued currency)

• ParaSwap（https://paraswap.io/, unissued currency)

ParaSwap is an on-chain aggregation exchange that aggregates liquidity among mainstream DEXs. Based on the self-built ParaSwapPool exchange pool, it aggregates the liquidity of Kyber, Bancor, Uniswap2, Oasis, Curve, 0x and other protocols.

When trading on ParaSwap, it will automatically calculate how to split a transaction to ensure the lowest slippage, and complete all small orders split by users in one transaction.

At present, ParaSwap does not charge any additional fees, and provides professional traders and dApps with plug-and-play APIs, SDKs, and a set of smart contracts for fast integration and arbitrage off-chain and on-chain.

text

2. Derivatives trading (5)

*This part is co-produced by DDX Chinese Community, Distribution Consensus Lab, Wuya Community, and Odaily (in no particular order).

No centralized exchange operator, lower fees in the long run;

1. No centralized exchange operator, lower fees in the long run;

2. Permission-free access makes it censorship-resistant, no one can shut down, control and change the transaction agreement;

3. No withdrawal limits or transaction size restrictions.

4. There is no license for trading varieties, and any asset with a public price feed can be traded;

5. No withdrawal limits or transaction size restrictions.

At this stage, the field of derivatives mainly includes three vertical categories: synthetic assets, leveraged and perpetual, and options. Since we mainly focus on the trading ecology in this part, we mainly explain the two parts of leverage, perpetual and options, and synthetic assets are classified into the next part "assets and their management".

Overall, derivatives are still dominated by synthetic assets. From the data, the overall lock-up value of derivatives in the third quarter increased by 160% compared with the second quarter, reaching 293 million US dollars, and the proportion of the total lock-up value of DeFi dropped from 15% at the beginning of the quarter to 7% at the end of the quarter. The popularity ebbed in late September The trend is more obvious than lending and DEX.

, unissued currency)

• dYdX （https://dydx.exchange/, unissued currency)

dYdX is a decentralized trading platform led by a16z and Polychain, which supports lending, spot, leveraged and perpetual contract transactions. Currently, dYdX supports the following main functions: trading: spot trading, up to 5 times leverage trading, and up to 10 times perpetual contract trading; lending: supports ETH, DAI and USDC, with an initial pledge rate of 125%, and also supports the flash loan function.

dYdX can be described as one of the earliest decentralized leveraged trading platforms in the DeFi field. Its lending business and perpetual contract trading volume have grown significantly this year.

For leveraged trading, dYdX adopts the order book mode for matching. For perpetual contract trading, the price index is taken from the price index of each centralized exchange.

In 2021, dYdX plans to improve the scalability of the trading platform and reduce transaction costs based on Ethereum Layer 2. At the same time, how dYdX will conduct decentralized governance will also be an event worth looking forward to.

• DerivaDEX （https://derivadex.com/, Token DDX)

DerivaDEX is a decentralized contract trading protocol invested by Polychain Capital, Dragonfly Capital, Coinbase Ventures and other funds. The founder is a former DRW senior trader, and its consultants include well-known programmer Phil Dalian and blockchain consulting agency Gauntlet.

DerivaDEX uses a trusted execution environment to resist single points of failure and censorship issues;

1. DerivaDEX uses a trusted execution environment to resist single points of failure and censorship issues;

2. DerivaDEX adopts an open order book and on-chain settlement components to provide a high-performance and efficient experience;

3. The liquidity mining model used by DerivaDEX can motivate people to participate in the governance and operation of DerivaDEX.

Currently, the insurance mining launched on DerivaDEX encourages users to use pledge funds for insurance funds, so that the ever-growing insurance funds can provide users with risk protection. The trading protocol is scheduled to go live in the first quarter of 2021.

DerivaDEX has issued the governance token DDX.

• Injective （https://injectiveprotocol.com/, token INJ)

Injective was incubated by Binance Labs, and the founders have backgrounds in traditional finance and blockchain.

The Injective protocol is mainly composed of three parts: the Injective chain, the Injective derivatives protocol, and the Injective DEX.

The Injective chain is built based on Cosmos, and plans to achieve high TPS and low gas fees. It uses the Verifiable Delay Function (VDF) to eliminate transaction cheating and bad transaction behaviors such as front-running transactions.

At present, 11 perpetual contract trading pairs have been launched on the Injective test network, and 1 delivery contract will be launched soon. There are more types of products in the current decentralized derivatives trading platform.

The Injective Derivatives Protocol is a completely decentralized peer-to-peer derivatives protocol that supports perpetual swaps, contracts for difference (CFD), etc., on which users can freely create and trade any derivatives market.

Injective DEX is developed based on the Injective chain and uses the order book model to match transactions. Nodes maintain a decentralized order book and get 40% of the transaction fee. Users can place and cancel orders for free. Injective's spot trading is based on the 0x protocol.

Injective adds a market maker to the traditional derivatives trading model. The market maker deposits a margin into the smart contract and maintains a certain pledge rate, and buyers can buy and sell contracts with the market maker. The price of the contract is obtained from other exchanges that have listed the token through the oracle machine, and is weighted and averaged according to the trading volume.

Injective has issued the platform token INJ.

, unissued currency)

• Opyn (https://opyn.co/#/, unissued currency)

Opyn is invested by funds such as Dragonfly.

Opyn is built on the Universal Options ProtocolConvexity ProtocolThe on-chain options platform based on the order book model on the platform is positioned to provide insurance services for users through option transactions.

The "convexity protocol" has a large degree of extensibility - allowing developers to create options with various parameters, such as European and American options, call or put options, underlying assets, collateral types, etc.

Currently, Opyn mainly provides protective put options for ETH and insurance for Compound storage assets USDC and DAI.

Opyn recently launched a new v2 version, its features include:

① The option is automatically exercised when it expires;

② Support cash-settled European options;

③Support the use of income-generating assets (such as cToken, aToken, yToken, etc.) as collateral and earn income;

④ When a user purchases an option product on Opyn, the user actually obtains an oToken representing the option product, and can trade this tokenized option product on Uniswap.

Opyn's product design is relatively stable, but the problem it is currently facing is that the Orderbook form has a relatively large disadvantage for liquidity cold start. In 2021, we can pay attention to how Opyn solves the liquidity problem and whether there are further decentralized governance designs.

• Hegic （https://www.hegic.co/, Token Hegic)

Hegic is a very characteristic product in the field of DeFi options. In April 2020, the V1 version of the agreement was launched; on September 9, 2020, HEGIC tokens were issued through the bonding curve contract, and in October 2020, the v888 version of the main network was launched.

Hegic's team remains anonymous, with the main founder using the pseudonym Molly Wintermute.

Based on the AMM model rather than the Orderbook model, Hegic currently supports American options, allowing users to exercise options at any time within the time limit.

Hegic is more flexible than similar products. Users can design 1-day, 7-day, 14-day, 21-day, 28-day expiration time and arbitrary exercise price. When a user buys an option, the total cost required is to pay the option premium (premium) and a fixed 1% settlement fee (settlement fee).

Hegic uses a special simplified version of the option pricing model, and its implied volatility (IV) needs to be manually updated by the developer (Molly) based on the information on skew.com.

In addition, Hegic has designed a liquidity pool. Liquidity providers provide liquidity through pledged assets. When users buy options, they use the liquidity pool as the option seller. When exercising the contract, the liquidity pool pays the buyer , when the contract is not exercised, the option fee (premium) will be evenly distributed to the liquidity pool. The liquidity pool also ensures that contracts can be exercised.

Hegic's liquidity pool is a two-way pool, and the settlement of put options and call options is completed in the same pool. If the put option loses money, the call option will make a profit. This two-way nature disperses and reduces the option risk brought about by market fluctuations to a certain extent.

On December 7, 2020, the long-short ratio in the WBTC pool was 3.56, and the long-short ratio in the ETH pool even reached 6.4. In this case, if the market rises unilaterally, LP will suffer higher losses. At present, Hegic makes up for it through mining incentives.

text

, token: NXM)

• Nexus Mutual（https://nexusmutual.io/, token: NXM)

Nexus Mutual is the pioneer of DeFi insurance. It is a mutual insurance solution. Mutual members jointly contribute and share risks. Its first product is "smart contract insurance".

You can reduce the loss of assets caused by code defects or hacker attacks on smart contracts on Ethereum by purchasing insurance.

, unissued currency)

• Opyn（https://opyn.co/, unissued currency)

Opyn has introduced in the section on options, which can help users protect DeFi assets from risks through a set of options agreements. The current insurance objects include ETH, cDAI and cUSDC in Compound.

For depositors of Compound, after depositing assets to obtain cTokens, they can purchase oTokens to pay insurance premiums. Afterwards, no matter whether Compound is liquidated or hacked, they can redeem their own assets with the oTokens and cTokens in their hands.

, Token: COVER)

• COVER（https://coverprotocol.com/, Token: COVER)

The COVER protocol is a peer-to-peer insurance marketplace. The agreement consists of three major elements: Market Maker (MM), Insurance Provider (CP) and Insurance Demander (CS).

It also includes four tokens: DAI represents deposits that need to be collateralized by market makers, CLAIM represents insurance claim rights, NOCLAIM represents insurance demand rights, and COVER represents rewards and governance tokens.

Then it also has three fund pools: CLAIM-DAI pool, NOCLAIM-DAI pool, Cover-ETH pool.

COVER hopes to tokenize the rights and obligations of insurance, and realize the function of insurance through arbitrage when market participants play freely.

, Token: Nsure)

• Nsure（https://nsure.network/, Token: Nsure)

Nsure Network is an open insurance platform, a decentralized "Lloyd's", providing a trading platform for people who want to transfer risks and capital willing to take risks.

Compared with traditional insurance, insurance companies will provide a quotation, and consumers can choose to buy or not. Nsure's premiums are determined by a dynamic pricing model.

The dynamic pricing model takes capital demand (total insurance purchasing power) and capital supply (total number of pledged Nsure tokens) as parameters to jointly determine the final premium in the model. Premiums go down when supply increases and premiums go up when demand increases.

The insurer's income comes from three aspects. The first is that if the project does not report damage, the insurer’s profit is the 50% of the premium. If the project has a loss, the pledged tokens equivalent to 50% of the claim amount will be destroyed. Secondly, the insurer can obtain voting rights in the claims process by staking tokens, and participating in this process will also have corresponding benefits. Finally, as the holder of Nsure tokens, the insurer also enjoys the co-governance rights in DAO, distributes the newly generated tokens, and enjoys the profit of token appreciation.

, Token: UNN)

• UNION（https://unn.finance/, Token: UNN)

UNION is a full-stack insurance protocol that reduces DeFi risks and costs.

According to reports, through its multi-token model technology platform, it combines bundled protection and a liquid secondary market. DeFi participants manage their multi-layered risk across smart contracts and protocols in one scalable system. UNION lowers the barriers to entry for individual users and lays a solid foundation for the entry of institutional investors.

text

4. Prediction market (4)

• Augur（https://augur.net/，REP）

Among all decentralized prediction platforms, Augur has earlier development time, higher code quality, and faster market progress. V God also served as a project consultant for Augur.

Augur's forecasting process is mainly divided into four steps: creating a market, trading, reporting and settlement.

The success of this decentralized prediction market is inseparable from the fairness and security brought by the blockchain, and it is inseparable from the incentives of its platform currency REP.

, unissued currency)

• Catnip（https://catnip.exchange, unissued currency)

As a project in the Augur ecology of the decentralized prediction market, Catnip mainly focuses on the transaction layer and provides Augur with a prediction market trading platform with an order book and an AMM mechanism.

From a practical point of view, Catnip Exchange uses Foundry.finance to tokenize the share of the prediction results, and then puts these tokens into the Balancer AMM fund pool, allowing users to trade through the fund pool. By combining two established platforms, Catnip provides better mobility and experience.

According to the official introduction, compared with Augur, the transaction fee of Catnip Exchange is several times cheaper, only about 50% of the transaction fee of Balancer's native user interface. Additionally, Catnip Exchange incurs no clearing fees.

The launch of Catnip means that the functional layering of decentralized prediction markets is feasible. Among them, Augur, as the result judgment layer, is responsible for the final judgment on the results of the predicted events, so that the result token holders who bet on different predicted results can settle the income according to the results of the due date event, while Catnip belongs to the transaction layer, responsible for Provide end users with an easy-to-use trading experience.

, Token: NMR)

• Numerai（https://numer.ai/, Token: NMR)

Numerai is a transactional data network for data scientists who are incentivized to build predictive models to improve hedge fund returns. Numerai will first encrypt its transaction data, and then share the encrypted data with data scientists, so that scientists cannot see the original trading strategy of the fund, so that scientists can model based on data and obtain more information in transactions more income. The higher the scientist's points, the more tokens he can get.

, Token: NMR)

• Erasure（https://erasure.world/, Token: NMR)

Erasure is an information transaction protocol built on Ethereum and IPFS. It originally originated from the Numerai project mentioned above. A hedge fund encrypted and crowdsourced transaction data to a network of data scientists, allowing them to compete to build machine learning models to make predictions for the fund.

Erasure released Erasure Bay, an information exchange marketplace built on top of the Erasure protocol. You can use Erasure Bay to seek any information.

This information trading market is completely peer-to-peer and decentralized. The buyer and seller must put in Dai as a deposit guarantee. When the seller provides false information, the buyer will have the right to pay another 1/10 of the amount to destroy the seller's entire deposit to punish the seller.

text

5. Payment (6)

• OmiseGO（https://omisego.co/, Token: OMG)

OmiseGO is a Layer 2 expansion solution on Ethereum. By using the PoS consensus mechanism on the side chain, the transaction volume per second is increased to thousands, while the transaction fee is reduced to one-third.

At the beginning of August, OmiseGO released the Ethereum expansion plan designed for the well-known forum Reddit point system, and then Tether announced the official issuance of USDT on OmiseGO.

OmiseGO released its token OGM in 2017, and its market value is approaching $400 million so far.

• Matic Network（https://matic.network, Token: MATIC)

Similar to OmiseGO, Matic Network uses DPoS side chain (Layer 2) and an adapted version of the expansion technology Plasma to provide a secure and scalable transaction experience.

In June 2020, the Matic Network mainnet was officially launched. The project's open-source foundation is providing developers with Matic wallets, payment APIs and SDKs, identity solutions, and other supporting solutions so that developers can design, implement, and migrate dApps built on foundational platforms such as Ethereum.

Due to the short block generation time, payment transactions on Matic Network can be confirmed in sub-seconds and can significantly reduce fees, providing dApp users with a smoother and frictionless payment experience.

MATIC is used for pledge mining, participates in the consensus formation of the side chain network, and is also used to pay mining rewards and other transaction/mining fees to PoS beneficiaries. Every time a transaction occurs, a small portion of transaction fees will be stored in the protocol to support projects in the Matic Network ecosystem and paid through the chain.

• xDai Chain（https://www.xdaichain.com, token: STAKE)

xDai Chain is an Ethereum-compatible sidechain jointly launched by the MakerDAO Foundation and POA Network. Its biggest use is to trade USD stablecoins at high speed (5 seconds to account) and at low cost.

The reason for the high efficiency is that the chain adopts the DPoS consensus mechanism; and the US dollar stablecoin it adopts is xDai, which is generated by 1:1 mapping with Ethereum. It can ensure that the user's behavior of using xDai on the side chain is real and effective.

There are two tokens on the xDai Chain, xDai and STAKE. As the main asset on the chain, xDai is used for transactions and can be used to pay low Gas fees, eliminating the need for users to exchange for new tokens. STAKE can be understood as a public chain token, mainly used for distributed bookkeeping and governance.

xDai Chain said that in the future, it will further expand to other stablecoins other than Dai and other main chains other than Ethereum, and STAKE will still exist as a public chain token.

• Raiden Network（https://raiden.network/, token: RDN)

Raiden Network (Raiden Network) is a side chain of Ethereum. In view of the current low transaction speed and poor scalability of Ethereum, Raiden Network proposes to carry out transmission and transactions outside the Ethereum blockchain to achieve low procedures. Fees, real-time transfer transactions and privacy protection issues.

• Celo（https://celo.org/, Token: CELO)

Founded in 2017, Celo is positioned to provide multi-faceted open financial solutions, including cash transfers, person-to-person loans, and international remittances.

The Celo platform also issued cUSD, a USD stablecoin.

• Request Network（https://request.network/, token: REQ)

Request Network is a payment and financial audit platform based on Ethereum and a private IPFS network. It is an interface connecting isolated financial systems, enabling users to request payments, from simple peer-to-peer payment requests to complete business invoices.

Businesses wishing to integrate with the Request network need to: connect to the REST API, run a web client, or run a web node.

text

6. Other trading markets (4)

• Keep3r（https://keep3r.network/, token: KP3R)

keep3r is a decentralized task crowdsourcing platform, similar to the blockchain version of Zhubajie.com (human resources trading market). Perhaps its most famous point is that it was personally designed by Andre Cronje (founder of yearn.finance), the DeFi "cargo king".

The operation of keep3r depends on the job (Job) and the guardian (Keeper).

Job refers to a smart contract where a client wishes to perform an operation. Jobs can be as simple as calling a transaction, or they can require extensive off-chain logic. Keepers are external people who perform work.

When the customer successfully publishes the job on keep3r, Keeper can claim and execute the contract, and get KP3R token rewards after completing the job.

The first Job contract released by Keep3r is the UniswapV2 Oracle. Its job task is to collect the sliding average price of Uniswap trading pairs.

The advantage of keep3r is that it can reduce the maintenance cost of the project party and promote the formation of the smart contract network operation and maintenance ecology.

• Ink Protocol（https://paywithink.com/, token: XNK)

Ink Protocol is a decentralized e-commerce marketplace for buying and selling second-hand goods online.

The platform provides the core functions of the e-commerce market, such as fund custody (similar to Alipay), third-party dispute resolution, and most importantly, a distributed credit system around sellers.

Ink believes that seller reputation is an important factor affecting online retail stores, so it hopes to strengthen the value of seller reputation through the non-tamperable and traceable features of blockchain, so that good sellers can be trusted more easily, and problematic sellers will be recorded and rejected by consumers.

• Origin（https://www.originprotocol.com/, Token: OGN)

The goal of Origin is to achieve true peer-to-peer commerce, where buyers and sellers can trade directly without intermediaries.

Currently, users can buy and sell goods and services on Origin's flagship store and its partner apps. Marketplace operators can also develop and create their own applications on Origin's open source platform.

• District0x（https://district0x.io/, token: DNT)

secondary title

text

1. Borrowing (7)

• Maker（https://makerdao.com/, token: MKR)

Maker is a collateralized US dollar stablecoin issuance agreement, which issued the US dollar stablecoin DAI.

Users only need to provide ETH, BAT or USDC as collateral to the Maker agreement to participate in the issuance of DAI. However, a certain stability fee needs to be paid, and the pricing of this part of the stability fee is determined by the MakerDAO governance vote.

Except for a part of the stability fee paid by users to pay DAI deposit interest, the rest will be used as platform revenue to repurchase MKR to motivate its holders.

MKR is the voting token of MakerDAO. Only users who hold MKR can participate in the governance voting of the Maker agreement. They can vote to decide some important parameters in the entire Maker agreement and whether to support new collateral and other issues.

Sometimes a drop in the price of collateral may lead to insufficient collateral for DAI issuers. For example, for DAI issued with ETH as collateral, when the collateral rate is lower than 150%, the platform will initiate a debt warehouse auction. Those who participate in the auction can quote the debt positions to be liquidated, and the one with the highest quotation within a period of time will get the debt positions. At this time, the platform will impose a liquidation penalty of 13%. However, under extreme market conditions, there may also be a shortfall, and the auction price cannot pay the debt. At this time, the Maker agreement will issue additional MKR and raise DAI through the auction to repay the debt.

Currently, the Maker protocol already supports ETH, BAT, USDC and WBTC as collateral.

• Compound（https://compound.finance, token COMP)

Compound is an algorithm-based mortgage lending protocol that provides users with current floating-rate deposits and lending services.

The interest rate of the token borrowed by the user on the platform is determined by the algorithm of the borrowing amount and deposit amount of the token on the platform. The platform will reserve 10% of the borrowing interest as platform income, and divide the remaining interest equally among the users. Token depositors.

Depositors will get the platform's cToken as a deposit certificate, and according to the difference of the deposited certificate, they can lend other assets corresponding to 50%-75% of the value of cToken on the platform and become a borrower.

The borrower needs to pay the borrowing interest (mentioned above) for the token he borrowed on the platform, and his deposit interest will not be affected. At this time, the user's real borrowing cost is equal to the borrowing interest he paid on the platform minus interest on its deposits. And once the borrower's collateral is insufficient, anyone can initiate the liquidation process.

Those who participate in the liquidation will receive a 5% discount on the collateral price provided by the system as an incentive throughout the process, so as to ensure that the debt positions of users on the Compound platform can be effectively liquidated.

Currently, the Compound platform already supports ERC-20 assets such as ETH, DAI, USDC, USDT, BAT, WBTC, REP, and ZRX. In the future, the platform will introduce more other assets, and the newly supported assets will be decided by the holders of Compound's governance token COMP.

• Aave:（https://aave.com，AAVE）

Aave is an open source decentralized lending protocol that provides deposit and lending services for users.

The deposit interest rate and loan interest rate of both borrowers and lenders are calculated by algorithms based on the amount of borrowing and deposits on the platform, and the platform uses Chainlink's oracle machine to ensure the fairness of collateral prices.

When the user deposits, he will get aToken linked to the asset value 1:1 as a proof of deposit. Interest starts accruing immediately upon deposit and is indicated by a steady increase in the number of tokens held by the depositor. Deposit users can also lend 25%-100% of other assets on the platform according to different aTokens.

Borrowers need to pay the loan interest (fixed rate and floating rate) of the corresponding assets on the platform, and users can adjust the payment method of interest in real time according to market changes to minimize borrowing costs. When the collateral is insufficient, the platform will help the user to liquidate. Depending on the collateral, the liquidation penalty ratio will also be different, such as 5% for ETH and 15% for WBTC.

In particular, Aave also provides flash loan services for high-level DeFi players. Borrowers can use the contract to carry out unsecured loans. As long as the contract can guarantee that the loan and repayment can be completed within one transaction, the loan can be made without collateral.

Currently, the Aave platform supports LINK, DAI, ETH, USDC, BAT, USDT and other ERC-20 tokens commonly used in the DeFi field.

, unissued currency)

• Dharma（https://www.dharma.io, unissued currency)

Dharma is a P2P (peer-to-peer) lending marketplace that enables users to easily lend and borrow cryptocurrencies from anywhere in the world, instantly and with low barriers to entry, while maintaining full control over their funds.

Compound has a summary contract address where all funds are stored, but Dharma will provide each user with a personal contract address to interact with the protocol, which guarantees the security of funds to a certain extent.

• bzx（www.bzx.network，BZRX）

bZx is a decentralized DeFi protocol for building lending and margin transactions. In the latest version, it supports new functions such as flash loan, liquidity mining, mortgage management, Gas token integration, order recording and liquidation engine.

bZx has issued BZRX as its governance token. BZRX is used by relay parties to collect transaction fees, and token holders have the right to decide how to upgrade the bZx protocol.

• dForce (https://dforce.network/, token DF)

dForce is a set of open, unified, scalable, and interoperable DeFi protocol networks, including asset protocols, lending protocols, and liquidity protocols. Its business segments are not limited to lending, but rather diverse.

Take the currently launched asset business as an example: USDx is a synthetic USD stablecoin on the chain, and its components include USDC, PAX and TUSD. Users deposit USDx into USR to obtain systematic deposit interest; GOLDx is anchored by physical gold Token; dToken is the proof of income rights obtained by users depositing ERC20 tokens in the interest-earning market.

On December 19, 2020, dForce announced the deployment of dForce Trade, the first cross-chain transaction aggregator on Binance Smart Chain BSC. In addition, dFoce also plans to open a hybrid lending platform to specific users and specific assets, and launch an open lending protocol for a wider range of users.

• ForTube (https://for.tube/home, platform governance token FOR)

ForTube provides decentralized lending services based on The Force Protocol. Its products include ForTube Bank and ForTube Bond. The former is an algorithm-driven encrypted digital bank, and the latter is a one-stop encrypted digital bond issuance and investment platform.

text

2. Synthetic assets (6)

Synthetic assets on Ethereum represent financial instruments that are composed of one or more assets/derivatives. In other words, they are not initial assets, but synthetic ones. For example, DAI and wBTC are synthetic assets, but we know that stablecoins and cryptocurrency-anchored coins themselves are one of the two most valuable areas in DeFi, so they will List them below.

The synthetic asset projects introduced in this section are mainly synthetic asset issuance agreements.

• Synthetix（https://www.synthetix.io/, token SNX)

Founded by Kain in Australia, Synthetix is ​​a decentralized synthetic asset issuance protocol built on Ethereum. Before founding Synthetix, Kain founded the stable currency project Havven, and SNX was transformed from this project.

The core roles in the Synthetix ecosystem: the system token SNX, the synthetic asset Synths, the stable currency sUSD, and the trading protocol Synthetix.Exchange.

Its operating logic is that all synthetic assets Synths generate sUSD through the over-collateralization system token SNX, and then use sUSD to purchase Synths on Synthetix.Exchange to generate.

In addition to generating sUSD, users who pledge SNX can obtain transaction platform fee dividends and LP liquidity rewards.

The advantage of the Synthetix ecology is that it forms a tight closed loop around SNX and the derivative stablecoin sUSD. The disadvantage is that this ecology is a closed self-circulation ecology, and ecological increment will become the core issue for the sustainable development of Synthetix.

In this regard, Kain and the Synthetix community have made a series of attempts in 2020, including further improving the ecological governance system, establishing multiple DAOs with different functional roles to share governance responsibilities, upgrading Synthetix.Exchange to the new version Kwenta, and L2 attempts. The launch is based on the launch of the decentralized asset management protocol dHEDGE, etc.

• UMA（https://umaproject.org/, token UMA)

UMA was founded by former Goldman Sachs trader Hart Lambur and has received investments from Bain Capital and Dragonfly. UMA is the abbreviation of Universal Market Access. It is committed to building an infrastructure that allows users to create custom mortgage synthetic tokens, including smart contracts that do not require price feeds on the chain, support the generation of synthetic assets, and a decentralized oracle system , to provide price data services for UMA's smart contracts.

Through this infrastructure, UMA allows users to create custom collateralized synthetic tokens that can track the price of virtually anything. UMA tokens allow holders to vote on price data services and participate in regulating important parameters in the UMA ecosystem.

In 2020, UMA released the following important products: Yielddollar, a synthetic dollar stablecoin, collectively known as the Ethereum Gas derivative uLabs Gas Future Token, and announced a cooperation plan with Yam.

Judging from the current product design, UMA's ecosystem is more open than Synthetix's, and the financial logic of the released products is sophisticated, but it is relatively complex and has not yet been applied on a large scale.

UMA performed well in the third quarter of 2020. The price of the UMA token increased from $1.92 at the beginning of the quarter to $9.42 at the end of the quarter, an increase of 390%. In early September, it surpassed yearn.finance, the largest DeFi dark horse, and became the second largest DeFi project after Chainlink in market value.

• PerlinX（https://perlinx.finance/, Token: PERL)

PerlinX is a decentralized synthetic liquidity pool that supports the creation and trading of synthetic assets.

PERL is its native token, and by using UMA, you can over-collateralize PERL to generate any type of synthetic asset.

• dHEDGE（https://dhedge.org/, token: DHT)

dHEDGE is an asset management protocol built on top of the Synthetix synthetic asset protocol.

dHEDGE allows anyone to build their own investment funds on Ethereum, or invest in funds managed by others in a completely non-custodial manner, integrating the concept of decentralization and permission-free into traditional asset management services.

dHEDGE adopts robo-advisor strategies and joins community participation, so that everyone can become a"Investment Advisor Robot"。

dHEDGE has issued the governance token DHT.

• Mirror（https://eth.mirror.finance/, token: MIR)

Mirror is a synthetic asset protocol launched by Terra.

Mirro uses the Band oracle to feed prices, and synthetic assets are minted on the Terra chain, which can be cross-chained to Ethereum.

MIR is its governance token.

• ARCx（https://arcx.game/, Token: ARC)

ARCx is a GameFi project for synthetic assets that generate collateral-backed stablecoins.

You can over-collateralize tokens such as LINK to generate LINKUSD, and these derivative stablecoins can freely wrap interest-bearing financial assets such as arcUSD.

text

3. Stablecoins (18)

We divide stablecoins into two types: encrypted asset collateral (decentralized stablecoin) and fiat currency collateral (centralized stablecoin).

(1) Encrypted asset collateral type (decentralized stable currency, 11)

• DAI（https://makerdao.com, token: DAI)

DAI is the first and largest decentralized USD stablecoin (1:1 pegged to USD), issued by the Maker Protocol in December 2017, with a current circulating supply of more than 100 million USD.

Its collateral assets do not come from real U.S. dollars like USDT, but digital currencies. DAI supports self-issuance and redemption by anyone by mortgaging ETH, WBTC and other tokens, but a certain amount of "borrowing" interest needs to be paid.

In the DeFi world, DAI usually has three uses: releasing liquidity & increasing leverage, earning interest for financial management, and "fighting against deprivation".

Release liquidity & increase leverage means that when you bet a large amount of funds on a certain currency and are bullish on it, and you need liquidity funds, you can mortgage the token to borrow DAI. You can buy the borrowed DAI as a bullish currency, which is called leverage; you can also use it for other purposes, which is called releasing liquidity.

Earning interest in financial management refers to depositing DAI to a third-party mortgage lending platform to earn interest. Of course, Maker also officially launched a deposit interest-earning product (DSR), but it is more of a part of monetary policy, and the interest rate is also manually adjusted, which is somewhat different from the specialized lending platform.

In addition, there is another very important reason for users to hold DAI: its token contract is one of the few stablecoins without administrator authority, that is, the administrator cannot block the DAI held by a specific address, which can be described as decentralized and highly Free USD Stablecoin.

according to

according toDeBankAccording to data, in the past year, the issuance (lockup) of DAI has increased from hundreds of thousands of US dollars to 1.07 billion US dollars, an increase of more than 30 times, accounting for more than 99% of the decentralized stable currency market, and it is also the largest lockup in DeFi The product.

• Neutrino Dollar（https://neutrino.at，USDN）

Neutrino Dollar came out in February this year, byWAVESaccording to

according toQKL123Data, as of January 5, the USDN circulation market value was 26 million US dollars.

• SAI（https://sai.makerdao.com, Token: SAI)

Many people may not know that SAI is the predecessor of the current DAI. Before November 2019, DAI was still using single-collateralization model (SCD). Since then, Maker has officially launched multi-collateralization DAI (MCD).

Although the SAI system has been shut down, according toQKL123Data, there is still a certain amount of SAI circulating in the market. As of January 5, SAI had a market capitalization of $6.64 million.

• mUSD（https://mstable.org, Token: mUSD)

mUSD is an aggregated USD stablecoin issued by the mStable protocol.

mUSD is one of the mStable assets, which aggregates a basket of similar designated tokenized assets into a new enhanced asset.

Currently, you can mint mUSD by depositing TUSD, DAI, USDC, USDT. To celebrate the beta launch, mStable is currently setting the stablecoin conversion fee at 0.1%.

Users can store mUSD in the mStable savings contract to earn interest. The essence is to lend to lending platforms including Compound and Aave. The lending channel is determined by the MTA holder.

according to

according toDeBankData, as of January 5, the circulation of mUSD was 29.5 million pieces, and the 24H turnover was 10.6 million US dollars.

• sUSD（https://synthetix.io/, Token: sUSD)

sUSD We mentioned in the introduction of the Synthetix protocol that it is a dollar-pegged currency.

Users can deposit SNX tokens in the mortgage contract to generate sUSD, which can then be traded with other synthetic assets on Synthetix.

In the Synthetix platform, sUSD acts as a debt obligation. When users mint sUSD, they will receive a share in the debt pool of all synthetic assets minted. Therefore, the market demand for minting and issuing more sUSD depends on the demand for minting and synthetic assets.

The value of the sUSD token remains stable in a similar way to most algorithmic stablecoins, that is, users can use sUSD to arbitrage other synthetic assets in the debt pool.

• Reserve（https://reserve.org/, RSV and RSR)

Reserve Protocol is a digital currency provider planning to issue a reserve-backed, redeemable and regulated digital currency on Ethereum. The Reserve program will use two complementary tokens, RSV and RSR.

RSV is a decentralized stablecoin backed by an ever-changing basket of assets, and its price is anchored to the U.S. dollar in the early stages.

The initial target value of the RSV token is $1, but in the long run