After more than two years of dormancy, DeFi broke out in the summer of 2020. From mid-June to the present, only three months have passed, and the various intensive evolutions are dazzling. This is by far the most innovative stage in the history of encryption.
Mining
In the DeFi field, Synthetix is the initiator of liquid mining.
Synthetix initially provided SNX token incentives to users who provided liquidity for the sUSD pool on Curve. That is to say, on Curve, users who provide liquidity to the sUSD pool can get corresponding SNX rewards according to their proportions. Later, it also cooperates with renbtc and other project parties to conduct joint liquidity mining.
Why does Synthetix engage in liquid mining? Because Synthetix is a synthetic asset generation and transaction protocol, if there is no liquidity, its synthetic assets are meaningless. Therefore, whether it is sUSD, sBTC, sETH, etc., it needs liquidity and needs someone to trade before it can develop.
How to guide liquidity is not enough by relying on its own internal system. It is also a good way to guide it through other DEX platforms. This is an important reason why Synthetix uses the Curve platform to successfully promote its liquidity.
Bitcoin is the ancestor of mining in the encryption field.
When it comes to mining, Bitcoin is inseparable. Bitcoin is the first token in the crypto field and the first cryptocurrency to introduce a mining mechanism.
Bitcoin introduces a mining mechanism for the security of its network. Mining first solves the problem of bookkeeping rights and token incentives, and second, it solves the problem of security at the same time. This is a very clever game mechanism design. Participating in mining can be rewarded. Mining is also the distribution mechanism of Bitcoin. It has realized its value storage and value circulation through the model of rewards per block and the model of halving every four years, becoming the first success. The encrypted native token has become a true "digital gold".
Bitcoin mining introduces calculations and also introduces energy. This gives Bitcoin intrinsic value. Today's DeFi mining is often pledged assets, and then get corresponding rewards. Why does DeFi no longer engage in this kind of PoW computing power mining? There are many reasons, but one of them is that the PoW mechanism has helped the entire encryption field complete the most basic accumulation of native assets. Bitcoin is currently worth more than 200 billion U.S. dollars, and Ethereum is currently more than 40 billion U.S. dollars. These are the most important in the encryption field. The most important and safest assets are all generated through the PoW mechanism, which is equivalent to completing the most important first step in the construction of encrypted assets Lego, that is, the process from 0 to 1.
On this basis, PoS took advantage of the trend. Because of these original encrypted assets, many other assets have been derived from the original encrypted assets. Today's DeFi mostly obtains the distribution of tokens through pledged assets. The reason why this can be done is because Bitcoin and Ethereum have paved the way for today's situation.
In the English discourse system, mining has become "Yield Farming", and it has become the sowing and farming of income. In this discourse, funds are regarded as seeds of crops, planted in different lands, and then harvested. Behind it is that no matter whether it is planting seeds or land, it is already ready.
Compound and Balancer are the promoters of liquid mining.
Although the successful experiment of Synthetix, the accumulation of Bitcoin, and the smart contract platform of Ethereum, the detonation point of the DeFi field stems from the liquidity mining of Compound and Balancer, which is also the natural accumulation of the industry.
Compound started liquidity mining on June 15. After its launch, it broke out instantly. Its locked assets once exceeded 1 billion U.S. dollars. Even when liquid mining blossomed everywhere, its locked assets still exceeded 700 million U.S. dollars.
COMP is the governance token of Compound, an ERC20 token, which allows holders to delegate tokens to others to vote. Any token holder can participate in the governance of Compound. As long as you have 1% of the entrusted tokens, you can initiate governance proposals, including adding new assets, changing the interest rate model and other parameters or variables of various agreements. COMP is not only a governance token, but also a token that captures its business value. All borrowers and lenders on Compound have the opportunity to receive COMP token distribution. The total number of tokens allocated for mining is 4,229,949. 50% of the tokens are allocated to the lender, and 50% of the tokens are allocated to the borrower. The higher the price of COMP, the stronger the motivation of users to deposit and borrow money.
Blue Fox Notes has been paying attention to Balancer very early. Before it launched liquid mining, its liquidity was less than 20 million U.S. dollars. Now Balancer has more than 480 million U.S. dollars in liquidity. Balancer's liquidity token pool has an adjustable weighting factor, and a fairer token distribution can be achieved through weight adjustment.
Mining + fork
YAM is the initiator of mining + fork.
When AMPL came out, there were some imitators, but none of them caused a sensation in the crypto community. But YAM is different, it stirred up the entire crypto community.
Why is YAM so attractive?
YAM is also a fork of AMPL, with only a few new features such as the reserve library added. An important reason why YAM was able to detonate the community was that it combined the AMPL+YFI mechanism. YAM is a variant of AMPL, but at the same time its issuance mechanism adopts the YFI model. That is, YAM merges AMPL and YFI what is most capable of detonating the community. Therefore, as soon as it appeared, energy burst out.
Sushiwap is the promoter of this trend.
In the DeFi field, DEX is the largest position. The previous top three are Uniswap, Balancer, and Curve. In addition, there are more than a dozen DEX with daily trading volume exceeding 10 million U.S. dollars. The trading volume of DEX is getting bigger and bigger, in fact, it has become the future opponent of CEX.
Sushiswap is a project that pushes the fork + mining trend to the highest level. Because Sushiwap not only forked Uniswap, but it also increased the token distribution mechanism for mining, and finally tried to draw salaries from the bottom to take away Uniswap's liquidity. The thirteen token pools that participated in the early mining of Sushiswap, including USDT, USDC, DAI and other stable currency token pools, as well as mainstream DeFi token pools, are the most liquid pools on Uniswap.
In order to stabilize its liquidity, Uniswap launched the UNI token and launched a mining plan of four pools, including three stablecoin pools and one WBTC pool. Uniswap's counterattack is very exciting, but Sushiswap still retains 500 million US dollars of liquidity, and the current mining revenue on Sushiswap is almost the same as that of the Uniswap mining pool. Uniswap did not show a comprehensive crushing advantage over sushiswap, and a relatively balanced mining income situation appeared in the DeFi field.
Fork + liquidity mining has a diminishing effect
Although various fork + liquidity mining projects are emerging one after another, if it is just a simple and crude imitation, it is basically unsustainable. This can be seen from various "food swaps" that imitate Sushiswap, and the end result is often a death spiral.
With the development of time, there will be more and more micro-innovations in liquid mining. These projects may not be big, but because they have minor changes, there may be some new developments in the continuous iteration. Pickle (Pickle) began to have some small ideas, showing some different things.
Pickle's goal is very simple and focused: to make unanchored stablecoins (DAI, USDT, USDC, sUSD) closer to their anchor prices. Pickle pickle is an experimental agreement. In order to achieve the goal of bringing stablecoins closer to its anchor price, it uses liquid mining incentives, capital pools, and governance methods.
Recently, Pickle has continuously launched aggregate mining of canned cucumbers (pJars) in an attempt to add value to PICKLE tokens, instead of being unable to retain liquidity under the crude mining distribution mechanism like the previous "food swap". Pickle’s canned cucumber is similar to YFI’s yVault. There are currently 4 aggregate mining pools, pJar0.69a\b\c and pJar0, with locked assets of more than $70 million. However, since the contract did not participate, participation must be cautious.
In addition to Pickle, Safe's combination of purchasing insurance and mining is also a new attempt. However, this has also caused some side effects. Since many users purchase insurance for mining, users who normally want to purchase insurance cannot purchase insurance at a certain time. This also shows that the insurance track urgently needs new practitioners.
Fusion of DeFi+NFT
Recently, there is a MEME token. At the time of writing of Blue Fox Notes, its market value was more than 29 million US dollars, with a total of 28,000 MEME tokens. The interesting part of this project is that it combines NFT and DeFi.
Meme is also a mining project, but it is not mining token revenue. Instead, earn a limited edition of NFT through pledged assets. In short, Meme is a decentralized NFT mining protocol.
Currently Meme has two mining pools, one is to deposit ETH/MEME LP tokens on Uniswap to mine NFT on LP Genesis. One is to deposit MEME tokens to mine NFT on Genesis.
In the Genesis Pool, after each MEME token is deposited in the Genesis Pool, one MEME coin can earn 1 pineapple point per day, up to 5 points. When there are enough pineapple points, it can be exchanged for NFT.
In the Genesis LP pool, users staking MEME/ETH LP tokens on Uniswap can also earn pineapple points. The amount of pineapple points earned depends on the amount of pledged users, and up to 5 pineapple points can be earned per day.
After users earn enough pineapple points, they can choose their favorite NFT for redemption.