Shenyu: Future PoS is a better choice, Staking and Defi may form a game

On April 24th, at the Cobo Custody new product launch, Cobo announced that it will launch Cobo WaaS cloud service for blockchain innovation and startups, aiming to lower the blockchain entrepreneurs' entrepreneurial threshold and Cobo StaaS for digital asset institutional clients. Cloud services are designed to provide institutional customers with secure and reliable digital asset storage services while further providing value-added services for digital assets.

Cobo StaaS currently offers three categories of options, one is a fully managed service, the user fully hosts a certain PoS currency to Cobo, and does not own the private key; the second is to participate in the node voting, the user has his own private key, through the smart contract The way to transfer Cobo voting rights is equivalent to using voting rights to mine; the third is node-based operation and maintenance, which is aimed at some large-scale customers and institutional users.

From the action of Cobo, we can see that the old man of the coin circle also began to carry out a series of layout around the PoS. Why is the Staking economy going out this year and being unanimously supported by miners and investors?

Shenyu: Future PoS is a better choice

Cobo wallet founder Shen Yu said that there is one thing that touches him a lot, that is, a series of things that started Bitcoin expansion from 2015, including BCH fork, BSV fork and so on. This process exposed a problem:

How to participate in the governance of the community?

There are three forces in the PoW currency led by Bitcoin. One is the developer, providing the core code for technical upgrades; the second is the miners, maintaining the blockchain security; the third is the money-holding users, who form a game of separation of powers.

“It is very difficult to complete huge technological innovations and upgrades in a distributed, decentralized system, because it is very difficult for the three parties to reach a consensus, and the split is inevitable, so they see so many forks.

However, PoS solves this problem very well. It is a kind of pledge of power. Users naturally have the right to vote. The holders of the money and the voting users are completely consistent, and the users exercise the right of community governance.

The mechanism of the separation of Bitcoin's three powers guarantees its stability, which we can use to store values. But if you want to make the blockchain quickly iterate in the future and adapt to various types of applications, PoS is a better choice. "The fish said. 2019 is the first year of Staking. At present, there are more than 80 public chains supporting PoS. The locked price is more than 6 billion US dollars and the total market value is 180 billion US dollars. According to public data, due to the large number of public links coming online this year, it is estimated that the $2.5 billion digital assets are generated based on PoS, and the annualized revenue of PoS currency comprehensive mortgage is about 10%.

But correspondingly, Staking currently has only 3% participation. Shenyu believes that the reason for this contrast is that for PoW mining, some people have cheap power resources, and professional hardware equipment can achieve one-click fool mining, while PoS is very early, lacking an important foundation. facility.

"For example, some technical vulnerabilities and bugs may cause nodes to be unstable, but these nodes running PoS need to maintain very low latency, very high stability, and may be punished in the event of inaction. The nodes of the PoS currency are deducted by RMB 170,000 for one minute without a block, so running a PoS node requires very strong technical capabilities.

For another example, the PoS currency needs to lock the token for a period of time to obtain voting rights, and the lock-up period generally ranges from 3 days to 4 months. In this process, many unexpected situations may occur. Users may need to do some operations in the event of fluctuations in the currency or currency price. If the price of the currency circle fluctuates greatly, the user will suffer a large loss, and it is difficult for the average user to have Better liquidity to resist such shocks, so the existence of a third-party custodian is needed.

Why are investors generally optimistic about the Staking economy?

At the round table of the conference, several investors shared their knowledge of the Staking economy and explained why they are optimistic about PoS?

Yan Jingsi, Managing Director of Danhua Capital: In terms of trends, I like to lengthen the time. Suppose that after twenty years, the blockchain can really change the world, something will exist, and nothing will exist. I think everyone can form a consensus that bitcoin should exist, so what is left? I believe that after 20 years, we can poke the megatrends. Now we can already see the fire of the stars. We think it is PoS. PoS separates ownership from voting rights, and voting rights are like squid, which makes the transaction active. From this perspective, PoS will be more diverse than Pow and the track will be wider.

Zhu Ruizhou, Managing Director of Fengrui Capital: Everyone is familiar with PoW. Bitcoin is a deflation model. It is the first application on the blockchain, which is value storage. Everyone regards it as gold. But in the future, we hope that blockchain technology can be used by everyone, not just where it is, so we need another economic model. It is like the Chinese economy needs to develop. M2 must release water. In order to encourage everyone to invest and use the money in the more important part of the system, I think the PoS plus inflation model is more in line with this requirement.

Jin Yikai, Vice President of Linear Capital Investment: The PoW model led by Bitcoin reflects the storage value of the currency to a certain extent, but to make the digital currency become a currency to a certain extent, it is still necessary to realize its circulation value. Adding inflation is a better way to achieve it. Whether in the field of traditional finance or the innovative financial sector of digital currency, professional people are doing professional things, and Staking represents such a trend to a certain extent. Few people will really understand the banking system, or all aspects of the complex financial environment, so it is necessary for the market to do professional things to professional people.

Staking and Defi may form a game

At the end of the conference, Babbitt interviewed the sacred fish and Cobo Custody co-founder Jiang Changhao on the centralization issues that Staking may cause, the future competition between Staking economy and DeFi economy, and Cobo's strategic ambitions.

Babbitt: Staking is equivalent to a new form of mine, because Staking's annual rate of return is a non-dilution inflation, which will definitely stimulate the holding of credit users into the Staking pool. Do you think this market will form several giants? More dispersed? Will it replay the power war?

Shenyu: Now the project side of the PoS public chain has noticed the centralization and head effect of the power, so a lot of checks and balances have been designed, which may slow down this trend.

Babbitt: It seems that no matter what consensus mechanism, it is always inevitable to go to the center. What do you think of this?

Shenyu: Looking back at human society is also such a historical process, which is inevitable.

Babbitt: There are two recent hotspots, one is Staking and the other is DeFi. With Ethereum turning to PoS, users can use ETH to do Staking mortgage hosting for wallet, and can also borrow on DeFi platform. How do users choose? ?

Shenyu: Ethereum to PoS still needs a long process, not so smooth. Suppose we have completed the PoS conversion. For node voting and decentralized finance, how users in the Ethereum ecosystem choose these two services depends on the profitability and liquidity they receive. Because Ethereum's PoS liquidity will be much worse, there may be a period of several months, some users have very high requirements for liquidity, and may not choose Staking.

Babbitt: Will Staking and Defi form a competition in the future?

Shenyu: It is possible to form a game.

Babbitt: At first, everyone didn't know what the fish would like to do. Later, I found that the Cobo wallet became the entrance to Staking. It was still a mining pool. So if you want to ask the god fish, what is your strategic plan?

Shenyu: Looking back at the whole process of starting a business, if we don't talk about specific business, we are actually doing one thing, that is the infrastructure of this industry. Because we are technology-driven companies, what we want to do is the industry's most basic, problem-solving infrastructure that best drives the industry forward, whether it's a mine, wallet, hosting service, or The two products released today are all around this heart.

Babbitt: General Jiang mentioned in his speech that you can do Alibaba Cloud in the blockchain field, can you explain it specifically?

Jiang Changhao: The source of Aliyun's model is AWS. In 2007 and 2008, Amazon accumulated a lot of technologies, including infrastructure, performance optimization, big data analysis and other technical functions, in order to support the rapid development of e-commerce business. The technology has well supported the rapid development of Ali's business over the past decade. At that time, Ali foresees that the Internet may become an indispensable infrastructure for the industry like water, electricity and coal. At the same time, American innovators quickly realized that using AWS could greatly reduce the trial and error costs of their Internet startups, including time and development costs, and Ma Yun then saw this opportunity.

This coincides with our thinking. The future blockchain will also be a huge industry that transforms all aspects of human society. It has many similarities with the industry path and development process of the Internet. It is very early, but the more early the lack of infrastructure, this is what we have to do.