Babbitt Exclusive | Staking + DeFi + DAO, the rough collision of complex transactions and simple governance

Recently, the author has seen two messages in succession. Because the names are very similar, they almost confuse me.

Message 1: Jonas Lamis, CEO of Tezos Capital, founded Staker DAO, and holders of Staker Token (STKR) will generate value from the DeFi agreement.

Message 2: Stake service provider Stake Capital launches Stake DAO, announcing that it will provide a DAO for revenue sharing for DeFi services, so that DAO holders can continue to receive Staking rewards.

DAO? DeFi? Staking? Is this a Scrabble game …

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After carefully reviewing the information, the author found an interesting phenomenon: DeFi, Staking, and STO, as the three major concepts of the currency circle in 2019, attracted a large number of believers. With the baptism of a bear market, people looked down at their empty bowls and began to look inadvertently next door.

Not surprisingly, financial products bundled with Staking and DeFi will become a new trend this year.

Let's first look at these two projects separately:

1

Tezos pledged market value approaches EOS, hopes to become the leader of Staking

Tezos is the largest ICO in 2017, attracting $ 232 million, and its popularity abroad is comparable to domestic EOS. Tezos is also the first Staking project supported by Coinbase known for its caution, and Binance's first batch of supported projects. According to StakingRewards data, Tezos has recently approached EOS, and even has become the largest pledged Staking project in a few days.

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According to official website data: Tezos has 440 active Bakers, the pledge rate of the token XTZ is 79.16%, the annualized return is 6.38%, and the annual inflation rate is 5.05%. It can be seen that Tezos' annualized rate of return is not dominant in many Staking projects, and its ability to occupy the leading position depends on 2 points.

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First, the price performance of Tezos' token XTZ is very good. After the bear market was adjusted, it quickly got out of its own independent market, avoiding the situation where many Staking projects earned money and lost fiat. According to the data from Block123, XTZ has increased by 85.19% since its launch. With the circulation market value of 15.26 billion yuan, it has squeezed into the tenth place. The price of coins and Staking results are often complementary. The more stable the price of coins, the more Stakers. On the other hand, the prosperous Staking ecosystem also greatly reduces the selling pressure of coins.

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The second is that Tezos is the pioneer of on-chain governance, which combines on-chain governance with Staking. Similar to the public chain project logic of most POS mechanisms, a certain number of tokens are eligible to become Saker. The more tokens held, the higher the probability of being selected as a verification node.

On the Tezos public chain, Staker is called Baker (baker) because the Tezos protocol has the ability to "self-correct" just like a baker observes the fire. Tezos allows modification of not only the protocol, but also the rule itself, and it does so through multiple rounds of voting.

Tezos takes a slice of DeFi to fight cross-chain duopoly?

Such a successful Staking project has also focused on DeFi. To take a piece of the growing DeFi market, Tenas Capital CEO Jonas Lamis founded StakerDAO.

In an interview in January of this year, Jonas Lamis elaborated on the original intention of establishing StakerDAO: After talking with different POS public chain validators, Jonas Lamis realized that everyone has the risk of a single token. So he began to look for opportunities to work on creating synthetic derivatives from the POS ecosystem, which not only provides greater long-term upside space, but also spreads downside risks into the best POS network.

With the success of MakerDAO, StakerDAO has sought a similar solution that generates value from the underlying DeFi protocol. StakerDAO combines the DeFi application scenario and the Tezo governance structure, using Tezos as the first layer of the Staker token (STKR), and relying on Tezos to manage the distribution and exchange of STKR.

Please note that a new token STKR was born here. What is it for? StakerDAO is a decentralized autonomous organization. STKR holders are responsible for electing the board of directors and working with the operations team to submit monthly Staker proposals, such as launching synthetic tokens, index funds, or stablecoins. As these projects generate revenue, profits eventually flow back to STKR token holders.

From this we can see Tezos' concerns and ambitions. As the first generation of Ethereum competitors, Tezos, Cardano, and EOS did not actually defeat the king. Now that Ethereum 2.0 is coming, Polkadot and Cosmos, the second-generation Ethereum contenders, "cross-chain duo" are gaining popularity. If nothing is done, Tezos may be forgotten by investors in Hercules.

The field of public chain competition in 2020 is "cross-chain". Tezos has missed the lead in this dimension, so it tried to find another way. Since the most lively in the currency circle is "finance", as long as token holders can participate in more POS ecosystems and share the benefits of financial derivatives, whether it is Staking or DeFi, is it in a certain dimension? , Also realized the cross-chain of high-quality assets?

Of course, this is just my speculation, Tezos may just want to seize the DeFi track. Judging from past performance, Tezos not only ranked second on the Staking track, but also has the momentum to replace EOS on the throne; it also achieved impressive results on the STO track. Last year, nearly $ 3 billion of STO assets were issued based on Tezos. It has attracted global attention, including New York asset management company Elevated Returns, Latin America's largest investment bank BTG Pactual, Dubai asset management company Dalma Capital, German blockchain technology company Fundament … and also reached a cooperation with the STO exchange tZERO.

StakerDAO expects that the new DeFi application will pass Staker Agora in Q1 or Q2 of 2020. Staker Agora is the name given to the governance process configured by Tezos for this particular use case of DeFi. At that time, Tezos will gather the three ace cards of Staking, STO, and DeFi. I wonder if I can summon the dragon?

2

In the previous part, we saw the gameplay of the public chain project party Tezos. Next, let's take a look at the operation of the Staking intermediary agency Stake Capital.

Stake Capital is a cryptocurrency fund that has operated for more than a year, managing millions of dollars of assets. It is also a verification node for more than 12 POS public chains. In September last year, Stake Capital launched the Stake DAO project to provide a revenue-sharing DAO for their DeFi services, enabling DAO holders to continuously receive Staking rewards.

How does it work?

Stake Capital is not willing to be a capital, it provides a DeFi service, users can mortgage some crypto assets, such as Tezos, Loo, Synthetix, Livepeer, Cosmos, Kusama, Polkadot. The user will then receive LToken + SCT, the former anchoring the mortgage asset and the latter being interest.

Why do users do this? Because the current DeFi ecosystem does not yet support multiple assets, in addition to ETH, users have other currencies in their hands and have multiple financial management needs. However, it is not only troublesome to staking each currency separately, but it is also difficult to calculate returns.

Therefore, Stake Capital acts as an intermediary. As a staking node for dozens of project parties, it will absorb many types of tokens and simply issue an SCT on its own to provide users with DeFi services and uniformly calculate the collateral obtained. interest.

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Users will pledge the tokens of Cosmos, Kusama, Tezos, and each mortgage asset will generate liquid tokens or LTokens. These LTokens and the original assets have a 1: 1 anchor relationship. Once the LToken is created, users can trade on the exchange or borrow in various ways on the DeFi platform. When it expires, in addition to accrued equity and paid SCT tokens, the original collateral will also be Unlock.

Stake Capital allocates SCTs in proportion to the cost of collateral, and the duration of the cycle depends on the collateral assets. Since the interest on the mortgage is denominated in SCT, SCT holders can pledge the SCT they earn, thereby harvesting DAO's income dividends on the Stake Capital website and regularly sharing DAO's income.

In other words, through a fierce operation, Stake Capital first turned the Staker of each project into its own DeFi user, and then turned the DeFi user into its own ecological Staker. And it cunningly borrows BTC's deflationary mechanism and Tezos' governance mechanism. SCT has a total amount limit and is issued at a decreasing cycle rate. SCT holders obtain the right to govern DAO in proportion and allow the holder to modify specific parameters, such as adding new DeFi services, changing the token payment rate and income cycle. Deadline, etc.

The story originally ended here, but in the process of consulting the information, the author noticed the connection between some insignificant clues, and the right to share the information after the meal.

Stake Capital's founder Julien Bouteloup is a pretty amazing person. According to his Linkedin, he is not only an entrepreneur, he has founded more than a dozen technology companies around the world, but also an inventor who is obsessed with crazy innovation ideas Pass the Ethereum Hackathon Contest.

He also founded Flyingcarpet, a decentralized oracle, with team members including Leopold Joy mentioned above. Flyingcarpet's project mainly uses sophisticated IoT sensors, drones and satellites to obtain data.

In addition, there is information that Julien Bouteloup is also a stakeholder of ArbitrageDAO. It is unknown how much I have been connected. Public information indicates that ArbitrageDAO has now connected to StakeDAO and can obtain liquidity from Stake Capital.

ArbitrageDAO is a decentralized autonomous organization funded by the Gitcoin platform. The main thing to do is to find arbitrage opportunities from various DeFi platforms. The first uncollateralized arbitrage transaction based on Aave Lightning Loan was executed by ArbitrageDAO.

Behind the decentralized organizations are lively young geniuses who are proficient in various projects and create endless gameplay. I can't help but think of the smart man who recently stole assets through "Lightning Loan". He is clearly aware of various DeFi projects, and he may be hidden behind organizations such as ArbitrageDAO.

3

Finally, for the above two cases, we briefly discuss the two issues of " transaction " and " governance ".

Transaction does not create increment . It just changes the Nash equilibrium point to achieve the optimal solution in distribution, so as to maximize the value. This is the core of the transaction. In other words, if you make money in the transaction, it must be because you make the allocation of resources more reasonable, and everyone gets more.

Staking and DeFi are tied together to create a more playful trading market. The things it trades are essentially the same as exchanges, but more borrowing, leverage, arbitrage and compounding. For the project genius who is born with genius ideas, this really caters to the current needs of the currency circle, because these coins are really useless there, it is better to give them something to do; but for the entire blockchain ecosystem, its The significance and potential risks remain to be considered.

The above cases also have one thing in common. They all adopt the DAO (Distributed Autonomous Organization) governance method, that is, an organization form that can operate autonomously without human intervention and management through a series of open and fair rules. Blockchain projects have made great improvements in the process of DAO, from forking a word to a fork, to not only determining the results, but also changing the rules themselves through governance mechanisms; the scope of governance also ranges from specific public chain projects The problem of code modification extends to the selection of financial products in the entire Sraking and DeFi field.

But this made me aware of the problem. The current governance is how to allow DAO participants to fully express their opinions, make the transition in a smoothest way, and reduce the possibility of community division. But it is difficult to change the participants in this process, their judgments on these decisions have a lasting impact. Governance is both a process issue and a human issue.

In fact, governance is a topic with a long history. The famous economist Mao Yuzhen once said: "From the history of the world, a transformation can be successful, I am afraid that it is not the public. The social reform and social transformation by the public are Very bad, the elites must take the helm, but these elites must truly represent the interests of the public. "This statement may not be universally recognized in the decentralized blockchain community, but in fact, there are indeed many People do not understand, are easily manipulated, and have mastered the absolute number of votes. Modern communication theory also illustrates this phenomenon in one word, which is "the crowd of black people".

What the author wants to explain is that from Bitcoin to Tezos, it is essentially "minority obeying majority". Does it really benefit the development of DAO? When such a simple governance structure collides with such a complex financial form, what kind of world will it bring us? If everyone is interested in this topic, maybe the author can write a special article about "governance".