DeFi Weekly: A new addition to the MakerDAO competitor

DeFi Financial Locks reached $813 million. Among them, MakerDAO is 378 million US dollars, the market share has reached 46.55%, EOS REX is 333 million US dollars, and the market share has reached 41.01%, a slight increase from last week.

According to DAppTotal.com DeFi data, there are 16 ETH public links in the current DeFi project, with a total lock of 469 million US dollars, accounting for 58%; 2 EOS public chains, total locks 331 million US dollars, accounting for More than 40%.

This week's block rhythm BlockBeats DeFi Weekly main trends:

Nexo offers 8% fixed rate CDP refinancing

DeFi project locks up to $813 million and EOS DeFi accounts for 40%

MakerDAO lock chamber ETH drops to less than 2 million

Messari launches cryptocurrency index CIRI

Reserve stable currency: can cope with monetary inflation

DeFi Industry Trends

Nexo offers 8% fixed rate CDP refinancing

NEXO is a cryptocurrency-based cash lending platform backed by TechCrunch founder Michael Arrington, who will use his own assets to provide loans or credit lines. On May 9, NEXO issued a statement saying it would provide a 8% fixed rate CDP refinancing service.

NEXO believes that after a series of stable fee increases, MakerDAO's Mortgage Debt Position (CDP) stable interest rate is currently 19.5% per year. The goal is to drive some of the users already on CDP to buy DAI from the open market and repay it back to the system, pushing the price of DAI up to the expected exchange rate of $1.

According to Grapefruit Trading's analysis, the mechanism for raising interest rates is inefficient in restoring pegged exchange rates because CDP must be strictly closed by its owners. Although the cost of stabilization has risen sharply, users may avoid turning off their CDP for the following reasons:

If you can't do this, closing their CDP requires enough free money to buy DAI on the open market. In addition, users who spend loan income in the real world face additional friction because entering and exiting systems is still a challenge, even on reputable exchanges, due to limited liquidity and large spreads and transaction costs.

I don't want to do this because I look at the collateral and think that the potential upside is still higher than the high interest rate.

To keep users from being liquidated by the CDP system, Nexo has been approached by dozens of customers to help them refinance at a lower price. Nexo intends to address these issues by providing CDP holders with an option to refinance at a fixed rate as low as 8% and to meet the specific needs of both types of users.

Compared with other borrowing DeFi, Nexo provides refinancing to close CDP. The main features are: 8% fixed interest rate, predictable and clear interest rate cap, no clearing fees, lower clearing threshold, 120% of outstanding loans, partial loan re-re Balanced rather than fully liquidated, bank/stable currency transfers can be used for repayments and collateral sales.

DeFi Weekly Data Overview

DeFi project locks up to $813 million and EOS DeFi accounts for 40%

As of May 12, DeFi Financial Locks reached $813 million. Among them, MakerDAO's market share reached 46.55%, a slight decrease from last week. The market share of EOS REX reached 41.01%, a slight increase from last week.

According to DAppTotal.com DeFi data: In the past week, the faster-growing DeFi projects include Moloch, dYdX, Tokenlon, Bancor, and others. In the current DeFi project, there are 16 ETH public chains, with a total lock of 469 million US dollars, accounting for 58%; EOS has 2 public chains, with a total lock of 331 million US dollars, accounting for 40%.

The EOS DeFi class project was born in a shorter time, but the growth rate is fast, and there is a possibility of catching up with ETH. Overall, the total lock-in funds of the DeFi project increased by 15.47% in the past week.

MakerDAO lock chamber ETH drops to less than 2 million

According to LoanScan, the current DAI DIPOR is 18.71%. (Note: DIPOR, Decentralized Inter-Protocol Offered Rate, decentralized financial market-driven benchmark interest rate)

In the past 7 days, MakerDAO, Compound and Dharma have borrowed approximately $6.14 million in loans from the DeFi platform. Among them, MakerDAO accounted for about 4.68 million US dollars, Compound accounted for about 640,000 US dollars, and Dharma occupied about 820,000 US dollars.

The current MakerDAO stabilization fee is 19.5%. The loan interest rate of Compound is 14.74%, and Dharma is about 14%, which is still inferior to MakerDAO.

As MakerDAO's stabilization fee is raised by 19.5%, the price of DAI is close to the expected US dollar exchange rate. At present, ETH of MakerDAO has been reduced to 1.96 million, accounting for 1.8539% of total ETH supply.

DeFi New Partner Introduction

Messari launches cryptocurrency index CIRI

We reported in the April 19th issue of the DeFi Weekly that DIPOR organizers are introducing LIBOR for open finance, an on-chain forecast of weighted average lending rates for specific cryptocurrencies. Ideally, DIPOR provides a suitable rate reference for different segments of the market by calculating the specific cryptocurrency platform rates.

Blockchain database service company Messari recently released the Cigarette Interest Rate Index (CIRI), which is considered a short-term risk-free rate for Bitcoin.

Their index consists of the following instruments: BitMex Futures Rate, CME Futures Rate, Bitfinex Loan Rate, Poloniex Loan Rate, etc.

There are several reasons for including these specific rates. First, to achieve risk-free interest rates, borrowers need to be fully mortgaged. In a new field like encryption, the counterparty's funds are insufficient, such as the US government, so these agreements are not included in CIRI. Another important aspect of this approach is that they only use instruments that mature within 90 days, because only a few tools allow loans for more than 90 days, which distort the value of CIRI.

Messari pointed out that the index's data will rely heavily on the frequently updated rates of centralized lending channels. For now, CIRI can also provide guidance for updating daily rates for platforms such as Genesis, BlockFi, and Unchained.

Stabilization Reserve will launch a legal currency payment application in Venezuela and Angola

This week, according to Decrypt, a dollar-backed stable currency, Reserve Dollar, will be available in Venezuela through its Reserve app. The goal is to provide a volatility-based, less volatile alternative to respond to ongoing hyperinflation in countries. On May 13th, Fire Co. Prime announced that its third project is the stable currency project Reserve.

Stabilizing coins and the corresponding Reserve app allow citizens and businesses to store assets and use the app to shop and make international remittances in the store. So far, Venezuela has used many cryptocurrencies to hedge against high levels of inflation, but they are still subject to fairly unstable prices.

Reserve is a decentralized stable currency system that can be expanded as needed and built into a reserve of 100% or more of the chain collateral. Last June, Coinbase, PayPal founder Peter Thiel, digital asset management company Distributed Global, blockchain asset liquidity solution provider GSR.IO and 40 other investors were supported.

The initial version of the Reserve agreement will contain a generally centralized digital currency that is anchored to the currency. Over time, each protocol component will gradually move to the chain and gradually leave the control of the founding team, eventually Become completely decentralized. According to the plan, the Reserve network consists of three phases:

Centralization phase: The Reserve token is guaranteed by the US dollar and is held by the trust company.

Decentralization phase: Reserve tokens exist in a decentralized manner, guaranteed by a constantly changing portfolio of assets, but the value remains stable relative to the US dollar.

Independent phase: Reserve tokens are no longer tied to the US dollar to stabilize their actual purchasing power, regardless of fluctuations in the value of the dollar. There will be three types of tokens in the Reserve system at this stage, namely:

Reserve Stablecoin (RSV), a stable currency, similar to other stable currencies;

Reserve Right Token (RSR), the token of the agreement, used to govern, promote and guarantee the stability of the stable currency;

Collateral Tokens, other assets in smart contracts that guarantee the value of a stable currency (100% mortgage rate, mortgage assets including tokenized goods, currency securities or mainstream digital assets, etc.)

According to the Route official website route, the Fire Money Prime will release the IEO token as RSR. In 2019, Q2 will launch the stable currency guaranteed by the US dollar. The Reserve Dollar (RSD) held by the trust company will not launch the decentralized stable currency until 2020. RSV.

Similar to MakerDAO, Reserve is clearly a “dual-currency mechanism” that distributes coins that are more stable than the US dollar, and on its other hand, manages and promotes the stability of stable coins through its own token RSR.

However, in the way of issuing stable currency, MakerDAO's stable currency is currently generated through over-collateralized ETH, and will be added to multi-currency mortgages in the future. Reserve is the generation of stable coins in two stages of a package of asset guarantees held by a dollar-guaranteed trust company. On the mortgage rate, Reserve stated that it was backed by 100% assets and did not have a clear mortgage rate as MakerDAO.

Currently, MakerDAO has achieved leadership in Ethereum's single-currency mortgage. Multi-currency mortgages and mortgages on a package of assets are not a big obstacle in terms of technology. MakerDAO is being launched and I believe it will be seen soon. Reserve this year, only the stable currency RSD, which is guaranteed by the trust company and held by the trust company, is launched this year. Similar to the Gemini Dollar, there will be decentralized stable currency RSV until next year.

As for the two sides who are more competitive, the current Reserve has not yet landed, MakerDAO has taken the lead. However, in the future, stable currency is a large enough market. In the short run, no one can gain an absolute advantage. The coexistence of multiple stable currencies will remain a long-term trend.