DeFi provides a financial system that anyone can access via the Internet and has become one of the most interesting topics in the blockchain field of 2019.
Currently, there are approximately 275,000 ETHs per month used to promote the development of the DeFi ecosystem, and this number is expected to increase over time. In 2017, Ethereum ICO detonated the bull market, will DeFi become the "next" bull market explosion?
On May 31st, the 117th AMA of the chain node, 125 community members asked the hot topic of DeFi, the MakerDao Chinese community leader and the head of the imToken product Ashu, Babbitt sorted out the essence. For the 3 parts, it is convenient for everyone to review.
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- What are the threats to Bitcoin?
1. About Decentralized Finance (DeFi)
Defi's full name is Decentralized Finance, which refers to decentralized financial derivatives and related services. It aims to make traditional financial products in a trust-free and transparent way through open source software and distributed ledger technology. interactive.
According to Consensys, more than 100 cutting-edge blockchain projects are pioneering in decentralized finance, such as Ethereum-based stable currencies, DEX (decentralized exchanges), investments, derivatives, payments. , loans and insurance platforms. Statistics show that decentralized finance is now an economic system worth up to $430 million.
Question 1: Why is DeFi so hot? What is the difference between it and Fintech?
Pan Chao: DeFi can be considered a subset of Fintech. The technology and assets used are quite different. DeFi relies mainly on cryptography, distributed fault tolerance and cryptographic asset stimuli. FinTech mainly uses more concentrated data for more accurate prediction and credit, while DeFi is a non-accessible person, everyone can create accounts without identity review. And discrimination.
Question 2: What advantages does DeFi have over traditional finance?
A tree: It can be opened by two client and DeFi project parties.
The advantages of the client include non-qualification thresholds, data transparency, and the completion and delivery of smart contracts.
The advantage of the project side, I once heard a friend talk about the understanding of DeFi. As a graduate of the finance department, DeFi allows him to program as a programmer with a computer. Engineering, no need to rely on any company with strong capital to endorse.
Pan Chao: The points mentioned by Ashu are very good. There is no qualification threshold, that is, no identity discrimination. Data transparency, self-certification, everyone can audit, and the use of smart contracts to complete the match and delivery, high automation and regularity. At the same time, DeFi can solve many things that traditional finance can't do in cross-border finance, and there is no place to provide traditional finance in niche markets and underdeveloped regions. Question 3: DeFi as a financial system accessed through the Internet is currently a hot area. At present, there are many competitive currencies in this field. There are also many head exchanges. How does Ethereum compete as a mature public chain with these competitive currencies? If Ethereum is engaged in the financial system, what kind of operational mechanism is it for everyone to accept?
Pan Chao: For DeFi, decentralization and security are the most important. At present, the safety and decentralization of Ethereum is the highest, and other public chains are difficult to replace. Of course, the speed of Ethereum is controversial. But I always think that slow speed is not a problem with DeFi, but a feature. Important large-value transactions are carried out on the main chain to ensure safety, while micropayments can be completed in the status channel or side chain. Taking Dai as an example, large transactions can be sent in the Ethereum main chain (POW Consensus), while micropayments can use the xDai sidechain (POA Consensus) for speed and convenience. This is also a layered solution similar to the large-value real-time payment system and delayed settlement system in the traditional monetary system.
Question 4: There are a lot of loan products in DeFi at present, but users want to get loans from them and need to mortgage mainstream coins. This shows that the lender's credit rating to the user is mainly based on the fund collateral. Is this credit system too immature compared to the traditional lending market?
Pan Chao: This is a very good question. Currently, blockchain-based lending is mortgage lending, that is, lending with margin. There is no credit loan, which is caused by the lack of identity systems in the blockchain. How to implement identity and credit system and protect privacy in the blockchain is a very challenging problem, because it will inevitably sacrifice trustlessness to some extent. You need to trust a person or institution to issue credit. loan.
A Shu: This issue involves the issue of blockchain autonomy and cannot borrow from real-life credit history or reputation as part of the collateral. However, there are already many projects in the community to study autonomy, how to associate real identity information with blockchain, such as Uport, EIP 725, of course, imToken as a wallet is also very concerned about autonomy, and has been investing in research. Question 5: Can you elaborate on the current DeFi ecosystem at Ethereum?
Pan Chao: MakerDAO (Dai) – Central Bank on Ethereum, Compound – Ethereum's firm and Yu'ebao, dYdX – Decentralized Margin Trading, Augur – Forecasting Market, etc.
Question 6: How do ordinary investors (White) get started with DeFi? Can you tell me about DeFi advanced gameplay?
Pan Chao: For ordinary people who want to play DeFi, you can try "Plastic Dai" in imToken – get liquidity without losing Ethereum's income right, or "Compound" – on the blockchain You can save Dai (US dollar stable currency) interest rate (currently 10% annualized).
Question 7: Will the operation of DeFi be affected by the defects of Ethereum itself? For example, high gas fees and high latency.
A tree: There will be impact, but the basic community has improved programs, such as MetaTx (solving gas cost issues), Layer 2 (solving performance issues).
Compared with the performance problem, the current governance problems encountered by DeFi are more concerned, such as too few governance holders, low voting tokens, and the possibility that the smart contract can not be modified by the delegatecall method.
Pan Chao: I always think that slow speed is not a problem with DeFi (bug), but a feature. Important large-value transactions are carried out on the main chain to ensure safety, while micropayments can be completed in the status channel or side chain. Question 8: Is DeFi the main reason for the promotion of Ethereum? Ethereum as a programmable currency can be used as a fuel for DeFi applications. Does this mean that Ethereum can serve as a clearing layer for DeFi transactions, with unlimited potential?
Pan Chao: Very right, Ethereum is the clearing layer.
Question 9: DeFi doesn't feel like building a tree, and there is no major breakthrough in technology development. It's like PoS suddenly starts to fire again. Isn't the concept of coin circle speculation not fired, and come out?
Pan Chao: The concept of DeFi is being fired, but the products behind it are real. At the beginning of the MakerDAO project, there was no concept of DeFi. In fact, there was no such thing as a stable currency. Our original intention was to provide the decentralized basic stable currency on Ethereum, and later found that the imaginable space is still very large, a global money market and credit system.
Second, about MakerDAO
DAO's full name is Decentralized Autonomous Organization, which means a decentralized autonomous organization. MakerDAO is a DAO project and one of the representatives of the DeFi project.
Founded in 2014, MakerDAO provides the first decentralized stable currency Dai and derivative financial products on the Ethereum's smart contract system. MakerDAO has been applied in pledge loans, margin trading, international transfers, and supply chain finance.
MakerDAO is a decentralized derivative financial system based on Ethereum. It uses a dual currency model, one for the stable currency Dai and the other for the equity token and the managed token MKR. Dai is issued by a full-backed mortgage on the chain, and is 1:1 anchored to the US dollar, 1 Dai = $1. Dai's main online line in December 2017. Through the dual currency mechanism, MakerDAO enables the entire decentralized pledged loan system to function.
Question 1: Can you briefly explain the relationship between MakerDAO and Ethereum?
Pan Chao: MakerDAO can be seen as the central bank of the Ethereum – the provider of the base currency. If you think of Ethereum as a city or a gold asset dug out in a country, and MakerDAO uses this asset as a reserve, everyone can reserve this asset and automatically and transparently distribute the currency – Dai. Dai's generated price is 1:1 anchored by the US dollar.
Reference article: https://www.8btc.com/article/396472
Question 2: The founder of EOS once slammed on Twitter that DeFi in Ethereum has “failed”. He emphasized that BitShares is the earliest DeFi platform, and the MakerDAO team is also a member of the original BitShares development. What do you think of this?
Pan Chao: BM This comment is a bit sour. Ethereum DeFi not only failed, but the most prosperous public chain. The MakerDAO team was born out of bit stocks early, absorbing the excellent mortgage mechanism of BitShares, while Ethereum supports more flexible contracts and safer asset carrying, and more importantly, network effects. This is also why many traditional institutions, including the French currency stable currency, are used as an option for asset distribution.
Question 3: What is the difference between Dai and USDT, TrueUSD and GUSD? How to control the price fluctuation of Dai?
Pan Chao: The assets behind USDT, TrueUSD and GUSD are limited to US dollars and are based on traditional financial institutions. The issuer of Dai can participate, and the assets are excess encrypted assets (currently Ethereum). In addition, Dai has more features and can be used for leverage trading, forecasting market betting, and all scenarios where Ethereum requires stable coins. For Dai's price volatility, the main mechanism is over-collateralization, as well as market arbitrage and interest rate adjustments at the time of anchorage to control supply.
Question 4: Can you use MakerDAO's dual currency model and Dai and MKR in the Maker ecosystem?
Pan Chao: Dai is a stable currency, and MKR is a system of equity tokens (capture interest and participation management).
Reference article: https://mp.weixin.qq.com/s/vEiGd_QRjoVNBTWXzSwmWQ
Question 5: Will the use of dai's interest be reduced to someone?
Pan Chao: Dai's interest is already decreasing.
Details can be viewed: https://mp.weixin.qq.com/s/zFc6ot7irobmEoAJ2gHiew
Question 6: What is the impact of the cryptocurrency as a collateral on the DeFi system in the short term? How to control the wind?
Pan Chao: Last year, Ethereum fell 90% of its value, but Dai's price has remained stable at $1. It relies on 150% of the safety clearing line and risk parameters such as the debt ceiling. In general, controlling the risk of collateral requires diversification of assets, introducing not only cryptocurrencies, but also synthetic products of traditional assets (gold, bonds, etc.).
Question 7: As a DeFi project, MakerDao is not a centralized custodian, but the source of currency information is semi-centralized. Can you explain how you get price information?
Pan Chao: The price of the currency is selected by a number of distributed oracles, and the median price of 13 exchanges is selected to ensure the accuracy of the price. There is currently no fully decentralized price information solution. MakerDAO's approach is currently the safest way.
Detailed can be viewed: https://developer.makerdao.com/feeds/
Question 8: As a project that calls itself a DAO organization, MakerDAO votes to govern the community through MKR tokens, including determining adjustments to stable rates. However, we have not seen the distribution of MKR every time, and the Foundation does not have clear MKR locks and usage details. How to explain the outside question, MKR governance is a game controlled by the Whale and the Project Foundation?
Pan Chao: The Foundation does not participate in the voting. The MKR address of the Foundation is also open. Anyone can audit: https://etherscan.io/token/0x9f8f72aa9304c8b593d555f12ef6589cc3a579a2?a=0x8ee7d9235e01e6b42345120b5d270bdb763624c7
Every time we vote, we publish the results on Reddit, and all voting distributions are transparently visible on the blockchain: https://www.reddit.com/r/mkrgov
For the centralization issue that may arise in voting, we also discuss it at the weekly video governance conference, and everyone can participate. We see the continuous increase and distribution of voting participation in MKR governance. This is also a feature of MKR design. Participants will continue to change, and those who are most concerned about the long-term health of the Maker system will join.
Of course, Maker is trying to make an unprecedented attempt, and this process is constantly trying to correct and correct. The current governance plan must not be the ultimate optimal form, and your feedback and constructive comments are welcome.
Third, about imToken
imToken is the first digital asset management wallet based in Ethereum. It is a mobile light wallet that supports multi-chain, multi-currency management and redemption. Currently, imToken has been upgraded to support Cosmos and also supports the recent popular Staking.
imToken announced in 2018 that its decentralized trading platform Tokenlon will enter into a strategic partnership with DeFi Project 0x, using 0x smart contract technology to achieve seamless atomic currency conversion and officially launched the imToken 2.0 international version.
Question 1: As the earliest Ethereum wallet, I want to know how to treat DeFi to imToken? Is there any plan to launch related business?
A tree: imToken wallet as the traffic entry of the blockchain, from the popular CryptoKitties to the popular DeFi, we have a clear goal: imToken as a basic platform, providing a set of DApp interactive protocol (compatible with Metamask, Scatter), and Support and help DeFi projects to better evolve and easily interact with users through the imToken DApp SDK.
Recently, iToken's DeFi project, you can learn about the built-in decentralized transaction Tokenlon and Cosmos Staking DApp. Question 2: In which aspect is the cooperation between imToken and 0x? As a wallet, what DeFi services can I launch?
A-tree: The cooperation between imToken and 0x is mainly reflected in decentralized trading applications, such as our built-in currency exchange project Tokenlon. (Recently launched two weeks, ranking the top five in DEX, the transaction volume exceeded 2.47 million US dollars)
As a wallet, we recently launched the Cosmos Staking service in addition to decentralized trading (with a 1/3 of the entire network of consignors, contributing 240W ATOM in the past month, helping partners to upgrade from 14 > 7) ) Question 3: Will the next work focus of imToken be placed on that piece? What is the strategic plan?
Ashu: We hope to help users to secure their digital assets in a safer, more convenient way. It is mainly divided into three parts:
1. DeFi layout: Tokenlon (0x-based decentralized currency exchange function), users can directly exchange the required tokens in imToken, online around, in the transaction volume and user volume has stabilized in the top five in DEX; at the same time in DApp The browser supports the most popular DeFI projects in the community, and of course we have priority support for good projects like Maker;
2, Staking service: At present we support Cosmos, it can be said that Cosmos's one-stop wallet, now we include redemption, management, pledge, will soon go online voting function;
3, the wallet security ecology exploration: In addition to its own mobile wallet, imToken investment in the incubation of the hardware wallet imKey is also in the sale. As the first hardware wallet that supports imToken, the private key is stored offline to better protect your assets.