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Dorothy, head of Synthetix Greater China, and Nigel, head of Perpetual Protocol China, shared the main obstacles to the development of decentralized derivatives and the design of AMM mechanism.
Original title: “Dialogue between Synthetix and Perpetual: Structured and aggregated products may be the future of the derivatives track”
Finishing: Chain Catcher
Recently, the 23rd issue of the Catcher Academy hosted by Chain Catcher invited Dorothy, the head of Synthetix Greater China, and Nigel, the head of Perpetual Protocol China, to conduct “Why Derivatives Will Be the Most Potential DeFi Track This Year” Topic sharing.
During the period, Dorothy and Nigel shared with the community users the main obstacles to the development of decentralized derivatives, the problems and solutions of AMM mechanism design, and the risks that ordinary people need to pay attention to when participating in DeFi derivatives mining, etc. Dry goods, the full text is now organized as follows, hoping to inspire readers.
Chain catcher: Please briefly introduce the positioning of Synthetix and Perpetual, and the specific exploration and advantages in the DeFi field.
Dorothy: Synthetix is a decentralized synthetic asset (Synths) protocol built on Ethereum. Users can stake our token SNX to mint the stable currency sUSD, or directly purchase sUSD to perform digital transactions on our platform. Trading of synthetic assets such as currency, foreign exchange, stocks, commodities, indices and reverse assets.
In the world of blockchain, we do not have an effective way to directly trade traditional assets such as stocks. Therefore, we need to synthesize virtual assets on the chain for trading by anchoring the price of traditional assets.
To put it simply, synthetic assets are mirrored simulations of target assets, such as sUSD against USD price, sGold against gold price, sTSLA against Tesla stock price, and sDeFi against DeFi index. By mapping real-world assets, everything is Can be traded on the chain.
Synthetix was established in 2017. It is the first project in the industry to try a decentralized synthetic asset issuance and transaction mechanism. It has the advantages of no slippage, unlimited liquidity, and a rich asset portfolio. It is one of the top projects in the DeFi world.
Next, we will deploy the protocol on Optimism’s Layer 2 network and launch V3 upgrades, including futures functions.
Nigel: Perptual Protocol, as its name suggests, is a vAMM-based derivative agreement on the chain. The current main product is a perpetual contract.
We are the first project to sell token LBP on Balancer. After more than half a year, it has now become a more mainstream IDO method. In addition, our mechanism is vAMM, which is also the first protocol to introduce AMM to derivatives trading. This innovation has also made many DeFi enthusiasts pay close attention to us.
In terms of advantages, I think it is a little preemptive, because the market wants to find a low-cost and relatively large number of user transactions on the chain perpetual contract trading platform except Perpetual. In addition, we have developed on xDai, so the cost is relatively low, and the user experience is much better than that of the first-level network.
Chain catcher: The popularity of DeFi has lasted for almost a year, and the products in all sectors have matured, especially the derivatives track. Many investment institutions are in the layout. As an early participant, do you think the current DeFi derivatives track is right? At what stage of development?
Dorothy: First share the definition of the concept of derivatives. A derivative is a financial contract whose value depends on one or more underlying assets or indexes, including forwards, futures, and swaps. And options (Option) and other forms, can be standardized or non-standard, the main purpose is hedging, speculation and arbitrage.
In the field of digital assets, futures are linear contracts with relatively simple products that have achieved explosive growth in the previous year; while options are very complex derivatives with high thresholds. It was not until last year that more institutions entered the market. Exponential growth.
The early leading centralized futures exchanges include BitMEX and OKEx. Recently, Binance, Huobi and FTX have caught up in trading volume and become the new leader. For traditional compliance agencies, CME is the only one. The choice; in the more immature options track, deribit has long thrived.
On the decentralized track, Synthetix is the leader in synthetic assets. We support spot trading of synthetic assets and reverse synthetic assets, as well as binary options trading, and will also support futures trading after Layer 2 is launched.
Among the decentralized exchanges that specialize in futures, dYdX is the oldest project, Perpetual Protocol, Ddx, Injective, and Mcdex are all rising stars that emerged last year, and Hegic and Opyn are emerging projects in the options track.
The derivatives track is still at a fairly early stage, and the trading volume is still very small compared to centralized exchanges. There are more entrepreneurial projects on the futures track, but there is not a clear head project that has run out. The options track is more difficult to promote and popularize because of the complexity of the options themselves.
Nigel: Comparing the ten-fold difference between derivatives and spot transactions on a centralized system, I think the explosion of DeFi derivatives is far from coming. Perpetual agreements are considered derivatives that are running out of scale, but every day The transaction volume of Uniswap is only 50-60 million, and Uniswap’s recent transaction volume is more than 1 billion U.S. dollars.
Over and over, the transaction magnitude of on-chain derivatives is at least a hundred times different from that of centralized derivatives. So we can’t even name the current stage with a name that can be found. I made up a name myself called the cocoon period. In this period, the whole track is added together to try and make mistakes, fail, and waste. Don’t be afraid to trap yourself, you need encouragement for a while.
Chain catcher: In the traditional financial sector, the volume of derivatives is much higher than the spot volume, but in the DeFi sector, the volume of derivatives trading still accounts for a very low proportion of the entire trading volume of crypto assets. Under the benchmark, many practitioners believe that decentralized derivatives still have a lot of room for development. What do you think is the potential market space for decentralized derivatives? What are the main obstacles to development at present?
Nigel: I think it is at least a hundred times more space. The current obstacles mainly come from the following points:
There are still too few DeFi users. Most of the currently educated DeFi retail users come to participate in mining to earn profits, or because of the better liquidity and depth of DEX to trade on the chain, they do not have the habit of using derivatives.
The solution to the previous problem is that the project needs to keep attracting users. However, users who are attracted find that the network is expensive and slow, and more importantly, the depth of derivatives on the chain is not good. Therefore, the second obstacle is insufficient infrastructure and insufficient product strength.
Dorothy: We can look at a set of data. In the traditional financial market, the total market value of stocks is 70 trillion U.S. dollars, the bond market has a larger market value of 130 trillion U.S. dollars, and the market value of the derivatives market is more than all of them combined. It has reached 1,000 trillion U.S. dollars. It can be seen that the derivatives market is not an order of magnitude worse than the underlying market of underlying assets.
In contrast, on the centralized exchanges of our industry, the trading volume of digital asset derivatives is only three times that of the spot market. We can expect that in two to three years, the derivatives market will grow further, leaving the spot market far behind. Reached 10 times the size of the spot market.
While the centralized market has yet to break through, the decentralized derivatives market is still in a very early stage, and it is more for DeFi “farmers” and experts who entered the market early, and cannot accommodate large financial institutions for transactions.
I think the current main obstacles come from three aspects. The first is the problem of market education. Many derivatives users are used to trading on centralized exchanges and are not familiar with or even trust DeFi products. Especially under extreme market conditions, the top centralized transactions such as Binance have stronger solvency, while decentralized exchanges can only rely on the cash retained by insurance funds and foundations, and the solvency is doubtful.
The second is the issue of transaction costs. Derivatives exchanges themselves are much more complicated in smart contract design than Uniswap and other spot exchanges. In addition, derivatives traders trade more frequently and are more sensitive to execution prices and transaction fees. , The overall experience will be affected. At present, many products on Ethereum are restricted by the Ethereum network, and face the problems of high network handling fees, delayed oracle price feeds, high costs, and serious transaction price slippage.
The last and most critical issue of liquidity. Centralized exchanges complete the matching through the order book, and users and users are rivals. If there is no market maker, it is difficult to efficiently match orders based on the liquidity provided by the users’ own fragmented trading needs. On the decentralized exchange, the efficiency of the chain is low, and it is difficult for market makers to control transaction costs and cannot effectively provide liquidity, and it is difficult for users to complete transactions at ideal prices.
In order to solve the liquidity problem, Synthetix created a debt pool method, through which users pledged funds to generate a debt pool as counterparty, to achieve no slippage and unlimited liquidity transactions, and Perpetual Protocol’s vAMM (automated market making curve) mechanism It seems to quote a similar concept of pledge pool.
Chain Catcher: What do you think is required for decentralized derivatives on DeFi to reach the volume of the derivatives market on CEX? And what’s the tipping point?
Nigel: The first is the infrastructure, including network performance, network costs, etc., and the second is that the frequency of people’s behavior on the chain needs to be increased by an order of magnitude during the development stage of the industry. Of course, this depends on the above conditions. The third is the layering of products. Outstanding is not a spring. A hundred schools of thought are contending for DeFi. Someone must target big whales, some serve retail users, some target long-term agreements, some target perpetual contracts, and there are enough in each category. People and teams try and make mistakes.
The tipping point is that I think the market for Fomo is relatively easy, and the hot spots take turns. After Layer 2 comes out, everyone takes it for granted that there may be no problem, and then stirs up a wave. But I think the real detonation is to make a thing become accustomed, such as Uniswap, Synthetix, including the head DeFi protocol. Therefore, although the perpetual agreement is a member of this track, I am not optimistic that derivatives will be detonated in the short term.
Dorothy: I think Ethereum L2 (Layer 2 network) will be an important explosion opportunity for derivative DEX, both in terms of currency price and practicality. For example, dYdX has chosen to cooperate with StarkWare, which supports ZkRollup technology, and has launched the L2 version.
Together with Uniswap and Chainlink, Synthetix is an early support project of the Optimism network. It is expected that the L2 trading function will be launched this month. Network fees are now a major issue that restricts all ecological projects in Ethereum. On the second-tier network, transactions can reduce network fees by at least 90%, meet faster transaction times, and effectively reduce slippage problems.
But I don’t think that the trading volume of DEX derivatives can catch up with CEX in the short term. Even on the second-tier network, decentralized exchanges still have a gap with centralized trading in terms of user experience and transaction fees. Of course, the relative success of decentralized exchanges can force centralized exchanges to improve problems such as pin insertion, downtime, and position penetration. Centralized exchanges can further educate the market and expand user groups, which can bring more fresh blood to decentralized exchanges.
Chain catcher: Judging from the experience of traditional finance and even centralized exchanges, derivatives are still a problem in terms of customer acquisition. What do you think is the key to on-chain derivatives exchanges to attract users? What risks should ordinary people pay attention to when participating in DeFi derivatives mining?
Dorothy: Centralized exchanges generally attract market makers to provide liquidity through commission rebates, and provide ordinary users with discounts on transaction fees through the VIP level system. The most common way for decentralized exchanges is to provide Liquidity mining.
Synthetix uses a form of pledged mining. In order to encourage users to use our platform for pledges and transactions, we launched an inflationary monetary policy in April 2019. The policy stipulates that within 5 years, a certain percentage of SNX tokens will be issued each year, year by year. Decreasing, the initial inflation rate was 75%, and this year’s inflation rate is roughly 29%.
Users can stake our token SNX to mint stablecoin sUSD. The pledge rate on the Ethereum Layer1 network needs to be maintained at 500%, which is equivalent to 5 USD worth of SNX minting 1 USD worth of sUSD; when the pledge rate is less than 500 %, the user needs to burn the sUSD held to increase the pledge rate and restore it to the level of 500%.
On the deployed Layer 2 network (currently only supports pledge casting and receiving pledge reward functions), the pledge rate for maintaining positions is 600%.
When the staking rate drops to 200%, users will have 3 days to cover up their positions, and increase the staking rate by burning sUSD. If the user fails to complete the cover up within the 3-day validity period, then the staking rate is less than 500% (the second layer network is 600%) will be liquidated, returning the pledge rate to 500%. Such a mechanism gives users a sufficient buffer period to avoid the risk of forced liquidation on the chain and protect their positions.
There are also platforms that adopt a transaction mining model, just like MCDEX. Because perpetual contracts are directional transactions, the platform provides users with automatic hedging tools, and users need to rebalance (rebalance) regularly.
In general, to participate in derivatives DeFi mining, you need to check in advance the security of the platform’s smart contracts (such as whether the security audit is passed, whether there is a back door) and the reliability of the platform’s qualifications (such as team background, institutional endorsement). Most mining operations have impermanent losses or liquidation risks. Users must study the operating rules of the platform and put risk management in the first place.
Nigel: I think the most important thing is the maturity of the product. The reason why OK can occupy the leading position in the delivery of futures contracts is that the product is strong enough. In the same 18 years, the sudden emergence of BitMex also carried forward the perpetual contract. Under the conditions of maturity of all infrastructures, use innovative awareness and endure the time that no one pays attention to to polish on-chain derivatives that are truly product-powerful.
I think that the security risk should be paid attention to in DeFi derivatives mining. After all, the opportunity is not a scarce product, but the principal is. Most of the mining itself is the project party’s demand for liquidity, thus using token benefits to drive users to inject liquidity. I think the profit-seeking is naturally correct. After all, no one can avoid being vulgar in the market, but if everyone is willing to spend a little time thinking about the value of the agreement and the value provided by liquidity, think about it before doing it, and it may be boring to make money. Get a little spiritual satisfaction outside.
Chain catcher: We all know that the emergence of AMM is very important to the development of DeFi, but in the past period of time about AMM’s impermanent loss and capital utilization rate has been the industry’s attention. Can you start from these two issues and analyze derivative products? Problems in the design of the AMM mechanism and possible solutions?
Dorothy: The traditional AMM mechanism uses the formula of xy=k. This constant product formula has the disadvantages of low capital efficiency and high transaction slippage. Market makers who provide liquidity to the trading pool often suffer impermanence losses due to this.
As far as I know, most futures exchanges on the market still adopt the order book model. For example, dydx and ddx apply the model of off-chain matching and on-chain settlement. The disadvantage of this model is the high degree of centralization. The core parameters of perpetual contracts rely on off-chain facilities. When the order book fails, the on-chain funding rate cannot be updated. In addition, other smart contracts cannot interact with the off-chain order book to build other structured products.
Synthetix plans to launch futures products with 10 times leverage after Layer 2 is officially launched, following the debt pool model of spot trading.
First, explain the concept of fund rate. When the futures contract (Futures) of the traditional financial market is delivered on the expiry date, the price will naturally converge with the spot price. It was invented by BitMEX and used by most exchanges. Perpetual swap) does not have a delivery date, so we need to adjust the price through the capital rate, and the dominant party (in the opposite direction) will subsidize the other party to achieve the purpose of returning the contract price to the spot price.
On Synthetix, the price of our synthetic assets is directly generated by the Chainlink oracle machine, and there is no decoupling of the contract price and the spot price. On the contrary, we have to adjust the funding rate to affect the market slope and reduce the risk of the debt pool.
On other trading platforms, every buy order must be completed by the corresponding sell order. In fact, the market will never tilt, and the number of contracts traded between long and short sides will always be balanced.
But in Synthetix, every contract transaction does not require a counterparty, but a sUSD debt pool generated by pledging SNX tokens for users. Here we need to explain the concept of floating debt pools.
All SNX holders will generate a “debt” when they mortgage. At the beginning, the debt is the amount of sUSD they initially minted. After that, the debt will fluctuate with the income of other synthetic asset holders on the platform.
When someone buys other synthetic assets such as sBTC with minted sUSD, and sBTC increases in value, then that person will outperform the market, the debt pool of the entire market will increase, and this person’s income will be added to all participating pledges in proportion Debts of SNX holders. Each holder must repay all sUSD debts in order to unlock and retrieve the pledged SNX (in this case, the final debts of other debtors are higher than the amount of sUSD at the initial minting).
When a user exchanges sUSD for sBTC, sBTC is essentially generated out of thin air, and no one sells it. After the transaction is completed, the system will automatically destroy sUSD and create sBTC for users. The total amount of sBTC in the entire market increases, and the total debt of all SNX holders also increases. It is this zero-sum game mechanism that provides unlimited liquidity for the market.
Now we look at the application of debt pools in the futures market.
Assuming that in the unilateral market, 90% of trading users are bullish, and then the spot price does rise, then the users participating in the pledge must repay higher debts, so the bulls have to pay a higher funding rate than other platforms. To attract more empty orders and reduce the risk of staking users.
Assuming that the total value of long orders on the entire platform is $100,000 and the total value of short orders is $10,000, then in this case, the short will receive a funding fee of $10,000, and the additional funding of $90,000 will be paid to Pledge users. The purpose of this design is to keep the market from leaning toward long or short positions, and to maintain neutrality, so as to reduce the debt risk faced by pledged users. In summary, it is to use the funds provided by the pledge user to act as the counterparty of the transaction user.
Nigel: I have observed that there are several ways to eliminate impermanent losses with AMM Based products:
The first type, ThorChain, the conscience project party, centralizes to help users solve the impermanence loss of Cover and Rune-related trading pairs.
The second is to innovate the AMM mechanism, such as DODO’s PMM, or simply like us, Perpetual Protocol has no real liquidity, and virtual liquidity in the AMM pool. After users deposit assets, they do not essentially enter the liquidity pool, but are individually sealed up for clearing and settlement. According to the user-set leverage multiple mint, the corresponding amount of vUSDC enters the virtual liquidity pool. The advantage is that users can get good transaction depth without anyone providing liquidity.
The third is our future solution. This solution is not for our own AMM, but minimizes the integration of Perpetual Protocol into the AMM Based DEX, which is convenient for users to hedge against the impermanent losses caused by liquidity with one-click.
Having said that, I want to extend this topic, that is, derivatives need loyalty that does not depend on liquidity. The loyalty of liquidity is very low. They are profit-seeking. For derivatives, which is currently not so profitable, how to avoid the loyalty risk of liquidity.
I think Synthetix is a very good way of synthesizing assets, a token that produces two, three, and all things. The transaction objects and assets on the platform come from the origin of SNX. The mechanism is very good, including the MIR that performed well in the past six months. Another way to avoid the risk of liquidity loyalty is to use virtual liquidity to provide services to users. The pressure on users and project parties will be less, and there is no need to rely on liquidity providers. You can keep liquidity while pleasing users.
Chain catcher: As a well-known synthetic asset protocol on the Ethereum platform, Synthetix plays a very important role in the field of DeFi derivatives. PERP also adopts the new mechanism of vAMM. Can you talk about the problems in traditional financial derivatives? A better solution through decentralized derivatives? What are the more anticipated application extensions in the future?
Nigel: I think from the user’s point of view, it is permissionless. Traditional derivatives have strict requirements on investors due to their high leverage ratio and high volatility. In other words, it is the strict review, market fragmentation, and the limitation of the distance between time and physical space. On the chain, in the decentralized world, it may not exist anymore, 24×7 hours trading, no KYC, the experience is wonderful.
I still hope that the Lego attributes of DeFi can be presented in derivatives, so that our lone derivatives can have better composability and empower the DeFi world.
Dorothy: In the traditional financial market, the markets of different countries and different types of assets are often fragmented, and the market access barriers are also high. The Synthetix platform can provide users around the world with no identity restrictions, no thresholds, no review, and one stop. The 24-hour trading of spot, futures and binary options of digital currencies, foreign exchange, stocks, commodities, indices, and reverse assets provides great convenience for users to conduct cross-asset, cross-market, and cross-position transaction management. . For example, one day crude oil plummets and the U.S. dollar is depreciating again, then you can exchange your assets for Bitcoin as a hedge.
Another major advantage of decentralized protocols is community autonomy. Users can vote for the types of assets they want to trade on the platform, adjust the currency composition in the index, and make other important decisions, which is unimaginable in the traditional market.
Non-custodial, no threshold, and anti-censorship are the biggest advantages of decentralized protocols. The DeFi agreement can subvert the existing financial system and become a true “digital bank”, providing an inclusive financial portal for billions of people around the world, especially the new generation of digital natives.
Chain catcher: Derivatives track products are relatively diversified, including options, futures, prediction markets, synthetic assets, etc. Once the problem of Ethereum’s expansion is solved, how will these subdivisions be combined? At the same time, what kind of competitive landscape will give birth to the DeFi track?
Nigel: Once the expansion schemes are excellent, users and agreements are concentrated on one or two expansion schemes, and the limitation of infrastructure performance on the product is lifted. I think that in the end, there may be a relatively large platform that will cover all the agreements on the various product categories of the derivatives track.
There are two possibilities. One is to add functions to the protocol with platform potential, and to integrate each company’s strengths into a platform with protocol matrix interoperability.
The second possibility is that in the future, there will be a relatively macro-oriented middleware platform that encapsulates the necessary infrastructure, attracts various types of derivatives, and eventually becomes an ecological platform. This is what I think is the future combination. Simply put, the agreement will not be isolated. Based on this platform, the composability just mentioned with the current mainstream DeFi protocol will also be easier to implement because of the convenience of mutual calls.
Dorothy: The largest transaction volume in the current DeFi market still comes from native digital assets, but the volume of the traditional asset market is a thousand or ten thousand times that of the entire digital asset market. Therefore, on-chain synthetic assets that mirror real-world assets will become digital assets in the future. There will be huge room for growth in the mainstreaming wave.
What we are currently doing is to combine synthetic assets with various derivatives such as futures and options to provide users with a variety of trading tools.
In addition, I am also very optimistic about structured products that take advantage of the composability of smart contracts. In fact, in the DeFi world, it is not users who use a certain smart contract agreement most, but other smart contracts. At present, the structure of derivatives on the chain is relatively simple, and most of the income of aggregators like YFI comes from mining on Curve. As the industry’s infrastructure matures, more teams will take advantage of the composability of financial Lego and combine different options and futures contracts to launch an on-chain structured structure with higher returns and richer types than existing agreements such as YFI. product.
Source link: www.chaincatcher.com
Valour Structured products has seen a 688.35% percent growth in its Bitcoin Zero product since end of December 2020 to over $50M AUM in March 2021
TORONTO, March 23, 2021 (GLOBE NEWSWIRE) — DeFi Technologies Inc. (the “Company” or “DeFi Technologies”) (NEO: DEFI, GR: RMJR) is pleased to announce it has entered into a binding Letter of Intent (“LOI”) to acquire a 80% equity interest in Valour Structured Products, Inc. (“Valour”) from certain shareholders of Valour (“Acquisition”). The Company currently holds a 20% interest in Valour and following the Acquisition, Valour will become a wholly owned subsidiary of DeFi Technologies.
The LOI contemplates that DeFi Technologies and Valour will promptly negotiate and enter into a definitive agreement (“Definitive Agreement”), together with such other documents that may be required in order to formalize and execute the terms of the Acquisition as outlined in the LOI.
Valour Highlights:
- Bitcoin Zero started trading on December 3rd, 2020 on the Nordic Growth Market in Stockholm, Sweden.
- In the month of December 2020, Bitcoin Zero was in the top 3 most traded Exchange Traded Products on the exchange.
- Valour ended the 2020 fiscal year with US$6.9 million in assets under management. It currently has US$47,496,000 in assets under management as of March, 22, 2021.
- Valour intends to list additional products on Boerse, Stuttgart, SIX Stock Exchange and Berne Bourse in Q2 2021.
- Launch of Ethereum Zero and subsequent digital asset products planned for March 2021.
- Valour was Co-Founded by Johan Wattenstrom, Founder & Director of Nortide Capital AG. Mr. Wattenstrom was also the founder of XBT Provider, the first synthetic exchange traded product ever launched for BTC in 2015 which currently has 4 billion in assets under management.
In consideration for the Acquisition, DeFi Technologies shall, upon closing of the Acquisition, issue 36,934,315 common shares of the Company at a deemed price of C$2.05 per common share to the shareholders of Valour in exchange for 80% of the common shares in the capital of Valour. Additional information in connection with the Acquisition will be provided by the Company in subsequent press releases.
The completion of the Acquisition is subject to the receipt of all necessary approvals, including without limitation, negotiation and execution of a Definitive Agreement, shareholder and board approval of each of Valour and the Company, as necessary, completion of due diligence and the satisfaction of all conditions (unless waived in writing) to be set out in the Definitive Agreement.
Founded in 2018, Valour Structured Products, Inc. is a company focused on creating exchange traded products in the digital asset space. Following the completion of a seed financing led by leading cryptocurrency investors in 2018, Valour has undertaken regulatory applications required and has received approval to be an issuer of digital asset products on leading European stock markets. Its first product launched was Bitcoin Zero. Bitcoin Zero is the first fully hedged, passive investment product with Bitcoin (“BTC”) as its underlying asset and charges zero management fees. Further highlights on the company’s progress to date:
In March of 2021, Valour appointed Diana Biggs as CEO. Diana was previously Global Head of Innovation for HSBC Private Banking, where she led the testing and development of new business models, fintech partnerships and use of emerging technologies. In addition to her role at Valour, Diana is an Associate Fellow with Said Business School, University of Oxford, and Head Tutor for the Oxford Blockchain Strategy Programme.
“Johan and the team pioneered exchange traded notes based on cryptocurrency assets when cryptocurrency and blockchain was in its infancy. This showed the level of forward thinking that is required to deliver long lasting shareholder value and incredible investor returns. I am extremely honoured to work with such an excellent team at Valour and will continue to work closely with the team to realize our vision of bringing decentralized finance to the public market investors,” said Wouter Witvoet, Chief Executive Officer of DeFi Technologies.
About Valour Structured Products Ltd.:
Valour Structured Products is a Cayman Island based company focused on issuing Exchange Traded Products with a focus on Digital Assets. The company also owns 100 percent of Catena Fin AG, a Zug, Switzerland based trading desk.
About DeFi Technologies:
DeFi Technologies Inc. is a Canadian company that carries on business with the objective of enhancing shareholder value through building and managing assets in the decentralized finance sector.
For further information, please contact:
Investor Relations
Dave Gentry
RedChip Companies Inc.
1-800-RED-CHIP (733-2447)
407-491-4498
Dave@redchip.com
Public Relations
Veronica Welch
VEW Media
ronnie@vewpr.com
Cautionary note regarding forward-looking information:
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the Acquisition; the terms of such transaction; the Valour business and products; the pursuit by DeFi Technologies of business opportunities; and the merits or potential returns of any such investments. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, as the case may be, to be materially different from those expressed or implied by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
THE NEO STOCK EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Ribbon Finance combines different DeFi derivatives to achieve specific risk goals.
Written by: a poplar tree
In the past 2020, we have witnessed incredible DeFi innovation and experienced the explosive growth of the DeFi world. In particular, the DeFi development level covering decentralized transactions, lending, options, fixed income, algorithmic stablecoins, synthetic assets, etc., has become more and more diversified, almost following the pattern of traditional mainstream finance. .
These continuously innovative and iterative DeFi protocols have also created diversified new profit possibilities for ordinary people-lending assets, providing liquidity to automated market makers, casting synthetic assets, and so on.
The “Lego” attribute of DeFi is naturally suitable for constructing structured products that combine different protocols to achieve specific risk goals.
What is a structured product?
Structured products are essentially a combination of financial derivatives. It usually combines a series of derivatives to construct a “combined product” that achieves specific risk goals.
Its advantages are obvious, because although there are a wealth of derivatives tools that can play a combination advantage in trading, there are only a few experienced traders after all, and most people do not know how to incorporate derivatives into their overall portfolio strategy to improve Risk return, this is where structured products come in:
Packing multiple derivative products into one product, anyone can buy it without worrying about the complexity of the structure, in a broad sense, it can be understood as all financial products tailored to customers.
But this also brings a series of problems-extremely opaque, brokers may not be able to honor payments, investment channels are greatly restricted due to geographic location, and only high-net-worth individuals or financial institutions can use it.
What is Ribbon Finance?
This is exactly the vision of Ribbon Finance as an encrypted structured product-removing investment thresholds, bringing new variables to the structured product market, so that any investor with a Metamask wallet can easily participate in investing in structured products.
Because of this, Ribbon Finance chose to focus on creating encrypted structured products on DeFi, and by building new DeFi products that can be combined through cross-DeFi agreements, to help DeFi users obtain a higher risk-reward ratio.
Ribbon currently includes four major product categories, including betting on volatility, increasing returns, principal protection, and compound interest. Each category has a series of specific products to provide users with different risk-return goals with differentiated services.
- Betting on volatility: Allow users to trade various crypto asset volatility products for speculative or hedging purposes
- Increase revenue: through the combination of different rate of return tools (with revenue options), allowing users to earn high-yield active and passive products
- Principal protection: investment products to ensure that users will recover their principal, plus potential upside advantages. They can be constructed through a combination of fixed income products and options
- Compound interest: A product that allows users to gradually and stably accumulate their favorite assets through strategies such as automatically selling put options and reinvesting the proceeds in accumulating more assets
The founder of Ribbon Finance is Julian Koh, a former Coinbase software engineer. LinkedIn personal information shows that Julian Koh worked at Coinbase from May 2019 to October 2020. In 2018, he served as a consultant for the cryptocurrency hedge fund MetaStable Capital.
How does Ribbon Finance achieve its goals?
Take the product of betting on volatility-Strangle option as an example. This is also Ribbon’s first product. It allows users to bet on the volatility of ETH for profit by combining put options and call options with different execution prices.
In order to build this combined product, Ribbon simultaneously obtains liquidity from the two major option agreements on Ethereum, Hegic and Opyn.
First, Ribbon will find the cheapest price for option buyers and sellers from Hegic and Opyn, and then purchase options on behalf of users and package them into smart contracts to build a portfolio of products that bet on ETH volatility.
At present, there are two contract options for Strangle options based on the expiration date-March 12 and March 16, corresponding to different contract costs and return profits.
However, the more frequent and greater the price fluctuation of ETH during the contract period, the more profit. This is also the first multi-protocol structured product betting on volatility on Ethereum.
The three product areas of revenue enhancement, principal protection and compound interest are currently under development and are expected to be launched later. The official has also confirmed that there are two main directions to proceed:
- Continuous integration with other on-chain option protocols to obtain better prices for users and create more complex products;
- Develop a permanent structured product that earns income on ETH by selling options;
It is important to note that as of now, Ribbon Finance has not issued its own tokens, and tokens of the same name appearing on chains such as BSC need to pay special attention to risks.
How big is the imagination of encrypted structured products?
In the traditional financial world, structured products are generally based on fixed-income investments, coupled with a combination of financial derivatives. Usually the financial assets that can be linked to derivatives include stocks, bonds, interest rates, foreign exchange, Various indexes, bulks, funds, etc. (commonly such as ABS, structured wealth management, structured deposits, etc.) have developed rapidly in recent years and have become powerful tools for asset management because they closely follow the individual needs of investors.
In the crypto market, there is also a “structured product” model that has been practiced for a long time-digital asset dual currency wealth management products, as a floating return non-guaranteed investment product, characterized by “one investment, two returns” .
Take the BTC standard as an example
The investor purchased a 10-day “BTC-USD dual currency wealth management” product on March 1. Assuming that the BTC quoted at US$49,200 on that day, other relevant parameters are as follows:
- Linked price: $49,400
- Expiry date: March 11
- Investment amount: 1 BTC
- Yield: 3%
At the expiry date of March 11, there will be two possible settlement methods:
- If the settlement price of BTC is lower than the pegged price of 49,400 US dollars, the settlement will be done in BTC. The settlement amount = (1 + yield) * purchase quantity = (1 + 3%) * 1 = 1.03 BTC.
- If the settlement price of BTC is higher than or equal to the pegged price of 49,400 US dollars, the settlement will be done in USD, and the settlement amount = (1 + yield) * pegged price = (1 + 3%) * 49400 = 508825 USD.
Take the USD standard as an example
The investor bought an 11-day “USD-BTC dual currency wealth management” product on March 1. Assuming that the BTC quoted at US$49,200 on that day, other relevant parameters are as follows:
- Linked price: US$49,000
- Expiry date: March 11
- Investment amount: US$49,200
- Yield: 3%
At the expiry date of March 11, there will also be two possible settlement methods:
- If the settlement price of USD-BTC is lower than or equal to the pegged price of 49,000 USD, investors will settle in BTC. Settlement amount = purchase quantity / pegged price*(1+3%)=49200/19,000*(1+3%) )=1.0408 BTC.
- If the settlement price of USD-BTC is higher than the linked price of 19,000 USD, investors will settle in USD. The settlement amount = (1 + yield) * linked price = (1 + 3%) * 49000 = 50470USD.
In a nutshell, although the BTC-USD settlement price will change on the expiry date, investors will always get a 3% definite return. The only uncertainty is the type of funds returned (BTC or USD).
I believe everyone has discovered that the hedging and risk hedging characteristics of similar options above are more suitable for constructing diversified structured financial products than the “fixed income + derivatives” in traditional finance.
In the crypto world, with the help of smart contracts, liquidity can be obtained from various on-chain derivatives agreements (including option products such as Hegic), and they can be combined freely and efficiently to achieve certain specific risk goals. At the same time, 100% transparency is maintained at all times.
Especially when different track DeFi protocols are combined like Lego-when a variety of DeFi financial instruments (options, fixed income, futures, etc.) are combined, driven by automated algorithms, the value of the entire blockchain network will be more rapid The way is flowing, and the evolution based on various financial innovations will happen like a chemical reaction, thereby providing users with more powerful structured products to increase returns or reduce risks.
This is where the charm and imagination of encrypted structured products lie.
Disclaimer: As a blockchain information platform, the articles published on this site only represent the author’s personal views, and have nothing to do with the position of ChainNews. The information, opinions, etc. in the article are for reference only, and are not intended as or regarded as actual investment advice.
Valour Structured Products Announces New CEO, 336 Percent Increase in Valour’s AUM & Corporate Update on Activities
TORONTO, Feb. 12, 2021 (GLOBE NEWSWIRE) — Routemaster Capital Inc. (the “Company” or “Routemaster”) (NEO: DEFI GR: RMJR) is pleased to announce that it has closed the transaction to acquire 20% of Valour Structured Products (“Valour”), first announced on January 4, 2021 (the “Transaction”). Please see the Company`s press release dated January 4, 2021 for additional information on Valour.
Pursuant to the Transaction, Routemaster issued a total of 21,000,000 common shares of the Company to the shareholders of Valour in proportion to their pro rata shareholdings of Valour, in exchange for a 20% interest in Valour. No finder fees were paid connection with, and no change of control of Routemaster resulted from the transaction.
Valour Structured Products appoints Diana Biggs, previously Global Head of Innovation at HSBC Private Banking, as CEO
Diana Biggs has been appointed as CEO of Valour Structured Products to commence operational duties effective immediately. A seasoned executive in technology and financial services, she was previously Global Head of Innovation for HSBC Private Banking, where she led the testing and development of new business models, fintech partnerships and use of emerging technologies. In addition to her role at Valour, Diana is an Associate Fellow with Said Business School, University of Oxford, and Head Tutor for the Oxford Blockchain Strategy Programme.
“I am thrilled to be joining Valour and the Routemaster Capital team to finalise our initial strategic acquisition and collaborate on the development of structured products in the DeFi ecosystem,” commented Diana Biggs on the completion of the transaction. “The demand for secure, digital structured products is at an all-time high and I look forward to developing innovative products alongside Routemaster.”
Valour Structured Products Corporate Update for 2021
Founded in 2018, Valour Structured Products, Inc. is a company focused on creating exchange traded products in the digital asset space. Following the completion of a seed financing led by leading cryptocurrency investors in 2018, Valour has undertaken regulatory applications required and has received approval to be an issuer of digital asset products on leading European stock markets. Valour was Co-Founded by Johan Wattenstrom, Founder & Director of Nortide Capital AG. Mr. Wattenstrom was also the founder of XBT Provider, the first synthetic exchange traded product ever launched for Bitcoin (“BTC”) in 2015 which currently has 2.9 billion in assets under management. Its first product launched was Bitcoin Zero. Bitcoin Zero is the first fully hedged, passive investment product with Bitcoin (“BTC”) as its underlying asset and charges zero management fees. Further highlights on the company’s progress to date:
- Bitcoin Zero started trading on December 3rd, 2020 on the Nordic Growth Market in Stockholm, Sweden.
- In the month of December, Bitcoin Zero was in the top 3 most traded Exchange Traded Products on the exchange.
- As of February 2021, Bitcoin Zero has been the most actively traded ETP with 5.2 million of daily turnover.
- It ended the 2020 fiscal year with 6.9 million in assets under management. In the first two months of 2021, its AUM has increased 337 percent to 30 million.
- Product intends to be listed on Boerse Stuttgart, SIX Stock Exchange and Berne Bourse in Q1 2021.
- Launch of Ethereum Zero, and subsequent digital asset products planned for Q1 2021.
“Valour will be a cornerstone asset and growth vehicle for Routemaster going forward, we are excited to develop world first DeFi ETP’s and introduce this new asset class in a regulated and transparent manner,” said Olivier Roussy Newton, Co-Founder of DeFi Holdings and an advisor to Routemaster Capital. “We are very fortunate to have such a seasoned professional such as Diana Biggs join Valour to grow the company into the future.”
About Valour Structured Products Ltd.:
Valour Structured Products is a Cayman Island based company focused on issuing Exchange Traded Products with a focus on Digital Assets. Valour also owns 100 % of Catenafin AG, a Zug, Switzerland based trading desk.
About Routemaster Capital Inc.:
Routemaster Capital Inc. is a Canadian company that carries on business with the objective of enhancing shareholder value through building and managing assets in the decentralized finance sector.
For further information, please contact:
Daniyal Baizak
President and Chief Executive Officer
Tel: +1 (416) 861-1685
Cautionary note regarding forward-looking information:
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the Transaction; the business of Valour; the growth prospects of Valour and its business; the pursuit by Routemaster and DeFi Holdings of investment opportunities; the decentralized finance industry and the merits or potential returns of any such investments. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, as the case may be, to be materially different from those expressed or implied by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
THE NEO STOCK EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Different investors have different risk preferences, and risk-graded synthetic assets are a new direction worthy of attention in the DeFi field.
Original title: “What kind of money you want to make is available here: Introduction to Lien Protocol and his non-over-collateralized stablecoin and Hakka Finance’s structured fund CSF”
Written by: Williams Lai
“I hope my cryptocurrency will make me earn 10% in a month.”
“Stupid? It’s a bull market now. I won’t be satisfied if I don’t make two or three times the money next month.”
One market, one market, there are still a hundred types of investors. The constant law is that investors in the market want to make a profit, and this is a good business.
With the explosion of liquid mining, DeFi has gradually attracted the attention of people in the blockchain circle. After the explosive growth of popular projects such as Compound and YFI, everyone has gradually reached a consensus: DeFi is a big thing ! So, a soul torture is coming. After the gold craze of liquid mining, is it possible that other decentralized applications can blow the next whirlwind in the future?
Risk-graded synthetic assets may be a new direction worthy of our attention
The concept of DeFi synthetic asset (synthetic asset) started from Synthetix, which is able to generate a combined asset of equal value from any asset. Generally speaking, synthetic asset will combine a variety of derivatives, such as combining stocks, bonds, futures behind currencies, Option and other assets.
Under the concept of synthetic assets, we can more flexibly apply more encrypted assets at hand. At present, in addition to the synthetic assets on Synthetix, I also saw synthetic assets and non-overcollateralized stablecoins proposed by Lien, as well as structured funds (Crypto Structured Fund, CSF) proposed by Hakka Finance, which all use risk classification The concept of using synthetic assets for the DeFi market to maximize the use of funds.
How does Lien generate stablecoins without overcollateralization
Lien is a basic protocol that wants to create a non-overcollateralized stablecoin based on Ether and Option products through the form of synthetic assets. It is worth noting that in the past, DAI like MakerDao minted, in order to maintain its price stability, it must have a 150% mortgage rate, which means that if I need to mint 100 US dollars, I must have a collateral worth 150 US dollars , To ensure that the fluctuation of our collateral will not affect the price stability of DAI.
However, this also means that behind all the minted DAI of more than 200 million U.S. dollars, there are at least more than 300 million U.S. dollars of ETH, USDC, BAT, WBTC and other tokens to be mortgaged (in fact, there are more). The reason for this is because for every user who generates DAI, I must bear the risk of changes in the price of the collateral myself.
However, Lien created two products based on the degree of risk aversion of different people, one is the high-risk and high-profit LBT (Liquid Bond Token) and the relatively stable asset SBT (Solid Bond Token). Then through SBT, a very stable synthetic asset, a stable currency iDOL is generated.
So, if I deposit ETH on Lien’s platform today, I will generate two different types of bonds, one is stable SBT, and the other is LBT with higher risk and higher profit. When these two types of synthetic assets are generated, we must set an expiry date of SBT and a value of k for the price of ETH at this expiry date.
So let’s use a simple example to see what will happen when the expiry date comes: Suppose that today Xiao Ming’s price of ETH is 400 usd, and his 1 ETH will be generated into LBT equivalent to $200 and the equivalent value 200 USD SBT, the maturity date of the SBT is set to one month, and the k value of the expected price is set to 440 usd. When one month later, the price of ETH becomes 500 usd, then, if Zhang San buys SBT, then his SBT will be settled at a price of 440 yuan first, and then his SBT will be able to exchange value back 200 *(440/400) = 220 usd equivalent funds; then Li Si, who bought LBT, can get 500–220 =280 usd.
However, in another situation today, if the ETH price is only 300 usd at the expiry date, then Zhang San’s SBT can also get 200*(440/400)=220 usd at this time. In the end, the four LBTs can only exchange funds equivalent to 80 usd (300-220).
In other words, when the market is good, LBT holders earn more and can achieve the effect of leverage, but when the market is not good, the impact of the currency price drop on LBT is doubled, so it is suitable for high-risk players. SBT is just the opposite, because after the expiration date, he has the priority of liquidation, so the price stability is almost certain.
At this point, we can say that the value of SBT will basically not change much. Lien Protocol uses this feature to generate stablecoin iDOL with SBT without over-collateralization. In other words, any mint doesn’t need to perform the over-collateralization required to generate DAI to deal with the past in Maker The problem of insufficient mortgage value caused by avoiding price fluctuations of the collateral is because these risks have been borne by LBT holders who are willing to take risks in Lien’s system.
iDOL usage scenario source: https://lien.finance/pdf/LienFairSwapWP_v1.pdf
In this way, LBT, SBT, and iDOL have become a tradable market. Therefore, the Lien team has also launched an exclusive exchange FairSwap to allow these synthetic assets and stablecoins to be traded. In trading and token minting In the process, Lien Protocol’s platform currency Lien Token also extracted fees from the coin minting and platform transaction fees to complete the action of value capture.
According to the Lien team, Lien Protocol will charge a 0.2% fee to users who mint iDOL stablecoins, while using FairSwap is a (0.3-variable) fee, while Lien Token holders can enjoy these processes discount.
Lien’s token usage scenario diagram source: https://medium.com/lien-finance/lien-token-metrics-f9e7bae3e407
At present, Lien Protocol is also developed by an anonymous team. The contract has been on the main network and has passed the audit of the Certik team. Lien Token is currently not in circulation except for 10% of PreSale, and Fairswap has not yet been launched before the deadline. In the future, how profitable Lien’s LBT can be in FairSwap and how iDOL is opened on various DeFi applications will determine Lien’s growth space.
The interface of Lien’s synthetic asset trading platform FairSwap
The market for synthetic assets has not yet been opened, but projects that are moving along this path have seen explosive growth this year, such as Synthetix, UMA, and Nest.
CSF: structured fund with risk classification
In the process of understanding Lien, I surprisingly discovered that Hakka Finance from Taiwan also has a very interesting product a few days ago. Crypto Structured Funds (CSF). Users with different tolerance levels can purchase investment products with different risk returns.
This is also the winning work of the Hakka Finance team in the Kyber DeFi Hackathon at the end of 2019. Simply put, a structured fund is a structured asset that combines certain assets such as ETH with interest rates and liquidation order.
The three main elements contained in the structured fund CSF are: “subject”, “contract period” and “interest rate”.
- “Subject” refers to assets used to become structured funds: ERC tokens that can be issued on Ethereum such as ETH, WBTC, MKR, BAT, etc.
- The “contract period” is the duration of the contract, which can be one month, three months, half a year, or even one year.
- “Interest rate” is the predetermined interest rate given by the system to “Preferred Share”.
In accordance with these three elements, investors are given two investment choices in two directions: “Preferred Share” and “Excess Return”.
This is similar to the above-mentioned LBT and SBT, but CSF is a more free form that divides it into more layers of fund products with different interest rates. Preferred Share is funds that can be repaid by preferential interest rates, and Excess Return It is a risk product that uses leverage to obtain excess returns, but may also suffer excess losses.
For example, if our subject matter is YFI today (YFI is only an example, the current team’s test product subject matter is still ETH), then the overall contract period is one month, the predetermined interest rate for Excess Return is 20%, and the overall CSF The operation process is roughly as follows:
Open for purchase period
During this period
A. Preferred Share investors deposit USD 10,000 equivalent of USD stable currency DAI into a structured fund; and generate CSFDAI, an ERC token, as a voucher for future exchange, which is a bit like the concept of Balancer’s BPT.
B. Investors of Excess Return shall deposit YFI equivalent to USD 10,000 into a structured fund. Similarly, CSF will also generate the CSF Token CSFYFI as a credential.
Redemption period
After the purchase is over, CSF’s smart contract will send the product to the decentralized exchange (DEX) to replace DAI with YFI. According to the CSF white paper, in order to avoid large exchanges, it is like DEX based on AMM mechanism. A sliding frame is generated, so the entire exchange period may be longer. For example, the case of the white paper lasts for two weeks. The algorithm is used to exchange a small number of times to extend the period.
The stable currency price is fully exchanged.
During lockout
Neither of these funds will be used in any way before the contract period arrives.
Redemption period
After a one-month lock-up period, there will be a two-week redemption period, and the smart contract will automatically go to the decentralized exchange to exchange the current YFI into DAI in batches until it meets the requirements for choosing Preferred Share during the purchase period. 120% of the DAI quantity will be exchanged until the end of the exchange.
Payment period
After the DAI is exchanged, users who choose Preferred Share can get 120% of the profit, and the remaining YFI will continue to be obtained by those who choose Excess Return. If the real situation is established, the price of YFI a month ago is roughly 4000 usd, you can get 2.5 DAI with the equivalent value of 10,000 US dollars. The current price of YFI is about 30,000 usd…
Well, if you are particularly optimistic about a certain ERC 20 currency, CSF will be a good choice, which is equivalent to forcing other people who do not understand or are not optimistic about this currency to buy coins for you with his money, and he It can also have stable income.
But if the price of your target item plummets after the lock-up period ends, then your loss is also magnified.
This is just a simple example, but in fact, structured funds can be divided into many layers. This can also be used as a leverage game for different investors who are optimistic about a project. For example, suppose I am optimistic that YFI can rise by 20%, Alice is optimistic that he can rise by 100%, and Bob believes that he can rise by 150%, then we can form a multi-level structured fund.
Hakka Finance also gave a chart to explain the profitability of investors with different interest rates for different multi-level structured funds at different price movements:
Source: Hakka Finance
As far as we know, Hakka Finance has not yet deployed CSF structured funds on the Ethereum mainnet. The main force in the near future is the development of Black Hole Swap , and DEMO products can be found here. At present, at the level of value capture, a small amount of handling fee may be drawn during the exchange process. As for the form of handling fee collection, it is still unknown and it is worth noting.
Here are how you want to profit
Generally speaking, DeFi is currently experiencing an unprecedented crazy period. However, whether it is Lien or Hakka’s CSF, the purpose is to make the funds the most suitable for different investors through the difference in the risk tolerance of all players in the market. . This will maximize the use of funds and give everyone greater flexibility in the choice of financial products.
Thinking more deeply, such synthetic asset commodities, if they do not consider product operations, theoretically have a modular effect. Anyone can have the opportunity to use their own subject matter and their favorite interest rate to generate The LBT/SBT or structured fund you want. So that everyone can make their own business based on a system, then this platform must be a big business, because how big the cake can be depends on how the cake is divided.
Another interesting feature is that in the past, Marker’s stable currency DAI began to be converted to multi-collateral DAI at the end of last year, but it has not yet accepted synthetic assets. How much is the iDOL token generated from extremely stable synthetic assets? Acceptance is also an aspect of the market that deserves attention.
This is also an important route to continue the promotion of DeFi’s Lego. At present, several of Lien’s products have not yet been launched, and CSF is also in the early stages of the project. It is still unknown which CSF purchase platform will choose in the future, and can be suitable for In the DeFi field, you who want to continue to explore continue to pay attention.
This article is an introduction to DeFi potential projects, but does not constitute investment advice for Lien or Hakka mentioned in the article. Both of these projects are at a very early stage. If there are errors or needs to be strengthened, corrections and exchanges of opinions are welcome. The time cost of writing articles in the bull market is high. If it helps after reading it, please like to encourage me.
More references:
Lien white paper:
[1] Lien Protocol :iDOL whitepaper
[2] FairSwap
[3]Lien ParameterTuning
CSF structured funds:
[1] CSF Whitepaper
[2] Talk about “Structured Fund CSF” from the Animal Crossing
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