DeFi Token Issuance Dozens of Returns Is Just an Illusion, Reflections After the Failure of mStable Bidding
Editor's Note: This article comes fromBabbitt Information (ID: bitcoin8btc), author: free and easy, released with authorization.
Editor's Note: This article comes from
Babbitt Information (ID: bitcoin8btc)
Babbitt Information (ID: bitcoin8btc)
, author: free and easy, released with authorization.
This weekend, BTC and ETH are still in a boring low volatility state, and many people are starting to get tired, but the shocking dramas staged in the DeFi field can indeed make people secrete a lot of dopamine, and the author has also experienced it. crazy.
Of course, the ending is not happy, and it is written here to make everyone happy.
Let me summarize some recent personal views:
The scope of the DeFi concept continues to expand, and the entire currency circle is moving closer to this concept (even if it is something that seems to be irrelevant);
The combination of DeFi and CeFi means that users of centralized exchanges can participate in DeFi liquidity mining (yield farming);
The IDO (Initial DeFi Issuance) trend is intensifying, and the speculative atmosphere is getting stronger and stronger. The IEO of the centralized exchange will also restart. At the same time, the uneven level of projects will become more prominent, but in essence, these are still Disguised ICOs are prohibited;
For investors, IDO is actually a worse mechanism than ICO. Whether it is uniswap, balancer or the Mesa auction adopted by the mStable auction recently, the price investors get tokens can only be ten times or even dozens of times the institutional cost , and the initial price is very easy to manipulate, in general, IDO is not suitable for ordinary people to participate, but more suitable for those risk appetite. Liquidity mining also needs to be very cautious, and the newer the project, the greater the risk of code loopholes;
The trading volume of DEX surpassed that of CEX has become closer than imagined (mainly from stable currency);
Derivatives DEX and Layer 2 DEX will become the focus of the next market;
At present, there are generally large bubbles in the price of DeFi tokens, but this does not mean that the bubble will burst immediately;
The previous DeFi projects were "three haves" projects with products, achievements, and code security audits, but the author is worried that driven by the speculative atmosphere, more and more "three nos" projects will come out to cheat money. guard your wallet;
DeFi will inevitably encounter regulatory issues. For projects with a high degree of centralization, please be vigilant;
Many people think that the BTC bull market is far away, but I think it is just around the corner;
secondary title
The concept of DeFi has existed for a long time, why is it starting to be hyped now?
Many people may be wondering, the concept of DeFi has not been around for a long time, why is it not popular at the beginning, but now it is becoming popular? Is it still a hype concept?"First of all, there is indeed a force behind the hype of the DeFi concept, including large institutions like Coinbase, A16Z, and many participants in the Ethereum ecosystem. But in essence, finance is indeed the most suitable for the blockchain The field of application that drives this movement is a result of consensus."Second, in 2018-2019, the cryptocurrency market has not yet come out of the bear market, and the infrastructure is not perfect, so there is no possibility of large-scale expansion. At that time, DeFi was completely in the stage of toys.
After entering 2020, the launch of second-tier technologies and projects such as Rollup can expand the road for DeFi hundreds of times while greatly reducing costs. In addition, the emergence of smart contract wallets without helper words like Argent can also greatly increase Lower the threshold for using DeFi, that is to say, after entering 2020, DeFi has the premise of hype.
But in the early stages, DeFi must be dominated by speculation, which is what many people will say
phenomenon, because the people in this circle who are most likely to accept the concept of DeFi are actually people in this circle, but this is a necessary process before "breaking the circle".
Many people may say, isn’t it good to hold BTC and ETH, why bother to toss, because in the end, most DeFi projects cannot escape the ending of zero, and only a few DeFi projects are likely to succeed.
Looking at the long-term view, it will indeed be the case, but have you ever thought about it? If you don’t participate in it, how do you know what is going on in this field? How do you know if your original thinking is wrong?
In my humble opinion, the rise of DEX is inevitable, and the rise of DeFi lending is also inevitable. These are all to realize the trustless vision of blockchain assets, but this process will definitely be very tortuous.
secondary title
Reflections on the failure of speculating on mStable
Let’s talk about the author’s experience of participating in the mStable auction, then failing, wasting time, and dozens of transaction fees (about 0.4 ETH in total):
Why did you decide to participate in the mStable auction? Before participating, I thought about this question from three perspectives:
mStable meets the "three haves" standards of having products, achievements, and code security audits, and the overall valuation of US$15 million given by investment institutions is reasonable;
mStable is able to exchange stable coins without slippage, which is indeed competitive to a certain extent, and it is a project that can compete with Curve;
The IDO of mStable has chosen the auction mode instead of being directly launched on the balancer. This can solve the problem of robots pre-empting transactions, and the process is actually a bit complicated. This seems to be an opportunity;
But it turns out that my initial thoughts were too naive, especially the last point.
First of all, to participate in the mStable auction, you need to use the mUSD stable currency, which can be cast and exchanged through USDT, USDC, TUSD, and DAI at a 1:1 ratio, or you can choose to exchange it on Balancer. From the perspective of cost, it is directly Minting with stablecoins is obviously more suitable:
It is for this reason that the assets mortgaged by the mStable protocol increased by more than 11 million U.S. dollars on Saturday, and after the auction, the assets mortgaged by the mStable protocol plummeted from a maximum of nearly 40 million U.S. dollars to the current 29.4 million U.S. dollars, which is It is said that these newly mortgaged assets do not flow in naturally, but are used for the purpose of auction.
After minting mUSD, you need to transfer mUSD to the Mesa platform, then add trading pairs through the official guide, and make a bid. The rule is "A total of 2.66 million MTA will be auctioned, and the duration will be 2 days. At 22:00 on the 18th, Beijing time For the delivery time, the one with the highest price wins."
And every time you bid and cancel, you need to interact with the contract, that is to say, you need to pay a handling fee for each operation, and then the author foolishly performed 13 bids and cancel operations, most of which were in the last few days. minutes.
The bidding process is actually a game process. From the beginning, the author held the mentality of picking up the cheap, and then continued to raise the valuation of the project (Note: A few hours before the liquidation, the mStable project party deliberately announced the transaction with FTT The news of the in-depth cooperation), and then reached the limit of personal bidding ($1.3), and finally the sense of astonishment that occurred when the MTA liquidation price exceeded $1.8 and reached $3 immediately after the launch of Balancer.
There is no doubt that this DeFi speculation is a complete failure.
But from a rational point of view, it is really unbelievable that a DeFi project that has just launched has a valuation of more than 300 million U.S. dollars. In a trance, I feel like returning to the ICO boom in 2017 Feel.
In hindsight, in fact, this IDO method has a lot of room for manipulation, which is actually very unfavorable for investors (ji).
And many profit-making participants are non-stop looking at the next popular projects such as YFI and Curve. Similarly, it is also an incredible rate of return, but this is only on the surface, and it is by no means ordinary participants. The rate of return earned.
Therefore, after experiencing mStable's auction, I may not go to the IDO of new projects (unless the way of DAO is used), the related risks are getting bigger and bigger, and the "three noes" projects will also become more and more popular. many.
