Zhang Yuanjie, co-founder of Conflux: An innovative high-performance underlying system can better support DeFi | 2020 New Area Summit

郝方舟

@OdailyChina

2020-08-29 18:53 (UTC+8)

本文约3353字，阅读全文需要约13分钟

The advantage of Conflux lies in its high-performance, scalable, Solidity-compatible smart contracts, and its unique "payment function".

On August 28, the "2020 New District Potential Blockchain Technology Finance Summit" was held in Beijing. This summit is co-hosted by Huobi Group, 36kr and Odaily, sponsored by Behelix & HBTC, strategically sponsored by ChainUP, specially sponsored by PayPal Finance, Conflux, BitUniverse, WaykiChain, XnMatrix, Hashi Co-sponsored by Technology, Mixpay, COCOS, and Shanghai Diyi.

Many authoritative experts and professors from financial institutions such as funds, securities, banks, and industry leaders gathered here to share new information on financial technology and explore the future potential of blockchain. (Click to enter the video replay of the summit）

Click to enter the video replay of the summit

In the afternoon, Zhang Yuanjie, the co-founder of Conflux, delivered a speech on the theme of "The Double-sidedness of the DeFi Boom - How Exploding Gas Fees Hinder DeFi's Innovation and Cold Start".

Zhang Yuanjie said that although DeFi is hot, it has also caused network congestion on Ethereum, skyrocketing gas fees, weak user growth, and becoming a big player game. To break the game, developers need innovative high-performance underlying systems. The advantage of Conflux lies in its high-performance, scalable, Solidity-compatible smart contracts, and its unique "payment function", which can reduce the transaction fee threshold for participants, the migration threshold for developers, and the entry threshold for DeFi users.

The following is the full text of Zhang Yuanjie’s live speech, edited by Odaily, enjoy~

Hello everyone, I am Zhang Yuanjie, the co-founder of Conflux. We are a public chain with a team of top Chinese scientists and engineers in China. The topic I am sharing with you today is DeFi, because DeFi is relatively hot. As a domestic chain, if we want to surpass Ethereum, we must research and humbly ask and learn from others. Today, I also ask Yuqing to share with you.

Yuqing: Hello everyone, I am Yuqing, and I am in charge of throwing bricks. Today's topic is the duality of the DeFi boom.

We all know that DeFi is very hot this year, which has triggered many people to dig for gold. At the beginning of this year, the share of digital stablecoins was only about 5 billion US dollars. By the middle of this year, the circulation of stablecoins exceeded 10 billion US dollars, which has doubled. After the amount of assets increases, the various protocols above will have more innovative possibilities.

In June of this year, Compound launched liquidity mining. You only need to borrow or deposit on the Compound platform and use the product to get platform tokens. To put it simply, users are originally reaping melons, and after liquidity mining, they can reap melons and beans. The project uses zero cost to motivate community members, so that the interests of the community and products are more closely bound. Tight, the effect is also very significant. Compound's excellent data has made other projects not to be outdone, launching their own tokens one after another. In August of this year, the amount locked in DeFi soared to $7 billion.

Large households and miners sleep until they wake up laughing, and the headlines of the major news are all about the increase of 60 times, hundreds of times, or even thousands of times after the launch of a certain token. Although I am a small brick mover at the bottom of the currency circle, I also took out a little pocket money to participate in the mining of Compound. When I want to withdraw the principal, I am dumbfounded. The interest I earn is not as high as the handling fee. Others have earned thousands of times and I am not enough. Why is the handling fee so high? DeFi is too hot, which has caused the network congestion of Ethereum. Now all of them are developed on the Ethereum network. As a large number of wool parties are attracted by DeFi, the network utilization rate of Ethereum has become higher, and the more It is getting more and more congested. If you want to prioritize transactions, you can only increase the packaging fee, which adds fuel to the flames and makes the transaction fee of Ethereum very high.

Zhang Yuanjie: Let me add a few words. Compound is only the interest on deposits. The interest rate for deposits is 5-10%, which is higher than traditional Alipay. Why is there an annualized hundreds of percent? He has a concept, he not only gives you interest, he also gives you stocks, which is why many users participate in this process even if the handling fee is too high, and then stimulate the fundamentals of this matter to rise.

Yuqing: Everyone knows that the threshold for using DeFi products is very high, and it takes many steps to operate. I would like to ask Yuan Jie, how much principal did you invest to exceed the handling fee when you participated?

Zhang Yuanjie: I am a founder with no money, and the money I can come up with is only $10,000. I found that I wanted to put this stock on the market and sell it on the first day after I entered it. In this case, my money is not enough for my handling fee. I put the money in and don’t move it for a week. 1% is a few hundred dollars. A week later, the "stock" has completed a cycle conversion, and the rate of return has gone down. For a person without money, it is a bit embarrassing to participate in the behavior of saving money to get stocks. Later, I consulted rich people, and I found out that hundreds of thousands of people do such things, and they can earn 10% a week, or even 10% a day. The contracts they participate in may not have been code audited.

So here I give you a suggestion, if you really want to participate in liquidity mining and be a liquidity provider, it is best to have 30,000 US dollars, and you can cash out the stocks a day or two, and you can also hold them. The current stock is undervalued, no matter how much money you have, he will not charge you proportionally. Ethereum is equivalent to a fee with a lower limit. More and more people use it to form a bidding transaction. I changed from one to two dollars at the beginning to ten to twenty dollars, and you have to be able to bear the loss of the principal risk. What we do in blockchain is very risk-tolerant.

Yuqing: Users in the currency circle feel that the threshold is so high, and they are reluctant to invest so much money into emerging products, let alone ordinary Xiaobai and community users. Therefore, the user growth of DeFi is also very weak.

From the data point of view, the most popular DeFi products, such as the old MKR and COMP applications, have less than 30,000 independent addresses; the phenomenon-level applications YFI and YAM have only more than 5,000 and more than 10,000 currency-holding addresses. The whole DeFi game seems to be a group of giant whales guerrilla from one project to another.

Zhang Yuanjie: To add, the current daily popularity of Ethereum is 22,000 to 25,000. There is basically a fault in the application of the head, and the number of users in the back drops to about 2,000 or 1,000. Generally, for a particularly popular application, there are only 4,000 participants, and it should be noted that this is a global scale, and the number of participants in China is about 1,000.

Yuqing: For entrepreneurs whose traffic is the king, this is very embarrassing. For ordinary users, the handling fee is already a threshold. With meager profits, everyone will feel distressed about the high handling fee. In this case, many people may choose to buy coins directly on exchanges in the secondary market, but some coins will plummet by 98%, 99% all the way after being listed on the exchange. Some people in the community even claimed to recharge 100,000 yuan, which became 860 overnight. The primary market cannot participate, and the secondary market is easily cut off, making it difficult for ordinary users to participate.

For developers, the more complicated the code logic, the higher the handling fee, and the higher the threshold for users. If it is a new project that wants to adopt a very radical liquidity mining method to attract people, small investors have no money, and large investors have no interest. Although everyone knows that DeFi is hot, there are also many people under the banner of decentralization. , I think DeFi is not a very fair game.

As far as the underlying facilities of Ethereum are concerned, Ethereum seems to be gradually becoming a gold digging system for big players. Because its underlying performance is not high enough, there is no way to carry the transaction volume when the transaction volume rises, and users can only be packaged first through the handling fee. Ethereum seems to be increasingly becoming a game among giant whales. Many people and projects have made money from the DeFi craze, but everyone should also think about whether they have brought real value to the blockchain and the currency circle, or are they just blindly speculating on concepts, or even misappropriating money. Think about what our original intention is? Is it to take advantage of the wave for a short time, or to return to the value itself?

Mentioning our public chain, Conflux, is to make up for the shortcomings of Ethereum, rather than watching big players play. We achieve the improvement of the bottom layer through technological innovation, so that more people can participate equally. As President Gao of Huobi just said, the future vision of DeFi is to hope that everyone can benefit from this kind of decentralized finance, which is also the vision of our Conflux.

Conflux also uses the POW mechanism, but under the original mechanism, it can achieve the performance of more than 3000-6000 TPS. In this way, for users, developers and entrepreneurs, the transaction fee is no longer a threshold.

In order to be more friendly to developers, Conflux is compatible with Ethereum's virtual machine, including various smart contracts. Developers on Ethereum can migrate to the Conflux chain without any obstacles.