From faith-driven to business-driven, where does DeFi go?
The most popular topic on Weibo and the community in the past two weeks is DeFi:
"I regret it so much that my legs are swollen..."
"Hey, it's been my own meat to squeeze the wool for a long time..."
"It's a good thing I didn't move, otherwise I don't know what kind of heartache it will be..."
The mood of people in the currency circle seems to have been on a roller coaster in the past two weeks. Excited, excited, regretful, and sad, everyone is vying to be a "farmer" and go to the field to "plow land", sweet potatoes, sushi, kimchi, pearls... .. There are more and more pronouns of all kinds, and the bubble bursts immediately. Are you reading this article an outsider who continues to wait and see, or an insider in the DeFi circle? What kind of thrilling end of August and early September did you experience?
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It is a great honor to invite two guests today, Farming Pioneer, Weibo Big V Chaojun and Bixin CEO Xingkong. I don't need to say more about where the two guests are. From Bitcoin, from DAPP to the current DeFi, Super Jun has been working in the industry for 8 years, and has not been farming until recently. There is no need to introduce Xingkong, the vision of the project is very vicious.
Since DeFi has become popular, the speed of the currency circle has accelerated so rapidly that many people have not yet reacted. At this time, everyone desperately needs people who have been on the frontline of farming to help us analyze what is going on in this market. In this market where several new hotspots and new projects are launched within an hour, it is a great honor to invite two very promising guests to share their views with us in spite of their busy schedules. Then I won't say much, and get to the point right away.
From Compound lending and mining in June this year, Uniswap decentralized exchange, Link doubled by three or four times, and then the popularity of big uncle, second uncle, and SUSHI, many new projects have emerged rapidly in the DEFI ecosystem . This is hard to imagine for a market that has just experienced a 312 general decline in the first half of the year. So this also leads to our first question today, where does the money for DeFi skyrocket come from?
Although I have participated in many discussions about DeFi, many people pronounce it as "Defei". Therefore, those who pronounce it as "Defei" are liars, and those who pronounce it as "Di Fai" are serious platforms.
This decentralized finance is actually the friction between various financial needs. The DeFi in the currency circle started as a friction of lending. It is a long-term demand in the currency circle to use money to speculate in coins. With the issuance of compound in the form of tokens, there is a token economy, and everyone revaluates the value of DeFi, and then buys tokens in the form of stocks, which promotes a skyrocketing price, which is driven by belief. business driven.
The iconic development of DeFi is the governance of YFI and the distribution model of tokens, how to start the project, how to maintain it for a long time, etc., which has inspired many people. DeFi was a small circle before. USDT had a market value of tens of billions. After the introduction of DeFi, the market exploded, so now many people want to introduce Bitcoin into the market. There are still many people watching this circle. Everyone has seen that the blockchain is a good development direction. The various decentralized protocols of DeFi can build a permissionless financial world, which is very attractive.
The second is the bubble economy. The myth of getting rich in this circle has prompted more people to come in, and it has also stirred up the deposited funds of centralized exchanges, which are the source of DeFi money.
Super Jun has been looking for various investment directions and is very proficient in DeFi research. In fact, the biggest promotion of DeFi is stable currency. All stable currency has a combined scale of 10 billion, so it is very easy to promote the price of a certain currency.
One of the hottest things recently is SUSHI. One of the anonymous founders probably sold all the SUSHI in his hand last week, and cashed out nearly 100 million yuan. I remember that after SUSHI was listed on the three major exchanges in one day last week, the entire market sentiment rose, but this weekend experienced a collapse, with the highest price being $13 and the lowest being $1.2. So let's put aside our personal emotions, what do you two think about SUSHI mining?
I have participated from the beginning to the present. When I first dug out the currency price was 300 dollars, then it fell to 3 dollars, then rose back to 5 dollars, and then fell back to 0.5 dollars... It is such a process. I sold it as soon as I dug it up, so I made money. Because many projects "die" in a few weeks. So when I sold all my SUSHI at $1.30, I fell asleep and went online to the three major exchanges, and the price went up again. After going through it several times, I was really heartbroken and almost suffocated. I am still digging for SUSHI, but I have lost a lot of money. After eating the meat for a long time, I found that the meat was all cut from myself.
Many people in the audience did not participate in DeFi mining. Let me explain briefly. Mining is like this. For example, if you mortgage the ETH-USDT transaction pair into the pool, you can exchange it for LP tokens to provide liquidity, and then put them into the SUSHI pool to get SUSHI Token. , but the risk borne by investors is great. For example, the liquidity of the SUSHI-ETH trading pair is equivalent to putting an Ethereum and a corresponding amount of SUSHI into the liquidity pool. My understanding is that it is equivalent to selling it, but it is no longer the case when it is recovered. This ratio is too high, which is what we often call impermanence loss.
Let Xingkong also talk about its views on sushiswap.
In fact, I am very optimistic about the swap field, especially after the Uniswap model came out, many people dug up cheap coins, voluntarily assumed impermanent losses, and provided liquidity for everyone. This is a very good thing, and swap will have a good development in the future prospect. However, as an asset, Bitcoin still has a market value of hundreds of billions, so swap is still not comparable to Bitcoin. I think that after the market maker model of Uniswap came out, it was a great subversion of the entire trading field, and it was open finance. The slippage of 1000 ETH is only a few tenths, and swap will become a cornerstone of the decentralized field.
Let me tell you some digressions. There are three freedoms that human beings need to realize. The first is the freedom of movement, such as transportation, you can go anywhere; the second is the freedom of information exchange, such as the Internet, so that everyone can communicate freely; the third is the freedom of value transmission, which is in It has been implemented on Bitcoin, but it is still relatively simple. At present, it is transfer and exchange. However, DeFi has achieved financial freedom, such as borrowing and lending, which cannot be achieved in the previous model, and there are thresholds.
For example, in 2014 or 2015, we were going to mine, but we only had bitcoins in hand. It was impossible to get a bank loan to buy a mining machine, because the value of another dimension is worthless in reality. But now it is very convenient to have a DeFi system. Although the demand is small at present, this is a good development process. There is also no way to achieve a high degree of flexibility and freedom in centralized financial lending, but it is possible in DeFi. For example, I can only borrow money for one day or one hour, which is impossible in centralized finance.
Bixin can borrow money and repay it at any time within a day~
Let me also talk about my heart. Traditional financial institutions don’t care whether everyone can use financial products, they only care about whether this customer can bring them value, so the emergence of DeFi allows everyone to enjoy financial services, giving the market a lot of confidence and changes . The same is true for lending. In DeFi, what you can do with every dollar is written in the code, which is very free and efficient.
Speaking of the topic, the trading volume of Uniswap in the second half of last week was basically more than 500 million U.S. dollars, and the transaction fee income was about 2 million U.S. dollars, ranking among the top of all exchanges. Regardless of whether it is centralized or decentralized, a large part of the value created by exchanges comes from transaction fees. Therefore, the transaction volume created by Uniswap is still very amazing.
I still have to say that the bubble in this matter is very big. Now more than 70% of the pending orders in the pool are for SUSHI rewards. If the SUSHI rewards are migrated or cannot be handled, the bubble will burst. Of course, even if there is no SUSHI reward, the annualized transaction fee of pure ETH-USDT can still be about 30%, so even if you don’t do anything, you can make money. But the economic benefit brought by the bubble is the highest, so I still stick to the strategy of digging, selling and raising. Of course, these pools, as cutely said, can also have a valuation of hundreds of millions. Now the pool with the highest valuation should be YFI’s pool.
But if you want to seek stability, in addition to digging, selling and withdrawing DeFi projects, you just hold Bitcoin and sleep very peacefully.
In my opinion, all DeFi tokens are not worth buying now. Now is the bubble stage, and the bubble stage needs to plummet to educate everyone.
So just now Super Jun talked about Uncle (YFI), why do you have a soft spot for Uncle?
It's not that I have a soft spot for my uncle, but that he is really doing something, not just to make money. Of course, I don't recommend everyone to buy it, because the price is too high. I am optimistic about YFI myself, but I don’t know how to define it. It has built too many things. The to B side is to provide liquidity, and the to C side is to give everyone the opportunity to participate.
In fact, what we are talking about is that there are many tracks in DeFi. Super Jun is very optimistic about aggregators like Uncle and Uncle. Of course, this is not investment advice, but just a discussion of opinions. With so many tracks, which one do you like in the starry sky?
Now there are two ways, one is a value chain like Bitcoin, and everyone agrees with the value of Bitcoin; the other is a tool chain, for example, people do some things like borrowing and lending on Bitcoin.
I am still more optimistic about swap. Although the current token incentives have created a bubble boom, some exchanges and huge wealth will be left behind after the boom. This is the gold after the big waves wash away the sand. In addition, I will be optimistic about elastic assets, just like there is a leverage model and a mortgage model in lending, there may be a phenomenon of smashing the market, which has weaknesses; and elastic assets are communities that compete with each other to maintain prices.
In fact, I was not very interested in decentralized finance before, but after elastic assets came out, I recognized the development in this area. But what is certain is that most of my assets are still bitcoins, and the others are venture capital, which can be said to be paying for my ideals.
I'm also bullish on synthetic assets. For example, almost everyone has never bought Tesla shares because the threshold is too high, registration is required, a US dollar account is required, and the price is also high. The logic behind this is that it is not free. So we really need DeFi to solve this problem. Synthesize Tesla stocks, put them on the chain, and everyone can buy them.
Based on my Dapp experience, this wave of DeFi is somewhat similar. Although I started mining early, in fact, I have already entered three times and exited three times, because my attitude towards projects is that I don’t accept them. There are many imitation disks and fake projects. I will come out as soon as I see them. Get well and dig in again. I experienced such pain in the Dapp era. I entered the market at 1 yuan, and it rose to 60 in two months. In the end, I didn’t sell it, and watched him return to 1 yuan. So this time DeFi I kept a high degree of vigilance, three in and three out.
Just now I saw a friend ask, are these coins air coins? I can say that 90% of them are. If you want to defend your rights, there is no place to go. If you want to participate, you can dig it. Don’t buy it. If you have this money, you might as well buy roast goose.
I see that many viewers are still very interested in mining. Farming Pioneer Super Jun will tell you what risks you need to pay attention to in mining!
First of all, if the assets are less than $50,000, don’t go to Ethereum mining. The handling fee is too high, and if the liquidity is low, it will take many days to mine back, which is not cost-effective. Now many yields have come down. If it is a stable currency, the annualized rate is basically between 100% and 200%, and it may become lower and lower in two weeks. In August, I predicted that if many people were mining, the price of Bitcoin would fall.
DeFi has truly achieved equal rights to money. DeFi is different from the ICO stage. The money of each ICO user is unequal. People with more money have the right to invest at a low price in the early stage, and retail investors can only buy at a higher price later. In DeFi, your 1 yuan is the same as the 1 yuan of a big player, and the mines they dig are the same. Of course, if he has a lot of money, he will have more rights. This breaks the middle layer, breaks the VC, and breaks the token fund. There is also information inequality behind this, but equality can be achieved through hard work, such as spending a lot of time browsing domestic and foreign news every day. But you still have to be careful, there are pitfalls on the way to receive information, and the private key may be stolen to steal coins.
When it comes to the risks of mining, one is the contract risk, whether you dare to go without an audit, whether you can understand the code, etc.; the second is whether you are digging in the first pool or the second pool. liquid. I dare not touch Erchi’s so-called liquidity-providing tokens. This is also a bloody lesson. What I am most looking forward to is the trading pair like BTC-USDT, because I will not feel bad when it becomes Bitcoin or USDT after impermanent losses. But there is no Bitcoin project now. Bitcoin is not popular in the DeFi world because they think Bitcoin is an old thing, but they are looking forward to the addition of Bitcoin because it has a market value of hundreds of billions of dollars. In addition, it is necessary to mine large coins and stable coins, and do not make small coins. Small coins also need to be hedged. Buy a 1:1 or 1:2 short position, so that will work. So I like ETH-USDT very much, a universal trading pair, but I am not investing in Ethereum, so I will be heartbroken when Ethereum falls.
In addition, I want to say that YFI has a disadvantage, that is, it has distributed 30,000 in a week, so it is very concentrated, and it is easy to be smashed by big bosses.
The YFI model is prone to splits. Seeing that it is so difficult to buy, it is better to create a new community, just like the second uncle. Therefore, the community incentive distribution is not enough, and it is difficult for newcomers to participate. In the end, it became a small group of people. thing. I still think decentralized finance can solve problems, like stablecoins, asset issuance, etc., not just on Ethereum. Ethereum has only played the role of a tool chain, and the price has not risen, which is embarrassing. Just now Super Jun mentioned the revolution of DeFi, allowing more people to participate, so although there will be problems in open finance, there will be many achievements. We are now taking Bitcoin and spending 10% or 20% of the funds on DeFi investment.
In fact, my view on DeFi is that liquidity mining will definitely be the mainstream of future mining. Liquidity mining can make some projects truly successful. The project party must do something to get these tokens, design a good system, and make the whole community fair. In fact, this is unfair to good project parties, and they will be plucked to death. Moreover, it is difficult to persist in mining without risk. There is no hesitation in smashing the market. The DeFi model has friction loss, so that farmers can feel sorry for the coins they dug out.
What Xingkong means is that some mining is risk-free. Instead of providing liquidity, it simply stakes coins in and digs out cost-free coins.
My investment philosophy is this, I think about the bottom line. To make money at the end is arbitrage, and to keep it right is to hold Bitcoin well. The most commonly used arbitrage is to squeeze wool, such as DeFi, perpetual motion machines and so on.
Let me comment on YFV again. In my opinion, this is the strongest fund, because its liquidity is not 50 to 50 on Uniswap, but 98 to 2. In this way, even if the token loses 90%, your actual loss has just reached 20%, and this impermanent loss will be much, much less.
Before compound, I didn’t include DeFi in the future, because at that time the profit was very small and the risk was very high. But now the combination is more convenient, and USDT is introduced, so I am willing to take this risk.
Explain the basics and the end of the mind, the basics and the end of the mind is simply to collect wool, and use the money obtained from the wool to hoard bitcoins.
Just now Super Jun also mentioned that he has experienced the Dapp stage, so does Super Jun think that DeFi has a chance to go out of the circle?
I don't know, I'm just a happy farmer!
In fact, the most important thing in finance is credit, and it is also necessary to go to credit in the chain. So how to achieve credit is based on the data on the chain. DeFi needs to introduce a decentralized identity ID, which identifies all transaction data, etc., but this current technology cannot be realized, and future efforts are still needed.
When Superman mentioned credit just now, I also think that decentralized finance solves the same user needs as Bitcoin, that is, you don’t need to trust others. Traditional finance has a barrier of trust. When human society wants to develop rapidly, it needs to cash out the future cash flow to today. Translated into Mandarin is borrowing money. Financial institutions also need to audit, which requires a lot of time, labor and money. But DeFi is different. Like Uniswap, every transaction is reviewed by Ethereum miners, and the team is small. It can be quickly launched in the early stage and mobilize the power of the entire protocol of Ethereum to accomplish one thing, which is amazing. .
I think I have to tell the hoarders that when I come to Bixin Live, DeFi is very small for Bitcoin so far, and Bitcoin is very big for DeFi. It is necessary to have an insightful thinking in investment and see something revolutionary, but in fact it may take 20 years. The vast majority of outsiders don’t know about DeFi or Ethereum. Only Bitcoin is the only window, so it’s good to hold on to Bitcoin, and everything else is a bubble. The entry of many large institutions into Bitcoin is a good proof.
I wrote an article before called "Wallet is the browser of the future", so I have been following the trend, from Dapp to DeFi I have been involved, and slowly saw the possibility. In 2014, everyone proposed what blockchain 2.0 looks like. Programmable digital currency is the first stage, and the second stage is the decentralized economy. This concept is much bigger than DeFi, and the third stage is decentralized. body polity.
In fact, many outsiders do not understand the matter of Bitcoin, and the operation of DeFi is even more difficult. Therefore, Bixin has always wanted to be the entrance for everyone to get in touch with the blockchain. You can pay close attention to it. DeFi related products.
Mr. Super just mentioned the entry of institutions, can you elaborate on the institutions’ views on the impact of the market?
In 2015 and 2016, there were not many institutions hoarding bitcoins. In 2017, this was a year of shocks in the industry, and institutions began to hoard coins strategically, which was a large amount. So now, it is meaningless to preach Bitcoin in an individual capacity, and it is necessary to promote it to outsiders through institutions.
Some viewers asked how to judge the wealth code, please tell me about it.
First of all, at the current stage, it must be driven by business rather than belief. It must be analyzed according to the stock market, such as what problems it solves, whether it is necessary, whether it can exist for a long time, how creative the team is, and so on. Pay attention to fairness and equal rights. It is fair in the token distribution stage. This project is in demand and can solve problems.
The founder of YFI gave me a lot of inspiration. I think that you cannot be anonymous when doing DeFi. YFI has set an example, everyone can participate, there is no team reward, and no additional rewards will be given to the development team. I appreciate this idealism, but the only pity is that the coin issuance cycle is too short.
(The content of the live broadcast is the personal opinion of the guests, does not represent the position of the platform, and does not constitute any investment advice)
Super Jun has provided a lot of dry goods in this live broadcast. I don’t know if my friends have gained something!
Interested friends remember to continue to pay attention to the Bixin WeChat official account and the official Weibo @bixin wallet. We will launch products related to DeFi in the near future, and we will update more exciting dry goods and stories of big shots!
Friends with DeFi experience can also tell us your stories and experiences in the message
Friends who have not had time to participate can also write down your expectations for DeFi in the comments
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