Domestic DeFi, trapped in currency prices
"From the rise of DeFi's fame to being pulled down from the altar by domestic copycats, it may only take a moment of digging." An investor once predicted that he didn't want to make a prophecy come true.
Flamingo, a DeFi ecological project under NEO, was originally scheduled to go live at 9:00 pm on September 25. Due to wallet failures, a large number of users were unable to pledge assets smoothly, so they had to announce the suspension of "MintRush". The official explanation was a related problem with NeoLine.
"Millions of coins have been mined, and none of the retail investors have entered." An investor said on Weibo that the big account started digging, the node service was cut off, and no one else could get in. "Scientists can't be scientific."
As of press time, Flamingo has been "suspended" twice, and BTM's cross-chain DeFi project SUP has also been "suspended" twice, and has been jokingly called "a suspendable blockchain". "(The domestic public chain) claims to surpass the TPS and stability of Ethereum, but the copying homework is not good."
secondary title
"I was cut off by the domestic project again"
"Let's forget the domestic ones, none of them are reliable." Investor Ceylon told Shenchao TechFlow that in the cryptocurrency world, domestic projects are at the bottom of the chain of contempt.
He introduced that after experiencing the chaos of air coins in 2018, as long as domestic projects are mentioned in the currency circle, it means scams, cutting leeks and being unreliable.
In this wave of DeFi, domestic projects also failed to turn around and reverse the public's opinion.
"I was cut off by a domestic project again." Xiaoyun entered the currency circle at the beginning of 2018, and was trapped in a high point when investing in a domestic public chain project. A certain project called "the light of domestic DeFi" turned out to be slashed in currency prices and was deeply involved. "If domestic products are not careful, they will be trapped for thousands of years."
In the DeFi world, there is a new term called "earth dog". Soil corresponds to domestic production, while Tugou specifically refers to domestically produced project coins on Uniswap. Later, it generally refers to all domestic DeFi projects.
Domestically produced originally refers to things produced in the country. With the deepening of economic globalization, the concept of domestically produced products has changed. In the mobile phone industry and the automobile industry, domestically produced products refer to products that are independently developed and manufactured by China, or more than half of the components are localized. .
In the eyes of many people, domestic production means that the quality is slightly inferior. For example, domestically produced cars are not as good as German or Japanese cars.
In the blockchain world, not only investors/consumers look down on domestic projects, but even domestic projects themselves look down on themselves, deliberately pretending to be foreign projects.
What happened to Weibo blogger "Waste X Waste" just illustrates this point. He discovered a bug in Soda on September 20, and he chose to tell the development team as soon as possible. The other party spoke English with him at first, but after the bug was confirmed, the development team hurriedly asked in Chinese.
Domestic projects pretending to be foreign teams are not an exception. A practitioner once shared at an offline event how to package a domestic project into a foreign project: In addition to supporting Twitter, official website, and Discord, it is necessary to invite foreign/international security audit teams as much as possible, and in the promotional materials Hide team information and create the illusion of decentralization.
secondary title
Domestic DeFi, Handan toddler
This wave of DeFi heat wave came from abroad. In mid-June, Compound led liquidity mining, and Coinbase fueled the flames, detonating the market.
However, it wasn’t until mid-August that the total locked-up volume of DeFi approached 9 billion U.S. dollars and doubled by 10 times in 3 months. Only then did several major domestic public chains recover and announced their deployment in the DeFi field one after another.
On August 10, Nebulas (ANS) released its R&D roadmap for the second half of 2020, with DeFi services as the focus.
On August 11, GXC (GXC) announced that it will launch trailers and products related to cross-chain concepts, officially entering the DeFi track.
On August 16, Quantum Chain announced that it had completed the design and development of the decentralized exchange Qiswap to achieve compatibility with the Ethereum Virtual Machine.
……
On August 27, NEO announced the DeFi ecological project Flamingo, which is expected to be officially launched in mid-September.
Entering September, when the domestic public chain is gearing up and eager to try, the popularity of DeFi has gradually dropped. The DeFi market sentiment is concentrated on Uniswap currency issuance, while other enthusiasm is taken away by NFT and others.
"Domestic public chains are very difficult. If you engage in DeFi, you will be scolded, and if you don't engage in DeFi, you will be scolded." Xiaoyun said, "Many of these domestic public chains are also forced to rush to develop DeFi, otherwise the currency price will not improve. , was pursued by investors.”
After DeFi on Ethereum became popular, the price of Ethereum broke through a new high of $439 since July 2018. At this time, the vast majority of domestic public chain project tokens are still in a deep sleep.
As in the previous article of Deep Tide TechFlow"DeFi Can't Escape Ethereum"image description
Only 4 Dapps are still active on NEO
Facing the gap that was too late to catch up, domestic DeFis started the "Copy to China" mode.
Blockchain blogger "Xiong Xionghui" summed up the essence of domestic DeFi in two points: one is to migrate the existing DeFi model of Ethereum to the public chain, and the other is to build the public chain's own basic DeFi protocol, but basically it is DEX or Full stack protocol.
"Almost completely copy the various gameplays on ERC-style DeFi, without any innovation, it is basically deposit mining + liquidity mining."
In addition to the above-mentioned DeFi on the domestic public chain, at the application level, domestic DeFi also has no comparable foreign products. In the ranking list of Debank locked positions, there is no domestic DeFi in the top 10. dForce Shengcaibao, DODO, YFII, HBTC, and ForTube Bank V2 are ranked 12th, 21st, 24th, 23rd, and 26th respectively, but the sum of their locked positions is not as good as SushiSwap, which ranks 10th.
Looking back at the above-mentioned DeFi applications, they still belong to the "followers" after the rise of foreign projects. The track has been occupied by overseas projects. Whether it is the Internet or the blockchain, there is a "head effect", which naturally forms a barrier between funds and traffic. If it is just a simple imitation and follow, it is difficult to "overtake on a curve".
The rise of this wave of DeFi, regardless of the rise of DEX under the automatic market maker of AMM, liquidity mining, aggregation mining, and vampire attacks, are all the first foreign projects, and domestic projects are "learning in Handan".
In addition to the lack of innovation, domestic DeFi faces a more severe and urgent problem: the currency price trap.
secondary title
Domestic DeFi, trapped in currency prices
In 2017, Feng Xiaogang, who has always been outspoken, pointed the finger at the audience for China's production of junk movies.
"Producing a lot of rubbish movies is what audiences love to say. Is it because there are a lot of rubbish audiences that there are so many rubbish movies?"
Starting from this logic, will the plight of domestic DeFi be related to the atmosphere of the domestic currency speculation community?
Analyst Li Feng believes that most domestic investors only have currency prices in their eyes, and simply use the rise and fall of currency prices to measure the pros and cons of a project, which is not conducive to the long-term development of domestic projects.
"A rising market is a good project, and a falling currency price is a scam. The price trap of currency speculation not only kidnaps investors, but also kidnaps project owners," Li Feng said.
According to normal logic, the rise and fall of currency prices will fluctuate with the overall market conditions and the fundamentals of the project itself, but such a cycle is too long, and both investors and project parties want to quickly pull the market and realize it quickly .
When the project party starts to serve the currency price purely, it is obviously more cost-effective than doing things slowly, designing an economic model for rising currency prices, and cooperating with the community to call for orders. cooperate.
Breaking away from the fundamentals in the short term, the result of accelerating the rise is to overdraw the vitality of the project and become a pure bargaining game. "The more it rises, the harder it falls", which has become a true portrayal of most domestic projects.
Investor Zhang Bin divides the project party into four levels: "When doing things, the currency price will rise; if not doing things, the currency price will rise; Most of them belong to the latter two.
Compared with foreign project communities, a significant difference is that the topics of domestic project communities mainly focus on "coin price rise and fall" and "when to pull the market", while foreign project communities usually prohibit talking about currency prices and transactions, and focus on technology Development, product process.
Take this year's star project Chainlink as an example. Chainlink China Community Director Philip has repeatedly stated in the community that it is forbidden to discuss prices, which has also become a community consensus.
"Don't talk about the currency price" brings a relatively relaxed atmosphere to the community, and at the same time allows the project side to really "do things."
Take the leader of DeFi, the lending agreement AAVE, as an example. Soon after its token was launched, it fell by 80% from the high point and fell below the issue price. Since then, it has been hovering at the bottom of the price for two years. Many people even think that this The project is on the verge of death.
Until 2020, DeFi ushered in prosperity, and the locked value of AAVE rose from $1 million in early January to $1.5 billion today, a 1,500-fold increase. As a response to fundamentals, its token, Lend, has risen more than 100 times since the beginning of the year.
The currency price is like a double-edged sword. How enthusiastic are the praises and pursuits when they rise, and how miserable are the curses and curses when they fall. If you have been trapped in the currency price trap, then investors and projects that should be mutually successful It will undoubtedly become a lose-lose situation.
Once upon a time, Chinese manufacturing was also synonymous with copycats and inferior quality, but now, whether it is mobile phones, 5G communications, engineering manufacturing, high-speed rail... domestic production has gradually been recognized by the world from imitation to leadership.
In the field of blockchain, the Chinese once ruled the bitcoin mining industry and centralized exchange business, but in terms of specific protocol layers and application layers, they lag behind foreign countries?
*Shenchao TechFlow reminds all investors to guard against the risk of chasing high, and the opinions mentioned in this article do not constitute any investment advice.
