“From DeFi’s rise to fame to being pulled off the altar by domestic cottages, it may only take a moment to excavate.” An investor once predicted that he didn’t want to become a truth.
NEO’s DeFi ecological project Flamingo was originally scheduled to go online at 9 pm on September 25. Due to a wallet failure, a large number of users could not successfully pledge their assets. They had to announce the suspension of “MintRush”. The official explanation was related to NeoLine problems.
“I have dug several million coins, and there is still one retail investor who hasn’t entered.” An investor said on Weibo that the big business hummed, the node service was cut off, and everyone else couldn’t get in. “Scientists can’t make science.”
As of press time, Flamingo “suspended” twice, and BTM’s cross-chain DeFi project SUP also suffered two “suspends” and was ridiculed as a “suspendable blockchain”. “(Domestic public chain) claims to surpass Ethereum’s TPS and stability, and it turns out that the copy job is not good.”
Are domestic projects really so bad?
“I was cut by a domestic project again”
“Forget the domestic ones, none of them are reliable.” Investor Ceylon told reporters that in the cryptocurrency world, domestic projects are at the bottom of the contempt chain.
He introduced that after experiencing the air currency chaos in 2018, as long as the domestic project is mentioned in the currency circle, it means scam, cutting leeks and unreliable.
In this wave of DeFi, domestic projects also failed to turn around and reverse public opinion.
“I was cut off by a domestic project again.” Xiaoyun entered the currency circle in early 2018 and invested in a domestic public chain project that was trapped at a high point. This year, liquidity mining emerged. She did not catch up with the first wave of well-known projects, so she bought A certain project called “the light of domestic DeFi”, as a result, the price of the currency fell on the heels, and it was deeply embodied. “Domestic products will be ensnared for thousands of years.”
In the DeFi world, there is a new term called “earth dog”. The soil corresponds to domestic production, and the soil dog refers specifically to the domestic project currency on Uniswap. Later, it referred to all domestic DeFi projects.
Domestic production originally refers to things produced in the country. With the deepening of economic globalization, the concept of domestic production has changed. In the mobile phone industry and the automobile industry, domestic production refers to products that are developed and manufactured independently by China, or more than half of the parts are domestically produced. .
In the eyes of many people, domestically produced 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 and deliberately pretend to be foreign projects.
What happened to the Weibo blogger “Trash X Trash” illustrates this point. He found a vulnerability in Soda on September 20, and chose to tell the development team as soon as possible. The other party spoke with him in English at first. After the vulnerability was confirmed, the development team hurriedly asked in Chinese.
It is not an exception for domestic projects to pretend to be foreign teams. A practitioner once shared in an offline event how to package domestic projects into foreign projects: In addition to supporting Twitter, official website, and Discord, you must also try to invite foreign/international security audit teams to publish materials Conceal team information and create the illusion of decentralization.
Why do domestic projects have to imitate foreign projects? Why is the stigma of domestic projects so far? What is the difference between domestic projects?
Domestic DeFi, Handan Toddler
This wave of DeFi heat wave came from abroad. In mid-June, Compound led the liquidity mining, Coinbase helped fuel the flames and detonated the market.
However, it wasn’t until mid-August that the total DeFi lock-up volume approached 9 billion U.S. dollars and doubled tenfold in three months. Several major domestic public chains slowed down and announced their plans in the DeFi field.
On August 10, Nebulas (ANS) released its R&D roadmap for the second half of 2020, with DeFi services being the focus.
On August 11, GXC announced that it will launch trailers and cross-chain concept related products, officially entering the DeFi track.
On August 16th, Quantum Chain announced that it has completed the design and development of the decentralized exchange Qiswap, achieving compatibility with the Ethereum virtual machine.
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On August 27, NEO announced the Flamingo DeFi ecological project, which is expected to be officially launched in mid-September.
Entering September, just as the domestic public chain was gearing up and eager to try, the popularity of DeFi gradually declined. The DeFi market sentiment was concentrated on Uniswap, while other heat was taken away by NFT and others.
“Domestic public chains are very difficult. You will get scolded if you do DeFi, and you will be scolded if you don’t engage in DeFi.” Xiaoyun said, “Many of these domestic public chains are also forced to rush to develop DeFi, otherwise the currency price will not improve. , The investee will pursue it.”
After the DeFi on Ethereum went viral, the price of Ether broke through a new high of $439 since July 2018. At this time, the vast majority of domestic public chain project tokens are still sleeping.
Due to the precipitation of asset types, performance transfer, and centralization, other public chains other than Ethereum still have a long way to go for DeFi.
Faced with the gap that was too late to catch up, domestic DeFis started the “Copy to China” model.
Blockchain blogger “Xiong Xionghui” concluded that the essence of domestic DeFi has 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 they are basically DEX or Full stack protocol.
“Almost completely replicates all kinds of gameplay on ERC-style DeFi, and no innovations have been seen. Basically, they are coin deposit mining + liquidity mining.”
In addition to the aforementioned DeFi on the domestic public chain, at the application level, domestic DeFi also has no comparable products to foreign countries. In the Debank lock-up volume ranking list, the top 10 does not have domestic DeFi. dForce Shengcaibao, DODO, YFII, HBTC, ForTube Bank V2 are ranked 12th, 21st, 24th, 23rd, and 26th respectively, but the total amount of lock-up is not as good as the 10th SushiSwap.
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 to capital and traffic. If you simply imitate 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 AMM automatic market maker, liquid mining, aggregate mining, and vampire attacks, are the first foreign projects, and domestic projects are “toddlers in Handan”.
In addition to the lack of innovation, domestic DeFi faces a more severe and urgent problem: the currency price trap.
Due to the overall callback of the DeFi market, incentive mechanism, rat warehouse and other reasons, dForce, Fortube’s tokens DF and FOR dropped from their highest points by 81.7% and 67% within a month. Many major members threatened to call the police and open the way. The currency price has become a heavy burden for the project party. Is the project party responsible for the product or the currency price? This is a problem.
Domestic DeFi, stuck in the currency price
In 2017, Feng Xiaogang, an outspoken little steel gun, pointed the spearhead of China’s production of junk movies at the audience.
“The production of many junk movies is what the audience likes to say. Is that because there are so many junk viewers that there are so many junk movies?”
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 have only the currency price in their eyes, and simply use the currency price to measure the pros and cons of the project, which is not conducive to the long-term development of domestic projects.
“Raising the market is a good project, and falling currency prices is a scam. The price trap of speculating coins not only kidnap investors, but also the project party,” Li Feng said.
According to normal logic, the rise and fall of the currency price will fluctuate with the overall market situation and the fundamentals of the project itself, but such a cycle is too long, and both investors and project parties want to pull orders quickly and realize quickly. .
When the project party starts to serve the currency price purely, it is obviously more cost-effective than doing things slowly. It is obviously to design an economic model for rising currency prices, cooperate with the community to call for orders, and even many project parties choose to cooperate with the funding and MLM teams Cooperation.
In the short term, it will deviate from the fundamentals, and the result of the accelerated rise is the vitality of the overdraft project, which becomes a pure bargaining game. “The more you rise, the harder you fall”, it has become a true portrayal of most domestic projects.
Investor Zhang Bin divides the project parties into four levels: “Doing things, the currency price will rise; doing things, the currency price will rise; doing things, the currency price will not rise; if not doing things, the currency price will not rise.” He believes that domestic projects Most of them belong to the latter two.
Compared with the communities of foreign projects, a significant difference is that the topics of the domestic project communities mainly focus on “coin price rises and falls” and “when to buy”, while foreign project communities often prohibit discussing currency prices and transactions, focusing on technology Development, product progress.
Taking this year’s star project Chainlink as an example, Chainlink China Community Director Philip has stated in the community many times that it is forbidden to talk about prices, which has become the consensus of the community.
“Don’t talk about currency prices” brings a relatively relaxed atmosphere to the community, and at the same time allows the project party to truly “do things.”
Take the leading DeFi lending agreement AAVE as an example. Soon after its token went online, it dropped by 80% from the high point and fell below the issuance price. In the following two years, it has been hovering at the bottom of the price, and many people even think this The project is dying.
Until 2020, DeFi will usher in prosperity, and the lock-up value of AAVE has risen 15 times from US$1 million in early January to US$1.5 billion today. As a fundamental reaction, 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 is the praise and pursuit when it rises, and how miserable the abuse and curse when it falls. If you have been trapped in the currency price trap, investors and projects that should have achieved each other Fang will undoubtedly become a lose-lose situation.
Once upon a time, made in China was synonymous with copycat and inferior quality, but nowadays, whether it is mobile phones or 5G communications, engineering manufacturing, high-speed rail… domestic production has moved from imitation to lead, and is gradually recognized by the world.
In the field of blockchain, the Chinese once ruled the Bitcoin mining and centralized exchange business, but in terms of the specific protocol layer and application layer, are they lagging behind the country’s future?
Just as Chinese fans love and hate Chinese football, we still look forward to the rise of domestic DeFi, which is no longer to follow the trend and imitate, but to lead the way. We hope investors will have more patience and the project team will have more long-term persistence and innovation.
