Since the development of DeFi, it has shifted from the competition of technology and mechanism to the competition of product power.
Written by: Eric
The cooperation between the DeFi protocol and the exchange public chain has attracted more and more attention from the market.
Exchange, as the application with the largest user base at least so far, can provide DeFi with users, low handling fees, faster transaction speed, etc. in combination with the DeFi protocol; in the same way, DeFi also brings more diversification to the exchange. Features. DeFiner, an established lending agreement that is about to support multi-chain and the main ecological partner of OKExChain, one of the three major public chains, is the protagonist of today.
Before the emergence of the DeFi concept, DeFiner was already active in the crypto market. DeFiner has a team from the US government and Fortune 500 companies such as the Federal Reserve, Microsoft, Symantec, Qualcomm, and financial and technology industry backgrounds. Since its establishment, it has received investment from well-known venture capital funds such as Techstars, Signum, Alphabit, and SNZ. The project team won the Detroit Fintech Challenge in 2019, and was named one of the eight most noteworthy fintech startups in the United States in 2020 by Fintech News the following year.
Can be appreciated by many venture capital institutions, besides the luxurious team lineup, what special charm does DeFiner have?
The lending market in DeFi
The current DeFi mainly focuses on four major markets: increased leverage (lending, margin trading), trading (DEX, etc.), synthetic assets, and wealth management agreements (insurance, etc.).
In the traditional financial market, lending is a huge demand, and it is no exception in the blockchain industry. Stimulated by the demand for arbitrage, leverage, and market-making transactions, decentralized lending has ushered in explosive growth after MakerDAO, AAVE, and Compound have verified the feasibility of their models. The lock-up amount of the entire network’s loan agreement has soared from US$530 million in early April last year to more than US$25 billion today, and the lock-up assets have increased by as much as 50 times in a year.
In addition, data from defipulse.com shows that as of the evening of April 6, 2021, the top three locked positions in the DeFi agreement are all loan items:
This shows that lending plays an important role in DeFi. In fact, decentralized lending is a protocol with a very high degree of freedom. On the one hand, the project can rely on its own lending function to easily enter the stable currency market with huge demand; on the other hand, it can also be long and short by lending assets. Wait for the realization of derivatives transactions. In this way, there is still a lot of room for imagination of loan agreements, but the current mainstream loan agreements are still not satisfactory.
Moat of DeFiner2.0
After implementing the basic lending function of version 1.0 which has been running stably for a period of time, the DeFiner 2.0 version, which has added many new features and upgraded privacy, security, governance, etc., will be released soon. In fact, after the loan agreement has a mature model that has been verified by the market, the question left to DeFiner 2.0 is: how to improve the function and innovate the mechanism on the existing basis?
Richer deposit and loan options
At present, the lending assets supported by mainstream lending agreements are mostly currencies with higher market value and wider consensus, which have greater limitations and cannot mortgage low-liquidity assets or off-chain assets for loans. In response to this pain point, DeFiner stratifies the fund pools of different risk levels, and personalizes their mortgage rate, interest rate and other parameters to manage the default risk. At the same time, it realizes the interconnection between the pool and the pool to satisfy Liquidity requirements, and maximum capital utilization. The launch of DeFiner 2.0 can more diversify to meet different borrowing needs, such as NFT, mining, computing power, corporate and personal credit and other generalization as collateral. Enterprises, mines, project parties and even individuals can issue debt financing on DeFiner. In this way, more massive off-chain assets have the opportunity to interact with on-chain assets, and the universality of the project is greatly increased, not just limited to the cryptocurrency industry itself.
In addition to the diversity of mortgage assets, DeFiner also gave a different answer to the choice of deposit and loan.
Take AAVE as an example. Although the borrowable amount in mainstream lending agreements is high, not all deposit interest rates are satisfactory.
The fourth column from left to right in the figure is the deposit interest rate
In this regard, DeFiner has also optimized: 80%-95% of the unlending deposits (floating according to market conditions) will be deposited into agreements such as Compound to generate additional income, thereby ensuring that the loanable amount meets the market Under the premise of demand, the interests of depositors are maximized.
DeFiner also provides personalized services to lenders. Lenders can not only use the various off-chain assets mentioned in the above article as collateral, but can also put forward personalized requirements, such as loan amount, term, and expected interest rate.
In addition, the lender can also directly repay the loan with collateral. The lender can give the third-party liquidator a 2% fee and let the liquidator repay the loan, and the liquidator can purchase the mortgaged assets at a discount of 2%.
In terms of the needs of both deposits and lenders, DeFiner can be said to have hit the pain points of the current decentralized lending market, and the services it can provide cover a considerable proportion of rigid needs. But for such a complex and innovative mechanism design, it is not enough to have a good team. Financial risks are always difficult to predict, and the design of security mechanisms is particularly important at this time.
Higher security
DeFiner’s implementation on the chain includes functions such as mortgage of off-chain assets and peer-to-peer lending. What tests the completeness of smart contracts and the ability to resist financial risks.
In terms of smart contracts, DeFiner has conducted three rounds of code audits (this audit was completed by Conesnsys Dillegence) to eliminate existing potential risks and greatly reduce the financial problems that may be caused by code vulnerabilities. In addition, DeFiner cooperates with Nexus Mutual, the leading project of the current decentralized insurance agreement, to provide up to 20,000 US dollars of security against smart contract breaches for every account with a balance of more than 5,000 US dollars.
For the control of financial risks, DeFiner not only continued the over-collateralization strategy commonly used in lending agreements (the current network mortgage rate is 60%, which can lend out 60% of the value of mortgage assets), but also set up $500,000 in the initial stage of the project The security insurance fund is first responsible for any design or security breaches.
DeFiner’s investment in protocol security, especially double insurance for smart contract risks, has given users more protection for the safety of funds.
More convenient operation
A common problem with existing DeFi protocols is that they are unfriendly to use, and this unfriendly experience is not only inconvenient for ordinary users, but it is also easy to cause permanent losses due to operational errors. There is liquidation like a loan agreement. Risky projects require a real-time and convenient user experience.
On this issue, DeFiner will launch a mobile DApp to improve the user experience.
The problem that the mobile DApp solves is not just that you don’t need to turn on the computer in real time. The existing web interface needs to be connected to the wallet for operation, and the mobile application has a built-in cross-chain wallet. After depositing tokens, users do not need to repeatedly connect to the wallet to store and store encrypted assets on different chains. Lending greatly improves the convenience.
According to official disclosures, the mobile version of DeFiner will also support Apple Pay, making users more efficient in the purchase and monetization of stablecoins. In this way, users’ problems in purchasing encrypted assets, conducting mortgage lending, and asset cross-chain transactions have all been solved in one stop.
DeFiner’s future
The key word of DeFiner in the future is “product power”, and the two most anticipated points come from the mortgage of off-chain assets that will be realized in 2.0 and the cooperation with OKExChain and other public chain ecosystems.
Off-chain asset mortgage
After a period of testing and iteration, the current version of DeFiner has achieved smooth and safe lending functions. According to official information, DeFiner 2.0 will realize the function of collateralizing low-liquidity or off-chain assets. At the same time, the mortgage of this type of assets, fixed-term, fixed-rate and other personalized lending products will also be launched.
The on-chain of off-chain assets is a very important proposition for DeFi. The volume of off-chain assets is much larger than that of encrypted assets, but how to capture their value, how to price them on-chain, and how on-chain liquidation operations can be implemented off-chain are all issues at hand. In what way DeFiner will implement this function is worth looking forward to.
Multi-chain ecology
Like the mortgage of off-chain assets, the opening of cooperation with the exchange’s public chain is also an aspect of “product power.”
DeFiner is a cross-chain lending financial network, and OKExChain is the first step to start DeFiner’s cross-chain. In the future, it will gradually support other public chains such as BSC, Near, Conflux and so on.
We believe that the future DeFi ecology will inevitably coexist with multiple chains. Each chain is an ecology with its unique characteristics, degree of decentralization, TPS, ecological participants, etc. will have its own characteristics. However, different chains will be cleverly linked together. ETH is the bottom layer of the existing public chain, linking different EVM-compatible public chains such as OKExChain, BSC, Polygon, Near, Conflux, etc. DeFiner plays a role in linking different public chain ecosystems and opening up cross-chain asset financial interoperability. Players with different amounts of funds have public chains that adapt to their use.
Supporting more public chains will further enrich DeFiner’s ecology, and its own design can theoretically meet the interaction of all tokens in different ecology, and it is also a good supplement to the ecology of public chains.
More possibilities
In addition to the improvements to the lending agreement itself, DeFiner is also exploring aspects such as user privacy and DAO governance.
At the privacy level, the solution provided by DeFiner is to use the built-in smart contract of the agreement to host user assets, so that users will not reveal the deposit and withdrawal addresses when transferring funds within the agreement, and realize the protection of user privacy; at the governance level of DAO, DeFiner will Based on the voting mechanism, the smart contract including the establishment of seminars, the promotion of the establishment of voting procedures and rules, and the strong FIN holder community are adopted to maintain and promote the stability and development of the agreement and ecology.
Since the development of DeFi, it has shifted from the competition of technology and mechanism to the competition of product power.
Just as it is meaningless to copy another bitcoin, products in the DeFi field should pay more attention to how to attract incremental users in the circle or even users outside the circle, rather than using various profit mechanisms to grab existing users. On top of the existing lending agreement, DeFiner 2.0 increases the choice of deposits and loans, improves the convenience of operation, and makes decentralized lending more than decentralized assets. These product-level innovations; and in the agreement Above, thinking about user privacy and decentralized governance is exactly what the DeFi track lacks.
