Users can profit from the liquidation proceeds, help Compound better respond to the black swan incident, and obtain the voting power cScore that determines the upgrade of B.Protocol.
Original title: ” New DeFi gameplay | B.Protocol integrates Compound, allowing Compound users to get more benefits “
Written by: Eitan Katchka
Compile: ElaineW
DeFi lending platform liquidity support agreement B.Protocol will integrate Compound, please see for details.
B. Protocol and Compound integrated interface
Now, Compound users can get more benefits through B.Protocol. Users can profit from the liquidation proceeds, help Compound better respond to the black swan incident, and obtain the voting power cScore that determines the upgrade of B.Protocol.
Users can use simple one-click components to import Compound accounts into B.Protocol and still get COMP rewards.
Below, we will introduce all the information of this integration, everyone can understand the detailed information, choose the method and time of participation.
B. What Protocol Users Can Get
Users who use the B.Protocol smart contract interface to manage Compound accounts can accumulate user scores (cScore). The earlier B.Protocol is used, the higher the score. After 2 months (end of April 2021), part of the liquidator’s income cJar will be distributed to users in proportion to the accumulated cScore score.
Similarly, at the end of the first phase (April 2021), users can start voting on future upgrades, including the revenue distribution model, Backstop membership requirements, incentive models, etc. The voting power of the user’s first vote will be proportional to cScore.
cScore is only assigned to users who use the Compound interface, VC or team will not get cScore in advance.
cScore has been registered on the blockchain and is not transferable; it is not an ERC20 token, and cannot be traded, and it can never be traded.
Technically speaking, there is no way to prevent future governance from tokenizing cScore, but the team will not actively support matters that violate the applicable regulatory framework.
In October 2020, the B.Protocol integration MakerDAO interface was launched. Currently, the total lock-up value (TVL) is about 30 million U.S. dollars, with a single Jar (mJar) and a single user score (mScore). In the next upgrade of the agreement, Jar distribution and voting will be conducted separately by communities.
Safe mode
B. Protocol is designed as a layer above the integrated DeFi loan platform, making user funds as safe as when using the platform directly. The user pays and receives the same interest rate, which is the same as the liquidation penalty for direct use of the platform.
The Compound integration code has been reviewed by Solidified. The report did not find any major issues and confirmed the team’s analysis of the safety of users’ funds.
problem solved
The DeFi ecosystem is growing rapidly and currently (February 2021) holds approximately US$40 billion in assets, but it relies heavily on safe and adequate liquidation procedures. The Dai ecosystem, lending platforms such as Compound and Aave, synthetic asset platforms, and leveraged trading platforms all rely on liquidation to maintain solvency. However, compared with CeFi and Tradfi, the DeFi clearing system is still undeveloped.
When the user debt is about to exceed the collateral, liquidation will be triggered. In this process, the liquidator pays user debts in exchange for part of the collateral. At present, all major DeFi platforms outsource this service to the entire Ethereum community, allowing each Ethereum account to participate in the liquidation process, and provide 3%-8% discounts on liquidation collateral to encourage liquidators to participate.
In general, this is a fair practice, but it brings two main problems: 1) The gas war that leads to the increase of miners’ extractable value (MEV) will eventually reduce the liquidation incentive to zero; 2) due to The uncertainty of potential profits is too high, leading to a lack of responsible liquidators.
Both of these issues are critical to the stability of the DeFi ecosystem, especially in the severe market environment of 3.12 this year.
B. Protocol is a liquidity support protocol, a new type of DeFi Lego. It aims to better handle clearing on the DeFi lending platform and allow the DeFi ecosystem to safely and stably expand to the CeFi level.
B. Protocol encourages liquidity providers (keepers) to share liquidation proceeds with platform users in exchange for priority in the liquidation process. In this way, B.Protocol allows more responsible liquidators to join the platform and help transfer MEV back to the community.
working principle
B. Protocol The project party will integrate the agreement into existing DeFi lending platforms, such as Compound. The user interacts with Compound through a dedicated smart contract interface.
B. Protocol The liquidator obtains priority in the liquidation process by providing a buffer for the user account when the liquidation price is approaching. Here you can read more about how B.Protocol achieves fairness in the liquidation process.
B. Protocol’s simplified process
B. Protocol The liquidator processes the liquidation on Compound, and its liquidation discount (also known as liquidation penalty) is allocated by the liquidator and users. The user’s part is accumulated in cJar and will be distributed among users according to User Score at the end of each stage.
Beneficiary
Everyone except the miners…
Compound users can get value-added liquidation benefits from Compound without increasing risk.
As a lending platform, Compound has acquired new and responsible professional liquidators, bringing more stability to the platform. In the long run, a more stable platform can increase collateral without having to face the risk of insolvency.
Liquidators can obtain better risk management and forecasting capabilities, which motivates them to build better adjustment tools for DeFi lending platforms, and in return for the decline in uncertainty, the liquidators must share the benefits with platform users.
The Ethereum ecosystem has gained another way of mitigating MEV and transferring value from miners back to users.
detail
User rating
User score calculation: The user score (cScore) accumulation rate is related to the COMP allocation rate, user supply and loan balance.
cScore is not ERC20 and is not transferable during the first phase (end in April 2021).
Fair release principle: Any venture capitalist or developer is prohibited from mining cScore first.
Jar
Liquidation revenue sharing: 3/8 (37.5%) of each liquidation premium (at the time of writing, this is 8% of the liquidation scale) goes into the cJar smart contract. The remaining 5/8 is handed over to the liquidator.
cJAR reward distribution: within 2 months of the first phase (scheduled to end in April 2021), cJAR will be distributed in proportion to the user’s cScore.
COMP reward
Compound users are eligible for COMP rewards as if they interacted directly with Compound. You can request COMP directly from the B.Protocol application.
Governance
Two months after the release (end of April 2021), the first phase will end. B. The 100% control of the Protocol smart contract on Compound will be transferred to the community, and the community will have the right to determine the future development path. According to the cScore ratio, the consensus reached by 51% of users will be able to adjust the incentive model and make other decisions.
The first phase of B.Protocol-MakerDAO will end at the same time, and the B.Protocol community with mScore will be able to vote on future development and whether to merge the two or remain independent.
More discussions on future governance will take place on the B.Protocol Discord‌ server.
start using
B. Protocol is an alternative treasury management system. Users will get exactly the same conditions as using Compound or MakerDAO, and will be able to share the liquidation proceeds with the B.Protocol liquidator.
Using the “Import” widget, you can import the vault into B.Protocol with a single click.
If you don’t have a Compound account, please open one. Deposit asset mortgage accounts and borrow preferred tokens through B.Protocol. Please note that each token has a different APY.
As long as you hold funds on the platform, your user ratings will continue to grow.
Two months after the release, the Jar balance (the storage pool for liquidation proceeds) will be distributed based on user ratings;
Users will be able to vote for future upgrades of B.Protocol based on cScore.
A complete tutorial on how to use B.Protocol.
Introduction to B. Protocol
B. Protocol improves the security of the lending platform by incentivizing liquidity providers (keeper) to promise to liquidate unsecured loans and transfer the profits drawn by miners back to platform users. B.Protocol was founded by Yaron Velner, who was the chief technology officer of Kyber Network and the co-designer of the WBTC protocol.
Source link: www.8btc.com
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