Under the ForTube platform, Bond, Bank, and QIAN are not only improving the DeFi user experience, security, stability, and governance, but are also planning to integrate them into a whole, realize the closed loop of the internal cycle of the economy, and gradually move towards ecological self-profit.
Author: face-to-face
I have been looking for an idea worth billions of dollars hidden under my nose, and DeFi is just such an idea worth trillions of dollars, maybe even millions of billions, depending on how you measure it.
——Peter Thiel, venture capitalist
Since the halving wave of mainstream cryptocurrencies such as Bitcoin in the first half of the year came to an end, the entire crypto industry has recently focused on DeFi. However, DeFi is still in its early stages of development, and it is still far from large-scale applications. This article will focus on how the world’s leading DeFi lending platform ForTube builds its own DeFi product matrix (Bank, Bond, QIAN), and how to lead DeFi to a broader market through the integration of internal and external cycles.
New DeFi Situation: Economic “Inner Loop”
DeFi (Decentralized Finance) refers to financial services based on blockchain and smart contracts. The main advantages are to make financial services trustless, anti-censorship, permissionless and open source.
On March 12, the sharp decline in the cryptocurrency market and the abnormal blockage of the Ethereum network caused DeFi’s domino reaction, when DeFi was teetering on the edge of the “cliff”. After just five months, DeFi’s total lock-up volume has not only recovered to the level before the 3.12 incident, but also reached a new high. As of the time of publication, the value has reached more than 18 times the level before 3.12.
According to the graph of DeBank in the past year, it can be seen that the March 12 incident hit the DeFi lending market almost back to its original position. On September 3, it reached a total lock-up volume of US$12.59 billion, and is gradually reshaping the peak of the market. At the same time, many DeFi projects performed particularly dazzlingly, showing a good price increase. However, events such as March 12 and hacker theft of coins also remind us that DeFi is not yet mature enough for commercial applications. How to help investors gain income and maximize asset security is a permanent proposition. The following are the current challenges facing DeFi:
- The immature application logic of smart contracts leads to vulnerabilities and attacks;
- Liquidity risks still exist, and the market may face insufficient depth, insufficient liquidity and a run crisis at any time;
- The lack of standardized product benchmarks makes it difficult to guarantee user experience and risk control;
- Credit problem, lack of strong product safety endorsement.
At present, in addition to the urgent need to solve the above problems, further upgrades are needed: forming an “inner loop” of the DeFi ecosystem. Because DeFi has similar attributes to traditional finance, the mature model in the traditional financial market points out the direction for the future development of DeFi to a certain extent. The ForTube platform, through its three business segments, ForTube Bank, ForTube Bond, and QIAN, is approaching in this direction to provide services such as Token storage and lending, investment, and financial management to form an ecological “inner loop”.
ForTube “inner loop” matrix, affecting digital economic life
There will be some key links in the mechanism of realizing economic “inner circulation”: stable currency, good enough investment channels and fund management channels. Comparing the above regulatory measures, there is a one-to-one corresponding part on ForTube. “Stable currency” is regulated by QIAN; “good enough investment channels and capital management channels” are to increase investors’ investment opportunities and reduce risks. The point of advice is to implement ForTube Bank and ForTube Bond to help investors grasp as many investment opportunities as possible under the premise of controllable risks.
ForTube Bank: Decentralized Bank
Since its inception, ForTube has determined to cover 30% of the entire DeFi lending market share. Bank, as one of the three important sections of the ForTube platform, mainly provides services such as deposit and lending agreements for encrypted digital currencies. It supports deposit and withdrawal, and borrow and return. At the same time, it also uses smart contracts to obtain or repay interest, mainly because of low service. Risk appetite investors. Bank mainly controls the balance of the lending market by establishing an interest rate model, automatically controlling interest rates through market behavior, and adjusting supply and demand, so as to ensure that the development of the entire lending capital pool is in a healthy range by regulating the total scale of borrowing and capital supply.
ForTube 2.0 was launched on September 7, and many core functions have been upgraded, including support for popular digital assets such as YFI, YFII, FOR, SNX, NEST, LEND, and upgrade of algorithms and ledger structure. Gas fees will be greatly reduced. ForTube 2.0 adopts an original off-chain audit system, which can conduct 7×24-hour uninterrupted audit of contract assets to protect the security of user assets in all aspects. At the same time, using the industry-leading safe and upgradeable system architecture, each system module can be flexibly upgraded under the decentralized governance management system to achieve functional iteration and security updates, which greatly improves the product experience and maintainability Sex. In terms of security, the team hired SlowMist, CertiK, Paidun, etc. to provide code audit services for ForTube. ForTube 2.0 will also adopt a new mining model, including net asset mining, to maximize users’ expected benefits. In addition, ForTube 2.0 will enable high-quality asset voting for listing and FOR’s staking function, which will better promote the application scenarios and value empowerment of FOR.
ForTube Bond: Financial Advisor in the Blockchain
Bond is an encrypted digital bond solution created by the ForTube platform. It aims to solve financing problems in the system, including credit rating, bond issuance, bond clearing, bond trading, and modular community governance. Bond plays a role similar to FA (Finance Advisor) in traditional financial institutions, that is, it is responsible for assisting in project financing after investigating the project. The difference between the two is mainly reflected in: Bond is a decentralized segmentation step operation, such as FA central agency rating; at the same time, Bond is not targeted at a specific group, and all market participants can freely participate in it, while FA serves specific investment institutions . But the essence is the same: to solve financing needs.
In order to ensure the rationality of the financing process, Bond has set up the following procedures:
1) First, we need to make a bond credit rating to provide investors with investment advice. It includes community ratings and professional ratings. Community ratings account for 40% and professional ratings account for 60%.
2) After the bond credit rating is completed, it will enter the bond issuance link. Bond issuers can issue bonds according to their needs. Bond certificates are based on Tokens issued by Ethereum, namely BondTokens. BondTokens are investment certificates obtained after investing in bonds. They can be transferred at will, but they are indivisible. The nominal value is usually 100 USD.
3) Exit process: normal bond settlement, liquidation and secondary bond trading
Normal process: The issuer will generally settle the promised bond within a certain period of time. If the market fluctuates greatly, it will enter the liquidation link when the value of the pledge drops by more than 30%, and a specific liquidator will conduct the liquidation.
Bond trading allows users to freely trade and convert rights in the ForTube platform’s bond market in the future. The quantity and price in the secondary market transaction can be adjusted.
We summarize the characteristics of Bond into the following four aspects:
- Distributed credit rating system. By combining the rating standards of communities and professional institutions, community members and rating agencies participate in the market independently and are unspecific. Finally, participants in the market freely participate in a rating system, which can effectively avoid centralized rating. The power tendency phenomenon provides investors with a neutral criterion.
- Rich types of currencies. In order to meet the asset matching needs of investors with different risk preferences, the platform supports the issuance of bonds in currencies such as ETH, HBTC, FOR, HT, OKB, BAT, ZRX, imBTC, REP, and CRO. It is understood that the community will vote in the future. Introduce more currencies.
- High mortgage, reduce the risk of investors. Corresponding to different multiples according to the liquidity and risk of the pledge, to maximize the repayment ability of the issuer.
- Humanized liquidation mechanism. The settlement and withdrawal mechanism has two main points: 1. The value of the pledged property drops by 20%. The issuer should cover the mortgage. If it drops by more than 30%, it will enter the liquidation link in advance and start the calculation link; 2. At the same time, the liquidator will adopt The discounted liquidation model is used to protect the income of investors, and generally guarantees the promised income, except that the market is too volatile to be realized.
Modular community governance is the ultimate management system to be implemented by the ForTube platform. In the future, the ForTube platform will be managed by the community, returning power to the market and letting the market make its own decisions. In the early stage of the project, for the rapid development of the project, ForTube developers were maintaining and managing the ForTube platform.
QIAN: A stable coin that retreats into progress
As far as we know, there are three types of stable currencies in the market: fiat currency reserve-backed, risky asset over-collateralization, and algorithmic central bank. QIAN adopts the currency swap system, which combines the advantages of both risk asset over-collateralization and legal currency reserve support. It replaces QIAN with the over-collateralization of mainstream cryptocurrencies such as ETH and BTC, and anchors the RMB on the exchange rate. It is somewhat similar to the Hong Kong dollar issuance mechanism. Banks hold users’ encrypted assets and control the market price by controlling the issuance and recovery of QIAN to ensure the adequacy rate of QIAN in the market.
So how to get QIAN?
Similar to DAI (Maker DAO’s stable currency), investors can lock a certain amount of cryptocurrency (such as ETH) as collateral for borrowing DAI (pegged to the US dollar). For ForTube platform users, they only need to lock the excess encrypted assets to QIAN’s smart contract, and they can get the QIAN stable currency equivalent to legal tender, without cost and interest. At the same time, QIAN is regarded as a smart contract for encrypted assets. The holder’s currency exchange certificate, the smart contract under this mechanism is named CSA (Currency Swap Agreement).
The most obvious advantage of QIAN compared to DAI is that it does not require minting fees and does not show the minting crowd; in addition, QIAN has an over-collateralization mechanism, a smooth arbitrage liquidation mechanism, and freezing and liquidation, which can reduce risks in extreme market conditions; QIAN price The anchor of RMB can reduce the loss caused by the exchange rate difference between the US dollar and the RMB; the debt auction will compensate for the loss according to the user’s risk priority; it is not limited to the single use scenario of DeFi.
The following are the advantages of QIAN:
Lightning loan: QIAN supports the provision of lightning loan services to the outside world, obtaining additional income by operating the encrypted assets locked in the QIAN smart contract, and repurchasing the governance tokens of the QIAN system. Governance tokens are locked into the smart contract that preserves the income of the QIAN system, in case the global asset adequacy ratio is insufficient to make up the difference in the auction.
Strict risk control:
- The value of locked encrypted assets is greater than 150% of QIAN;
- When market conditions plummet, the user’s CSA adequacy rate will decline. During the decline, CSA has two changes: an early warning state and a freezing state. Users need to lock up their positions for unfreezing, and cannot redeem them before that, otherwise they will go into liquidation and auctions to make up for the adequacy of reserve assets;
- Price fluctuation buffer mechanism. This mechanism can automatically adjust stablecoin equilibrium parameters for liquidation and mortgage operations based on volatility indicators to deal with extreme market conditions and effectively buffer market fluctuations;
- Smooth arbitrage liquidation mechanism. The design of the clearing mechanism can not only encourage all CSA holders to replenish their reserve assets, but also make the speed and quantity of frozen assets cleared more smoothly, so as to slow down and reduce the losses suffered by individual users as much as possible.
- Community of Destiny: Debt Auction. In order to maintain the intrinsic value of the QIAN system, the system’s global asset adequacy ratio is less than 100%. The system will unlock the governance tokens and make up the balance of the overall reserve assets through auctions as a bottom line, so that the overall adequacy rate of the system returns to the safe line Above, restore the intrinsic value of QIAN.
The last line of defense: global liquidation. If the market surges and falls frequently, the debt auction will still be unable to compensate for the reserve asset adequacy ratio of the entire system, and a global liquidation will be initiated. In the global liquidation state, the QIAN stablecoin system will first freeze all CSAs, and will redeem its own locked assets according to the priority of the contract.
QIAN’s philosophy is mainly based on high risk control to protect investors’ participation in a retreat-oriented approach. Looking back at the replacement of excess lock-in, price fluctuation buffer mechanism, debt auction and RMB anchoring, etc., they all fully protect the risks of user collateral and prevent extreme market situations. On this basis, users can use QIAN for cross-border payments, consumer payments, asset transactions, lending activities and other living economy, and its payment advantages of borderless payments, low fees, transparency, and low volatility can make up for the legal currency to a certain extent. Of inadequacy.
To sum up, Bond, Bank, and QIAN jointly empower the cycle in the digital era, and their respective parts are: Bank provides decentralized bank wealth management services, Bond provides financing and wealth management products, and QIAN provides stable coins to achieve consumption scenarios. The three forms a complete ecological closed loop, which is formed by asset management, investment and use, so that users can well loop inside the ForTube platform.
In macro-control, the stability of currency is of vital importance, and ForTube ecology is no exception. So how does QIAN achieve it?
ForTube’s stable ecological country under QIAN macro-control
We all know that if QIAN’s supply growth rate is too high, inflation will occur, which will cause ForTube ecological instability, and it will not be conducive to the healthy development of internal circulation. In the process of financial macro-control, only by providing a moderate growth rate of money supply for economic development, minting institutions will achieve the goal of price stability and will be conducive to the long-term sustained, rapid and healthy economic development. In this regard, we noticed that QIAN has three major killers to control its normal market circulation, ensuring the adequacy rate of QIAN while keeping the value of QIAN in the hands of users from depreciating.
The oracle strictly controls the adequacy rate. The prediction opportunity judges which stage the adequacy rate is based on price fluctuations, and controls the QIAN adequacy rate by warning reminders, debt auctions, and coinage.
Price fluctuation buffer mechanism. QIAN will automatically adjust the liquidation and mortgage operations based on the volatility index, that is, use the past market rules as an important indicator to observe fluctuations and help QIAN buffer prices.
Bottom protection. In the event of extreme market conditions, the encrypted assets locked in the QIAN smart contract will be replaced with governance tokens for additional revenue, and the governance tokens provided by the QIAN governance committee will be auctioned. This part of the revenue will be used to make up for the reserves of the entire system Asset adequacy ratio.
So how is QIAN different from other stable coins? Where is the advantage?
Comparing QIAN, DAI and USDT, QIAN’s advantages are mainly as follows: users have no cost, low risk, strong ecological development potential, and a relatively broad target market. For the long-term development of stablecoins, high stability and wide ecology are the keys to future success.
Way out of the circle: the integration of inner and outer circulations, the inner circulation is the main, and the outer circulation is the supplement
Under the ForTube platform, Bond, Bank, and QIAN are further improving the DeFi user experience, security, stability, and governance. The three are still planning to integrate into a whole, realize the economic inner circle ecological closed loop, and gradually move towards ecological self-profit . At the same time, QIAN is aiming at a larger market in its ecological support to prove that ForTube continues to introduce more external real economy and empowerment to promote a greater ecological cycle, because only the integration of internal and external cycles can make Blockchain is out of circle, DeFi is out of circle, ForTube is out of circle.
