Aave and Compound enter the B-end market. How does Acala’s HyFi differentiate the competition?


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The door of the DeFi B-end market has been knocked open. Who can win this new war?

Written by: Kelly Yang

In the first week of Q3 2020, well-known DeFi applications Aave and Compound also announced that they will formally incorporate the B-end market into their future plans. This trend will also become the “standard configuration” for more and more DeFi platforms. As early as May, Acala cooperated with U.S. mobile bank Current to express support for users to use U.S. dollars to obtain revenue from the DeFi market with one click, opening a new round of DeFi market growth engine window period-from the C-end market that focused on rapid trial and error in the past. A more secure, efficient and compliant diversified financial market.

With the gradual disappearance of the demographic dividend of Ethereum’s DeFi, the lack of growth has promoted the transformation of the market layout. For Polkadot’s DeFi ecology, the dilemma of forced transformation, but the beginning of the use of stable assets to obtain more in the liquid market The market return of the portfolio. Therefore, before the launch, Acala provided a diversified financial paradigm HyFi (Hybrid Finance) for the B-end market. Both Internet banks and financial technology companies have the opportunity to use Acala’s core infrastructure to obtain cross-chain DeFi market dividends.

HyFi (Hybrid Finance), let finance return to its essence

In the face of the competition between DeFi and CeFi, Acala’s choice is HyFi.

CeFi’s unique advantages are its high flexibility and quicker adaptation to customer needs. On this basis, DeFi has a higher degree of trust and avoids black-box transactions. However, in the face of the public, the user experience is relatively at a disadvantage. The essence of HyFi is to use The concept of fusion symbiosis allows all capital to flow freely and efficiently like a river. Current and Acala also intend to do this. They will truly shorten the efficiency gap with traditional financial efficiency with efficient, secure, and decentralized services.

As a Polkadot DeFi platform, Acala integrates decentralized over-collateralized lending, DEX, release Staking liquidity products, network liquidity incentives and other functions, and based on the Substrate framework, it also provides developers with EVM and WASM smart contract modules, which greatly Reduce the cost and difficulty of developers in the development and operation of the public chain. More importantly, while Acala enjoys Polkadot providing secure relay chain services, it will also use cross-chain to achieve more asset portfolio income. Take BTC as an example, if you want to use BTC to enjoy the benefits of the secondary market at the same time You can also get DOT Satking income or DOT LP income, you can pledge BTC on Acala in exchange for aUSD, and then exchange for LDOT from DEX to enjoy staking income. You can enjoy combined income in two steps. If LDOT is then Acala DEX Provide liquidity, it will also have additional income increase in transaction fees and liquidity incentives.

Aave and Compound enter the B-end market. How does Acala's HyFi differentiate the competition?

And Current will directly integrate Acala’s series of out-of-the-box DeFi products into its core products to achieve a bridge between its proprietary core banking platform and decentralized open platform, thereby forming a transparent, fair and complete Financial services closed loop. Current and Acala are currently launching the “Yield Engine” that combines traditional finance with DeFi, which means that in the future, users can use their bank cards to consume the income generated by DeFi in their daily lives, and they can also transfer their own U.S. dollars. The savings are used in DeFi and other scenarios where CeFi and DeFi are combined to enjoy the diversified dividends brought by DeFi and achieve the effect of 1+1 greater than 2.

This cooperation between Acala and Current will become an “accelerator” of the HyFi (Hybrid Finance) service infrastructure, which will not only help nearly 3 million members on the Current platform capture more value, but also allow the DeFi world to acquire richer assets. The type and volume have promoted DeFi to truly enter the traditional financial world.

Elephant awakens, dislocation competition under supervision

In contrast to today’s global economy, investment in the next 5 years or even longer is more important to “circulation value”, and institutions will also give DeFi greater market appeal and imagination. Acala, as a cross-chain DeFi infrastructure, will help more and more financial institutions overcome technical barriers to capture value in a timely manner to achieve better liquidity. As the Internet finance industry ushers in the era of strong supervision, DeFi will be promoted under the premise of standardized innovation. Standing on the same starting line with traditional finance, complementary development and dislocation competition.

I believe that similar regulatory frameworks and differentiated positioning in the future will give DeFi a more foundation for cooperation with traditional financial institutions. Cooperation with giants will also further enhance DeFi’s competitiveness in the financial market and serve different markets and customer groups. The HyFi model allows traditional finance to be adapted and compatible with DeFi, helping customers use limited resources to obtain more combined income in the liquidity market, and in turn helps giants activate the database and use real-chain transaction data to build better Risk control data.

In the face of the future B-end market containing DeFi gold, HyFi can only win this war if it continues to cultivate.

Disclaimer: As a blockchain information platform, the articles published on this site only represent the author’s personal views and have nothing to do with ChainNews’ position. The information, opinions, etc. in the article are for reference only, and are not intended as or regarded as actual investment advice.

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