Changzhou: The scale of synthetic assets and mortgage assets issued through the blockchain in the future will exceed one trillion US dollars


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Changzhou: The scale of synthetic assets and mortgage assets issued through the blockchain in the future will exceed one trillion US dollars

A few days ago, the “DeFi of DAO——’DeFi New Discovery”” event hosted by DeFi Zhidao opened at the China (Hangzhou) Future Blockchain Innovation Center. Bytom, the founder of Bytom Chain, delivered a keynote speech on “Assets: The Soul of DeFi”.

In his speech, Changzheng said that the most popular DeFi is now DEX, and in the future it may be borrowing, and there may be synthetic assets or stable assets in the future. In particular, it looks like a portfolio of assets such as Balancer and MOV Superconducting V2, because LP will not only enjoy the benefits of system fees, but may also obtain additional alpha benefits due to the strategy of this asset portfolio. Changzheng also made a three-stage prediction on the asset track: the market value of Bitcoin in the future will exceed one trillion U.S. dollars, the value of digital assets issued through blockchain registration in the future will exceed one trillion U.S. dollars, and the future will pass through the blockchain. The issued synthetic assets and mortgage assets may also exceed one trillion US dollars.

The following is the full text of the speech:

The topic to be shared this afternoon is “assets”. I think assets may be the soul of DeFi.

Teacher Ma has been very popular recently. He said that the current mainstream idea of ​​bank loans is still the “pawnshop model”, which is too inefficient. His idea is to use big data as the foundation, replace the current pawnshop thinking with a credit system, and make credit equal to wealth.

Teacher Ma attaches great importance to credit. Of course, this is also a very general direction, but credit itself is not a scientific term because it is difficult to quantify. Although the user’s consumption record big data can be used to give an indirect decision-making reference, but it is not a cure for the symptoms, and the bad debts will still be bad debts.

CeFi VS DeFi

In the DeFi field, mortgage finance is still the mainstream. Although everyone says that the blockchain is a trusted machine, the opposite is that the blockchain just eliminates trust. It does not need to trust anyone. Realize corresponding financial operations. So I think DeFi and CeFi will be very different.

First of all, CeFi believes that the essence of finance is credit, but in my opinion, the essence of DeFi should be mortgage or asset.

From a data perspective, CeFi data is big data, and DeFi data is data on the chain. Big data is indirect data, and the data on the chain is very direct, not only very direct, but also very transparent.

The essence of the platform, CeFi is a bank. Although Ant Financial is positioning itself as a technology company, its positioning is very controversial now, because you look at the essence through the phenomenon. In the final analysis, it is still a financial institution, and it is even better than a bank. More exaggerated. Many people think that the essence of DeFi is a bit like a pawnshop in the past, but I think the “pawnshop” should be put in quotation marks.

From the execution level, CeFi’s asset transfer or recourse is through legal institutions, while DeFi’s execution is automated execution of smart contracts.

Bad debt risk, CeFi’s bad debt risk is relatively large, while DeFi is relatively small, after all, there is collateral.

From the perspective of privacy protection, CeFi is essentially an acquaintance relationship and requires users’ private information, while DeFi is essentially a stranger relationship and does not require any user privacy information.

DeFi is currently the most popular DEX, and in the future it may still be borrowing, and there may be synthetic assets or stable assets in the future. I think no matter from which track, there is a main thread behind it, that is, “asset chain”.

The way we used to think of assets on the chain was to register real assets on the blockchain through the confirmation or authorization of a centralized authority. Such a path is of course very long, because in reality real estate or equity, and other financial assets must be authorized by the industrial and commercial department or the housing management bureau, or opening such a scenario to allow you to put assets on the chain is obviously not realistic. So many people think that the story of assets on the chain can no longer be told.

But now from the perspective of DeFi, I think the story of asset on-chain is established again. Why do you say that? Because it is equivalent to using another ingenious way to realize the asset on the chain, the most successful case is DAI (makerDAO), which generates a new synthetic asset by mortgage digital assets. The price of this new synthetic asset is in line with reality. The realization of anchoring of the US dollar in China is equivalent to the realization of the US dollar on the chain, but such a process does not have real US dollar registration and US dollar transactions, so it is relatively free of legal risks.

Now that we can achieve the chain of USD, we will have stable gold, stable securities, and stable stocks in the future, so I think the story of asset chaining is realized in this way. I have a metaphor that compares this process to the virtual coordinates of discovering assets. We used to be in a plane where assets passed through a fence from the real world to the virtual world, which is the right of a centralized agency. Now we have upgraded digital assets or even synthesized assets, and indirectly realized assets. chain.

Synthetic assets are the general direction of the future

In this way, we can understand it as a kind of balance or leverage. The left side of the balance is mortgage assets, and the right side of the balance is synthetic assets.

There are two types of mortgage assets: 1. First-level digital assets, including Bitcoin, Ethereum, Litecoin and other mining assets are high-quality mortgage assets. 2. Secondary digital assets, including (1) DPoS voting locked assets. (2) LP Token in the AMM liquidity pool. (3) The deposit certificate of the loan agreement. (4) Synthetic assets such as ETFs.

Synthetic assets are divided into the following categories:

(1) Approved quantity: ETFs are the same as stocks in reality, and the number of assets in these packages remains unchanged.

(2) Constant price: The price is anchored to the actual asset price, which stabilizes the dollar, gold, and stocks.

(3) Constant product: Uniswap and other AMMs, which are asset pairs, and assets are the relationship of constant product.

(4) Constant ratio: Unlike Uniswap, it is not two assets, it may be multiple assets, and multiple assets are not a constant product relationship, but a constant ratio relationship, even with some weights, such as Balancer, MOV Superconducting V2 is this type of asset portfolio. Such an asset portfolio is a bit like an index fund in reality, except that the index fund rebalances the asset portfolio through automatic market makers, but the actual index fund is fixed daily, monthly, and weekly Time, the fund manager operates to realize the rebalancing of assets. Such as Balancer and MOV Superconducting V2 realize asset rebalancing through automated market makers every moment, which is a very big direction in the future. why? Because these Balancer LPs will not only enjoy the benefits of system fees, they may also receive additional alpha benefits due to this asset portfolio strategy. Of course, if the asset ratio is not that good, or the strategy fails, you will also suffer the risk of gratuitous loss, so this is a two-way street.

(5) Constant function, such as Curve, MOV superconducting V1, etc. are constant function market makers. Here I will mention three innovations of superconducting V1: First, we extend the CFMM curve to a curved surface, which means we can support one A variety of assets are stored in the reserve pool to realize the mutual exchange of a variety of stable assets. This is our innovation, that is, to upgrade two-dimensional to three-dimensional or multi-dimensional. Second, we optimized the trading curve so that trading slippage is very small. Now, under the size of the 500,000 reserve pool, the exchange rate of 200,000 US dollars is realized. Its transaction slippage is only 2.9 per thousand, and the transaction wear is very small. Third, we have introduced a slippage protection mechanism based on oracles, so that users will not cause huge slippage losses because they ignore external market prices.

MOV universe

What is MOV? MOV is the protocol suite of Bytom DeFi. We use three coordinates to divide the three DeFi tracks, corresponding to transactions, loans, and assets. Today we mainly talk about the asset track. Several synthetic assets have just been defined. In fact, they correspond to each other in terms of coordinates. The positive direction of the asset track indicates stability. The most stable is price-anchored assets, followed by a constant number of ETF assets, and then AMM’s LP Token. assets.

Bytom’s MOV has three main innovations for the asset track: 1. The idea of ​​transaction is transfer, 2. The idea of ​​locking is the coinage, 3. The idea of ​​cross-chain. We have achieved some of these three innovations, such as transaction or transfer. What does transaction means transfer? In the past, the industry generally regarded transactions and transfers as two things, but after we expanded Bitcoin UTXO to BUTXO, these two things became one thing.

The second type of locking is coin minting. This is a huge innovation we want to push in the future. On the left is a high-liquidity first-level asset. There are three main types of pledge or mortgage. 1) Pledge voting will generate a low-liquidity second-level token. 2) Superconducting V1 and V2 AMM pools, mainstream Tokens such as BTC and Ethereum are deposited in AMM pools to generate LP Tokens. This is the second method of locking and minting coins. 3) Loan agreement, which borrows mainstream Token and generates deposit voucher. This process is not over yet. Our ultimate goal is to mortgage low-liquidity secondary tokens to generate high-liquidity assets, which is to mortgage the secondary tokens of the previous three protocols one step further to generate MOV stable coins.

Why should the first three agreements be the pre-protocol of the stablecoin agreement? In fact, some people have mentioned the opposite design. He believes that LP Token can be placed in front of the loan agreement. For example, some people think that DeFi “pawnshop” is not very accurate, because traditional pawnshops deposit low-liquidity assets to lend high-liquidity assets , This is the pawnshop. For example, if you mortgage the heirloom vase to lend the legal currency, this is the pawnshop.

But DeFi’s loan agreement is not like this. It is two-way, deposits are also highly liquid assets, and lends are also highly liquid assets. No one will borrow low-liquidity secondary assets, which is why I now say that DeFi is like a “pawnshop”. But there is only one agreement that is in the opposite direction. It supports you to deposit low-liquidity assets and lend high-liquidity assets, which is the stablecoin protocol. So I think this is a very reasonable design, that is, stablecoins may be all that can generate low liquidity. The final protocol of the second-level Token is the reason why we designed it in this way.

The third innovation is cross-chain. The past cross-chain is the first way: through a decentralized gateway, the assets a and b of the A chain are crossed into the B connection to generate a’and b’. Cross-chain is to achieve two-way, ordinary cross-chain is one-way, and now to achieve two-way, even B-chain asset b can also enter A-chain to generate asset b’. Simply put, by the original MOV assets BTC, LTC, BTM can step into Ethereum to generate corresponding assets, this is the idea of ​​cross-chain.

Finally, for the DeFi asset track or the future development, I make a three-stage prediction: stage one, with 2009 as the key time point, the era of digital currency represented by Bitcoin. In the future, the market value of Bitcoin will exceed one trillion US dollars. In the second stage, in the IXO era of digital assets issued on the blockchain represented by Ethereum in 2017, the value of digital assets issued through blockchain registration in the future will exceed one trillion U.S. dollars. Phase three, that is, in 2020, the DeFi era of generating synthetic assets through mortgage digital assets and mapping real assets. Currently, the scale of assets locked in DeFi has grown from 250 million to 15 billion U.S. dollars. In the future, this number will also increase exponentially. In the future, the scale of synthetic assets and mortgage assets issued through the blockchain may exceed one trillion U.S. dollars.