DeFi second half: an overview of Polkadot’s DeFi ecosystem

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Lianwen categorizes and summarizes Polkadot’s current DeFi projects from five dimensions, and analyzes its DeFi ecosystem more comprehensively and systematically through the “settlement layer-protocol layer-application layer”.

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Cross is regarded as the leading chain of Polkadot (Boca) is one of the few still able to focus attention away from the etheric part of the Square after the fire DeFi market focus, the second half of 2020, the Ethernet Square DeFi Another development in full swing In the corner, the ecological construction of Polkadot DeFi is also in full swing.

According to PolkaProject statistics, the current number of Polkadot ecological applications has reached 310 , covering fields including underlying technologies, wallets, oracles, NFTs, DAOs, smart contracts, bridges, DeFi, Internet of Things, and games. Among them, there are some based on Substrate. 97 projects, accounting for 31.29%. How many DeFi projects are there? How is the current development? What category do they belong to? What changes did Polkadot bring to the ecology? This article will take readers at a glance at the current status of Polkadot’s DeFi ecosystem.

Substrate’s modularity and flexibility are highly compatible with DeFi infrastructure requirements

Substrate is a building block chain framework can be optimized easily create custom block chain for a unique scene. Substrate is completely modular and flexible: ready-mix and match components and build the core business logic, while the rest of the left frame. And a final consensus networks like such a certainty plug and play modules, so that developers are free to focus on specific areas of expertise, thus saving considerable time and effort in the development process. Stay lean by implementing only the necessary functions on a custom blockchain.

With Substrate’s fork-free upgrade and transparent governance tools, new features can be added over time without worrying about network forks, and enjoy an easier and risk-free upgrade. In addition Substrate also provides native support for direct connection of Polkadot, Substrate tool Cumulus will also unlock inter-link communications, collaboration and sharing of safety.

At present, Substrate has been updated to version 2.0 . The blockchain framework now includes Off-Chain Workers and more than 70 composable modules, and is optimized for building blocks that are compatible with Polkadot and can be put into production The chain lays a solid foundation.

Benefiting from the development of Polkadot, the number of its developers will increase sharply in 2020. According to the ” Blockchain Developer Report ” recently released by the crypto venture capital firm Electric Capital , compared with the 189 developers in the third quarter of 2019, as of the third quarter of 2020, Polkadot has 384 developers. A year-on-year increase of 103% .

DeFi second half: an overview of Polkadot's DeFi ecosystem

Among them, the number of developers of Polkadot ‘s ecological decentralized financial center and stablecoin platform Acala has increased by 200%. At present, Acala has launched a series of DeFi financial products : such as the stable currency system of decentralized excess mortgage lending, staking derivatives, decentralized exchanges and other Layer 1 core modules.

DeFi second half: an overview of Polkadot's DeFi ecosystem

By establishing a set of cross Boca chain underlying architecture that allows access to all the different types of block chain of this architecture can work together. This means that only a rich enough ecological project can interact well in this decentralized system to realize the true potential of the system.

Five dimensions to analyze the current situation of Polkadot DeFi ecology

The current of Boca DeFi chain projects based on collation and summary smell, will be divided into cross-chain (transfer bridge), oracle, applications, DEX and wallet five, to analyze its ecology.

DeFi second half: an overview of Polkadot's DeFi ecosystem

Cross-chain / transfer bridge

Boca messaging using cross chain (XCMP) for asynchronous communication between the parallel chains. With XCMP, it is possible to send messages that do not require a response (but it can be guaranteed that the receiving chain will act in accordance with it), or to communicate that requires returning certain specific information (such as the return value of a function called on the receiving chain).

DeFi second half: an overview of Polkadot's DeFi ecosystem

In simple terms, XCMP play a role in Boca system “bridge”, similar to the commonly used Internet TCP / IP protocol that allows messaging between the various parallel chains Boca, and support components on parallel chains of these were Interactive.

The transfer bridge provides the possibility for the blockchain outside the Polkadot system to interact with the Polkadot ecological cross-chain. Most of the projects in the Polkadot ecology are based on the Substrate framework and have greater flexibility in the customization of blockchain network components. Through the native cross-chain support for Polkadot’s DeFi ecosystem, various applications can be successfully built, even relative to Ethereum. Greater flexibility.

In this category, the main representative projects are PolkaBTC , the first Polkadot ecological bitcoin anchor currency, the asset cross-chain project represented by ChainX , and the transfer bridge project Darwinia positioned in Polkadot .

DeFi second half: an overview of Polkadot's DeFi ecosystem

PolkaBTC is DeFi interoperability platform Interlay launched the first no need to trust anchor currency bitcoin, allows users to 1: 1 casting Bitcoin to support asset PolkaBTC Polkadot block chain, and is widely used in DeFi Boca.

The PolkaBTC Alpha testnet was launched on December 9. This version allows users to mint and redeem the first PolkaBTC and connect to the BTC Parachain (“Bitcoin Parachain”) testnet. According to the roadmap previously released by Interlay, BTC Parachain is expected to be launched in February or March 2021.

The ChainX mainnet was officially launched on May 25th. It mainly adopts the ecological technology system of the cross-chain project Polkadot, and integrates and transforms inter-chain assets through decentralization. The goal is to break the inter-chain asset barriers and achieve multi-currency An integrated public chain ecology.

Currently ChainX has successfully updated the mainnet to Substrate 2.0 version. The new hybrid version will feature Boca consensus mechanism, and at the same time open control functions on the chain. The ChainX 2.0 independent chain will evolve from Kusama Parachain, Polkadot Parachain, Polkadot Level 2 Relay Chain.

Darwinia is a cross-chain bridging network developed based on Substrate, focusing on building a future asset interconnection network, including the non-standard asset auction market, stable currency cross-chain, asset exchange and other fields. Darwinia light using a super linear alkylene client implemented external perception stranded state, instead of the current half or more central to the center of cross-chain solutions.

Currently Darwin Square Ethernet-way across the Chain Bridge officially opened, Darwin main network also progressive on-line. According to the official introduction, Darwinia will open the “Ethereum-Darwin two-way cross-chain bridge/transfer” in the third phase and ” multi-directional cross-chain ” in the fourth phase.

Oracle

DeFi block chain systems rely on trading and lending encryption currency, and oracle as an important mechanism to get data from the outside, is to maintain the normal operation of an essential part of DeFi. In the field of oracles, Chainlink is recognized as a leading project. Common oracles include Tellor, nest, and Band Protocol.

DeFi second half: an overview of Polkadot's DeFi ecosystem

The current oracle projects in the Polkadot ecosystem include Zeitgeist, ZK Oracle, PolkaOracle, Kylin Network, Clovyr and Noise Explorer.

DeFi second half: an overview of Polkadot's DeFi ecosystem

Among them, the privacy oracle machine ZK Oracle will be designed and developed based on the SERO chain in the initial stage, and will support Turing’s complete smart contract platform on SERO.

Before the main network functions Boca formally launched, ZK Oracle will also maintain the original anonymous solution, followed by ZK Oracle will migrate to Substrate chain across the underlying architecture to continuously improve ZK Oracle functions.

It is worth noting that Polkadot officially announced that it will integrate Chainlink oracles as the price feed source for all blockchains in the Polkadot ecosystem. Polkadot has become the first non-Ethereum ecosystem blockchain supported by Chainlink and said that it will use Chainlink oracles. The introduction of Substrate and the Polkadot ecosystem is an important milestone, and Chainlink has officially become an “interface across various blockchain platforms.”

In addition, Acala, Laminar and decentralized cooperation oracle Band Protocol published “open oracle gateway” (Open Oracle Gateway), the specific features include support for multi-oracle network, you can choose what you want prices sources of feed, feed price oracle quality of service (QoS-quality of service) mode and other free services and fees, which means that in addition to Acala operate their own oracles and the provision of services other than feed prices, the oracle gateway program allows multiple participants to join.

DEX

The Homa protocol between Zenlink and Acala is a well-developed DEX project in the Polkadot ecosystem.

DeFi second half: an overview of Polkadot's DeFi ecosystem

Up to now, Boca ecological chain across DEX protocol Zenlink has announced the completion of cross-link communications between Boca’s first prototype pen parallel chain, and asset-based management within the Zenlink DEX Module module and DEX on the successful implementation of the first truly Use cases for cross-chain transactions. This means that assets issued through Zenlink modules can be transferred across chains based on XCMP messages.

DeFi second half: an overview of Polkadot's DeFi ecosystem

In addition, Polka Eco’s DEX PolkaSwap without custodial AMM mechanism will be launched in the near future. PolkaSwap is based on Hyperledger Iroha v2 and bridges to the Kusama and Polkadot networks, allowing users to conduct digital asset transactions based on Substrate.

As an application on DeFi SORA, SORA flowability distribute mining platform 2% Polkaswap credits PSWAP. In addition, according to official information, PolkaSwap has migrated to Substrate 2.0, the external API is almost complete, and the UI/UX design of its Ethereum bridge is in progress.

Another DEX Polkastarter will be officially launched on December 15th, and the first batch of projects for token sales are already in preparation. Polkastarter is specially established for cross-chain token pools and auctions, allowing decentralized projects to raise and trade funds in a low-price and fast manner, and provides cross-chain, priced block transactions and dynamic price auctions, and supports commonly used ERC- Digital assets other than 20.

wallet

According to Polkaproject data, there are currently 28 wallet projects in the Polka ecosystem, accounting for 9.03% of its 310 applications. These include Polkadot-JS Apps , Polkadot -JS Apps , Polkadot mobile wallet, hardware wallet Parity Signer and Ledger , and multi-chain asset digital asset wallet imToken and HyperPay Wallet .

DeFi second half: an overview of Polkadot's DeFi ecosystem

application

DeFi underlying products are part of the content that users have the most contact and connection with, and are also part of the core of the complete DeFi ecosystem. From here, DeFi financial Lego game officially began.

DeFi second half: an overview of Polkadot's DeFi ecosystem

In Ethereum DeFi, the underlying products include mortgage lending, transactions, insurance, wealth management, derivatives, and other niche applications. Polkadot DeFi is currently not as extensive as Ethereum DeFi, but it also has a series of basic underlying products. The chain news summarizes it as follows:

DeFi second half: an overview of Polkadot's DeFi ecosystem

Borrow

DeFi lending is the cornerstone of the financial system, but also in Ethernet Square DeFi in the earliest mature business model. Currently, there are not many projects that focus on lending in the Polkadot ecosystem, and more have lending functions. This category includes: DeFi aggregation application platform Konomi, Acala’s Honzon protocol supporting cross-chain multi-asset mortgages, the original EOS-based DeFi project Equilibrium, and the lending protocol Akropolis.

Konomi is a public chain based on Substrate. The first and most important product based on Konomi is the application of decentralized lending. With the release of the Polkadot parachain and the effective inter-chain communication protocol, Konomi can support more financial products targeting the Polkadot ecosystem. In the main scenario linkage between the parallel chain applications and benefits across the two scenarios DOT ecological assets.

Acala is the first asset mortgage stable currency issuance platform based on the Substrate framework. At present, Acala’s financial system includes clearing, oracle services, support for cross-chain multi-asset mortgage, release of Staking liquidity, DEX, synthetic assets, etc.

Equilibrium is the original EOS-based DeFi agreement. In September of this year, it announced that it has become a partner with Polkadot. It will use Polkadot’s Substrate technology to build Equilibrium’s blockchain. At the same time, Equilibrium has also won the Web3 Foundation’s second quarter subsidy plan. Subsidy funds.

The goal of Akropolis is to create a distributed financial network protocol that provides people with financial savings and value-added tools that do not depend on geographic locations, counterparties or intermediaries.

It is worth noting that Akropolis was hacked in November and 2 million DAI was stolen by hackers. In the same month, it reached a cooperation with yearn.finance. The details include: Yearn and Akropolis merge development resources and increase TVL (lock-up amount) ; Akropolis can access Year, Pickle and Cream protocols; Year can access new investment strategies and business development experts developed by Akropolis.

Financial management

Wealth management applications including Staking star project providing liquidity Bifrost and Stafi, aggregator asset management products Reef Finance, financial markets and other agreements Definex.

Bifrost Rainbow Bridge is committed to becoming an infrastructure to provide liquidity for pledged assets. Currently, it has launched a derivative vToken for Staking and Polkadot Parachain card slot PLO. vToken can optimize transactions in multiple scenarios such as DeFi, DApp, DEX, and CEX. Through vToken Realize the transfer channel of pledged rights such as staking and PLO, realize the risk hedging of pledged assets, and expand scenarios such as vToken as collateral for borrowing, the staking income can offset part of the interest, and low-interest borrowing can be achieved.

The Stafi protocol solves the contradiction between the security required by the system and the liquidity of its tokens by distributing ABS tokens to staking participants. ABS tokens are the credentials corresponding to the user’s staking assets. When staking is performed, the user will also get the corresponding ABS tokens to facilitate circulation and transactions.

Reef Finance is the first cross-chain DeFi operating system built on Polkadot. It is designed to provide seamless user interface for the user an intelligent aggregator of liquidity and revenue engine, so that traders can obtain liquidity from trading CEX and DEX.

Definex is a financial market protocol based on Substrate, which aims to power open, highly liquid and interconnected decentralized financial applications. Definex by clearing and custody in the chain, the establishment of a multi-store and mortgage lending platform, and trying to build the next generation of multi-asset DeFi protocol across the chain, providing intelligent contracts for the different encryption assets, in order to interoperate within Definex agreement.

Stablecoin

On Ethereum DeFi, the participation of ETH, various stablecoins, and tokens issued based on ERC-20 such as COMP have jointly constructed the layered stacking of DeFi Lego, and participates in this financial game as collateral in countless agreements. In this category, the Polkadot ecology is mainly represented by the decentralized stablecoins Acala and Bandot.

Acala mainly generates stable currency aUSD through over-collateralization, allowing users to send and receive U.S. dollars across any blockchain connected to Polkadot . The Bandot protocol supports the value interoperability between different parallel chains, so that the value on the Polkadot chain can be quickly traded and circulated.

summary

Overall, Boca has been basically has the basic elements of ecological development of DeFi. From the current development point of view, shared security Boca, heterogeneous cross-chain and no bifurcation upgrade features have allowed strong expansion of the network, which is an advantage compared to its Ethernet Square lies. On the other hand, Web3 Foundation and Parity on eco-building project for its support also relatively generous, more conducive to the future to build a team of development and application scenarios.

At present, the auction of Parachain Slots has not yet begun, and various projects are still in the process of exploring and developing. How to expand the core of community and continued innovation, to complete the construction of long-term ecological collaborative, project parties who still think in the future the focus.