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Listen to senior DeFi players such as Sam Bankman-Fried and Shenyu discuss the innovation and transformation of DeFi.
At 19:00 on September 27, 2021, Winkrypto and ChainNews jointly produced the third unit of “The King of Tribal City-2021 Blockchain Live Show”. Interface news is broadcast simultaneously.
DerivStudio CIO Terry Tse, Index Coop Commercial Director Simon Judd, FTX Co-founder and CEO Sam Bankman-Fried, Serum Consultant Edward, Cobo Co-Founder and CEO & F2Pool Co-founder Shenyu, SevenX Ventures Founding Partner Liu Qi, Acala Global Community Contributors Kelly, Head of NEST LABS Tina Zhang, Kava Global Business Development Vice President Aaron, Synthetix Greater China Head Dorothy Liu, Kine co-founder and CEO Wang Lei will have an in-depth discussion on the topic of DeFi, bringing you 3 topics Speeches, a dialogue with industry leaders and a round table dialogue.
This article is a collection of live broadcast highlights, and the content has been edited.
Keynote Speech | On the Sustainability of DeFi
Speaker: DerivStudio CIO Terry Tse
Most economic activities in the world are actually still out of the blockchain. It is controlled by traditional capital. For DeFi to go beyond pure speculation, traditional capital must be continuously injected. Today, one of the important forces driving traditional capital into DeFi is the decline in sovereign credit, and DeFi is such a suitable place to build trust, but DeFi must overcome some structural challenges in order to continue to attract traditional capital. First, the volatility is too high, it is difficult to short, there is almost no fixed income, and there is no lender of last resort.
I don’t think derivatives are financial weapons of mass destruction, and managing derivatives portfolios is not a simple matter. Encrypted assets are different from stocks and other assets. It is very unique. So it is difficult to have only standard options and futures for risk management.
Now, when we borrow, we encounter a very important problem, that is, fixed income. You must satisfy the capital’s demand for fixed income products. Because traditional capital needs to find ways to protect its wealth. If there is no sovereign jurisdiction to define your rating or certain capital structure, you need to create fixed income through swaps.
In traditional markets, the central bank plays two roles, the bank’s lender of last resort and the last buyer of securities, especially non-performing securities. Therefore, in the absence of sovereignty, borders, and money printing machines, how DeFi will solve the problem of the lender of last resort is a core challenge.
2021 is about to enter the fourth quarter, and the global new crown epidemic is about to come to an end. Capital holders remain highly vigilant about the economic impact of the epidemic, especially the monetary and fiscal policies adopted by the government. This is a good time for DeFi, because people’s confidence in the government is shaking.
But DeFi still faces many challenges. Not only the ones I mentioned above. Operational issues such as custody and margin loans can be resolved through technological progress or institutional arrangements. If these issues are resolved, traditional finance will extend outward, and DeFi will have the opportunity to improve the global financial landscape.
Keynote Speech | Index Fund: Encrypted Investment Revolution
Speaker: Simon Judd, Head of Business Development, Index Coop
Index investment is a powerful strategy, and Index Coop hopes to launch the world’s best cryptocurrency index fund. Before the emergence of index funds, ordinary investors could only invest in individual stocks, and they had to withstand huge fluctuations. However, index funds can effectively reduce risks. Index Coop is a project jointly incubated by Set Labs and DeFi Pulse. Its current products include DeFi Pulse Index, Metaverse Index, Leveraged Index, Bankless BED Index, etc.
The bottom layer of Index Coop uses Token Sets technology. We use it to combine many ERC20 tokens into one token, and can redeem them into holding tokens at any time, which is more efficient and transparent. This is a major improvement based on traditional index funds. In addition, users can also use index tokens to mortgage loans and lend them. In short, they can be used as money Lego in the entire DeFi field.
In addition, Index Coop also has an excellent community for maintaining index products. Index Coop’s community is divided into ten groups: product work group, development group, art design group, marketing growth group, and business development group. Each group is responsible for a business scope. As a decentralized autonomous community, everyone in Index Coop can independently participate in the agreement to make contributions and receive rewards.
In my eyes, the demand for new products in the cryptocurrency field, especially the demand for index funds, is very urgent. Cryptocurrency is a huge and complex market. As ordinary investors, it is difficult for them to deeply understand how DeFi works. Our index products are designed to solve this pain point.
Dialogue with industry leaders: DeFi “breaks the game” opportunity
- Sam Bankman-Fried, Co-founder and CEO of FTX
- Serum Senior Advisor Edward
Anne asked: DeFi lending, DEX, asset management, and synthetic assets have all formed a clearer echelon. What kind of opportunities might be needed for “breaking the game” in the future?
Sam Bankman-Fried: I think the most active DeFi protocol is none other than decentralized exchange (DEX) and lending protocols. Except for the recent NFT, so far, we have not observed much DeFi’s achievements in other fields. Although I have observed the field of asset tokenization or synthetic assets, I think this is still at a very early stage and has not yet seen anything that is truly mature. At the same time, we will pay more attention to infrastructure. Scalability is the key to DeFi moving into the future.
Edward: In addition to scalability, I think there is also a user experience. I think our thinking should be how to bring the world into DeFi, at this time the oracle is very important. I hope everyone will say after entering DeFi: “Wow! I’m not just trading cryptocurrency targets, but trading targets that are really important to my financial goals.” These assets can be in the foreign exchange market, equity tokens, or commodities such as metals. I hope to create an environment that is popular with investors and ensure that non-crypto investors can seamlessly enter DeFi.
Anne asked: What track development process is far less than the imagination it can provide to the public?
Sam Bankman-Fried: There are not many mature areas in the DeFi ecosystem. In the next year, you may see DeFi products become more complex and grow faster. DeFi products require high transaction throughput, but the efficiency of the current blockchain is not enough to cope with it. More urgently, almost all APPs need a more user-friendly interface and a more complete ecosystem.
Edward: Various wallets have begun to be developed for different usage needs. I think this is the true meaning of this NFT boom. The wallet actually allows users to experience NFTs and truly make any metadata a visual NFT. It is like the AR (augmented reality) that swept 2017 and 2018. Not many people have thought about GameFi and DeFi, but this is a very interesting direction. I think GameFi is healthy and positive for the growth of DeFi.
Anne asked: In addition to attracting more people and more funds in the future of DeFi, what other development possibilities might be overlooked by most people?
Sam Bankman-Fried: I think a use I would like to see is the DeFi application on social media, a way that social media can be chained, you can let each protocol operate interactively and extract the same data, but And independently use the data.
Edward: Social media is definitely a very important target area. Serum’s mission is to enable the global adoption of DeFi, and social media is an important platform and part of the global adoption of DeFi. On the other hand, there are already many large-scale projects trying to narrow the gap between the entry of fiat currency into the crypto world. I think everything we do is for more parts of the world to be easily and seamlessly integrated with the crypto field. This is very valuable. .
Anne asked: What do you think DeFi will be like in 2022?
Sam Bankman-Fried: I think we will see greater focus on scalability, and the focus on user experience will also greatly increase.
Edward: I think there will be more institutions adopting DeFi through Serum. The adoption of institutions can increase transaction volume and liquidity, which is very important for truly elevating DeFi to another level. In addition, this goes hand-in-hand with regulation. Clear regulation can help more people eliminate their concerns. This is also an interesting opportunity for participants who provide compliance, KYC or AML services.
Anne asked: As a decentralized exchange and ecosystem, what is the simple definition of Serum? How is it different from others? Are there any common misunderstandings about Serum at the moment?
Sam Bankman-Fried: Serum is a decentralized ecosystem built on the Solana blockchain . It starts from DEX and extends from it to build many large-scale and outstanding products, and Serum is much more than that.
Edward: Serum has always been interesting. On the one hand, Serum is an ecosystem. On the other hand, Serum is also a high-performance DEX based on the on-chain order book and matching engine architecture, and because it is built on Solana, you can settle very cheaply and quickly. Serum can Integrate with other decentralized apps, because these different apps are combined with protocols on Serum. So everyone can share liquidity and have the scalability brought by Solana.
Anne asked: What is the use of Serum’s SRM?
Edward: Serum token is the governance and multi-purpose token of the Serum ecosystem, supporting multiple fields. On the one hand, holding SRM can benefit you, such as cheaper transaction fees; on the other hand, SRM also has governance functions. We sincerely hope that SRM will eventually be decentralized and Serum will become a standard DAO next year. ; Finally, the currency value of SRM will continue to increase, because all the value will be returned to the Serum central limit order book, and part of the value will be returned to the purchase/burning of Serum.
Anne asked: What stage of development is Serum currently in? What kind of results have the team achieved?
Sam Bankman-Fried: I think the most important part of Serum so far must be the DEX ecosystem. You have seen Bonfida, Raydium and other tools.
Edward: We are working hard to promote all levels of Serum and are planning to push Serum to DAO.
Anne asked: What is the future development focus and route planning of Serum? What impact will it have on the ecosystem and DeFi?
Edward: We recently released a new roadmap 2.0. Now, we are committed to helping these low-level product projects meet the needs of the normal operation of this financial ecosystem. One of the original functions is the lending function, but it is not just as simple as borrowing. This is based on some kind of algorithmic model or some kind of market preset model.
Thanks to composability, if you have two underlying products at the same time and import a platform like Serum, now you want to do margin trading and connect to a great oracle for that goal. Now you have margin futures, not just digital asset spot, but also various securities, commodities or futures related to traditional finance, which are now fully available in DeFi.
Keynote Speech | How to look at the next DeFi Summer
Co-founder and CEO of Cobo & Co-founder of F2Pool Shenyu
At present, the key infrastructure of DeFi, such as mortgage lending, spot trading, and derivatives trading, have basically appeared. However, DeFi currently has about 2 million monthly active users, and the scale of the entire user is still very small. The reason is that the cost and threshold for these users to participate in DeFi are too high, so one problem that needs to be solved now is to improve the performance of the chain and reduce the gas fee, and then the cost of user access will be lowered. Therefore, the second-tier network eases the transaction congestion of the entire network and increases the scale of users.
Previously, a large number of applications of our DeFi were developed on the first layer of the network. Then the economic model is very simplified due to performance reasons, so the mechanism of AMM automatic market maker on Uniswap appeared. With the rise and popularization of the second-tier network, the traditional trading market may be clear from the new order book, and there may also be a wave of emerging trading platforms for spot and derivatives, which will further erode centralization. The market share of the exchange.
As far as the income of retail investors is concerned, the DeFi market actually has a very typical cyclical cycle, which is basically a period of 2-3 months. Because of the rapid emergence of projects and the discovery of its value, funds will eventually move back and forth between different chains and different projects, which will eventually equalize these high interest rates. However, in this process, there will be some time windows of benefit. To grasp it, you need to have a certain understanding of these mainstream DeFi subdivision tracks in the market.
In view of the popularity of NFT, I think this is a very important exploration. I currently see several trends:
The first trend is to fragment one or a basket of such high-value NFT projects to lower everyone’s input threshold; at the same time, because there is a liquidity pool, your entry and exit is just like a traditional ERC20. There is a pool on Uniswap, so it is very smooth.
The second is to store a basket of this kind of NFT in the pool so that the treasury can issue tokens, and then this token may be used to provide some economic incentives, such as mining, LP formation and so on. In this way, there will be a multi-party game process.
The third type is currently still in a very early stage. It is said that the NFT will be mortgaged. I will not lose the ownership of this NFT, but I can also obtain a certain amount of liquidity.
For the DeFi investment ratio of ordinary users, it is recommended that more than 50% of the positions are in long-term and stable top projects such as Bitcoin and Ethereum. Of the remaining 40%, you can invest 20-30% in DeFi, and then configure a 10%-15% to invest in some newer public chains, because these public chains may have strong explosive power and growth. For the remaining 5-1% of assets, you can choose some very early, innovative assets, such as NFT.
Roundtable Dialogue | Vientiane Update-The Way of DeFi Innovation
- Qi Liu, Founding Partner of SevenX Ventures
- Acala global community contributor, Kelly
- Head of NEST LABS, Tina Zhang
- Kava, Vice President of Global Business Development, Aaron
- Synthetix Head of Greater China, Dorothy Liu
- Kine co-founder and CEO, Wang Lei
Liu Qi (host): What kind of worldview do you have about the underlying blockchain system, which mainly refers to the public chain track? Secondly, DeFi has been in development for more than a year, and it has been developing very fast over the past year. What kind of blue ocean entrepreneurial opportunities do you think there are?
Kelly: Polkadot had a very complete governance mechanism in its initial design, allowing everyone to actively participate in it through voting, express their own voices, and use their own opinions to determine many things on the Internet. In addition, I think there are two main aspects of judging the blue ocean: firstly whether it is forward-looking enough, and secondly, whether it can carry a sufficient amount of the market from a technical perspective, and use the market, the community, and the data developers to judge.
Liu Qi (Moderator): In summary, one is the concept of public chain, the second is infrastructure, the third is user needs, and the fourth is to capture user value.
Aaron: I think it is still too early to discuss this issue. Many cross-chain projects and cross-chain protocols are still immature. There are many users but they don’t find it very easy to use. I also look forward to the future cross-chain world.
Dorothy Liu: The biggest innovation capability of Ethereum comes from the developer community, which has a large and strong developer community. A steady stream of developer innovation has contributed to the prosperity of Ethereum. My opinion is that once the developer’s ability to innovate is detonated and the community is attracted to stickiness, the public chain has already occupied a certain position. Speaking of the blue ocean, I think the opportunity that everyone has not mentioned is the DAO organization. I personally think that the biggest contribution of the blockchain world to human civilization is the DAO, which is still underestimated by everyone. At present, DAO’s infrastructure is still immature and its tools are not yet complete, but it will see more and more innovations.
Liu Qi (Moderator): Whether it is homogeneous or heterogeneous, it seems that it is inseparable from EVM at present. Is it possible that EVM is also the bottleneck of Ethereum, or the bottleneck of other public chains dominated by EVM?
Dorothy Liu: So we will look forward to Polkadot and Solana going out in a different way. At present, we see that the core creativity still comes from the Ethereum community. Other public chains are more to learn from and migrate mature business models and technologies. To your own public chain.
Tina Zhang: Our very insistence is that the blockchain must be completely decentralized, but the road to complete decentralization is very difficult. We believe that the complete blockchain world itself is a value production system, not a value exchange system. . The founders of our team often talk about understanding decentralization as a non-cooperative game market. The emergence of Bitcoin can be said to be a balanced asset formed by a non-cooperative game. In response to the blue ocean issue, we believe that by insisting on decentralization in the blockchain world, making products with a different risk structure from Ethereum and Bitcoin, and making completely different balanced assets can we make greater breakthroughs.
Liu Qi (host): In summary, Bitcoin is the first asset, Ethereum is the second asset, and Nest is looking for the third asset.
Wang Lei: Competition must be a huge driving force for the development of science and technology. The characteristics of the new public chain are more efficient, faster, cheaper, and lower gas fees. This is a virtuous circle of ecological development. Kine has also launched ETH, BSC and Polygon, constantly adapting to the multi-chain era.
Judge whether a track is a blue ocean track. Generally, this track will have 3 chances. The first chance usually requires a lot of funds in emerging tracks. VCs can read the white paper through their own understanding of technology, and those with funds Advantages can quickly obtain the first opportunity; the second opportunity lies in our early prediction of the market, and the market value can be predicted through use value. When the data of a track begins to change exponentially, the use value is transformed into the market. The value is not far away; the third chance has a higher risk and a lower return. The track is up, and everyone is catching up according to technical indicators. I would recommend ordinary investors to pursue the second logic and use data to judge the blue ocean track. The most promising blue ocean track currently available is the derivatives track.
Liu Qi (host): The next question I want to ask about Acala, you are now using the Substrate Polkadot technology system to develop your own DeFi kingdom, and also as an EVM chain to catch some new users. How do you pass these two foundations? Does the facility capture its own value?
Kelly: First of all, we are an independent chain. The independent chain has developed a relatively complete DeFi matrix based on the advantages of Substrate. Based on these, we have made EVM. The structure of the Polkadot heterogeneous chain allows developers who come in through EVM to be the first There are heterogeneous advantages. In addition, we will automatically liquidate, and the Ethereum project will be migrated in. You can directly upgrade according to your business needs, without waiting for us to fork. Second, Acala and Karura are still parallel chains. Everyone has their own business, users, communities, and directions. They can also be called on other parachains on the Acala EVM. This is the advantage of the Polkadot heterogeneous chain smart contract. In the future, Acala deploys EVM, hoping that developers can develop their innovation to the greatest extent in a different ecological layout.
Liu Qi (host): Please Synthetix to share the key factors in the layout of Layer 2 or the derivatives track.
Dorothy Liu: We chose Optimism a long time ago as the expansion solution, but now the expansion is developing rapidly, and the project party has more choices. After deploying Optimism as our expansion tool, many problems have been solved. The goal of our long-term synthetic assets and underlying protocols is to provide liquidity for derivatives on the chain. Optimism helps us break through the performance problems of Ethereum. Now we There are ecological projects to meet with you: Thales is a binary options ecological project and an option project Lyra based on the Layer 2 Optimism solution. In addition, the more established ecological project is called dHedge, which is used for asset management on the chain, and has recently launched a new version that supports cross-chain.
DYDX has deployed Layer 2 through cooperation with StarkWare, and announced the currency issuance plan and liquidity mining to achieve an explosion. Next, SNX will also start the liquidity mining plan, and our perpetual contract will go online, including many more Various derivatives track projects will come out. Looking forward to the arrival of Summer, a derivative on the chain.
Liu Qi (Moderator): As a derivatives agreement, what does Kine think is the core factor that detonates decentralized derivatives?
Wang Lei: The simple summary is the product itself. Users are very smart. Derivatives transactions are characterized by high frequency and high leverage. At this time, they are very sensitive to transaction fee costs. If you don’t work hard on this point, Derivatives Competition Tao can only stay in the conceptual stage. The explanation from the product level is roughly divided into four aspects:
- First, higher capital utilization.
- Second, high performance comparable to centralized exchanges.
- Third, low handling fees and slippage.
- Fourth, ease of use.
Liu Qi (host): Kava is also working on a full-stack DeFi protocol, how do you think about this blue ocean market?
Aaron: Traditional industries are interested in DeFi, so we will also communicate with some relatively new banks in the United States or other countries, and they are relatively compliant. We will also cooperate with some companies that have obtained licenses, custodian companies, or some we have already cooperated with, such as banks and digital currencies, so as to obtain corporate customers.
Liu Qi (Moderator): The last question is about Nest. We have always believed that the oracle is the infrastructure of DeFi. How do you become a widely adopted technical facility in this industry in the DeFi infrastructure?
Tina Zhang: Last year, everyone has been comparing Nest and Chainlink, but we are not essentially the same thing. Nest is a completely decentralized non-cooperative game mechanism. ChainLink is more susceptible to major project parties, including users. usage of. We are currently thinking about how to optimize. We hope that the project party can use the Nest oracle at low cost so that it can attract more users. In addition, we hope that Nest as a platform attracts more project parties. The road to decentralization is really difficult. Next, we are also working on decentralized derivatives based on the Nest oracle, including the currently incubating project Parasset, which has a lower threshold.
Liu Qi (host): What do you think are the core barriers to DeFi? I think the core barrier to DeFi is traffic.
Aaron: I think the most important thing is assets.
Wang Lei: I think the core of DeFi is to bring more users into the DeFi world and let more users feel the transparency and fairness that DeFi brings.
Tina Zhang: DeFi is a completely decentralized financial world, turning the traditional world into a decentralized financial world.
Dorothy Liu: The biggest obstacle and difficulty of DeFi lies in how to keep it decentralized or distributed.
Kelly: I also agree with the view of decentralization. Acala also cooperates with many traditional finances. I hope they will use U.S. dollars to gain revenue and realize it in a decentralized way. Users are more centralized. After getting used to it, he has already Can’t perceive the logic behind the decentralization.
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