Double Eleven “price war” is about to start, Taobao officially launched the “1 yuan more fragrant festival”, more than 100 million factory shipments only cost 1 yuan to get home. While consumers are still discussing whether it is “factory goods” or “subsidies” which is more popular, Pinduoduo has quietly launched its wholesale business.
Before Double 11 has arrived, the war on e-commerce has ignited; and the DeFi boom that ignited the currency circle has gradually receded by subsidizing the community with “liquid mining”.
Liquidity mining subsidies and wool party carnival
Since Compund launched liquid mining, many DeFi “foods” such as sweet potatoes, sushi, salmon, corn, pearls, kimchi, carrots, etc. have appeared on public chains such as Ethereum and TRON, attracting wool parties who have entered the market. .
In June, Compound quickly became popular in the DeFi lending section with its “liquidity mining”. According to data from OKLink of Oukeyunchain, its borrowing volume has doubled 10 times in 20 days, and the locked-up market value once surpassed the top MakerDao. Compound’s gameplay is Pinduoduo’s “tens of billions of subsidies” routine, as long as users provide liquidity for the platform, they can get rewards.
Compound’s success has attracted many imitators. In early September, Sushiswap was parasitic on Uniswap, imitating Compound to issue its governance token, and derived a community-driven currency game that is more friendly to retail investors.
In the beginning, retail investors acted as LPs (liquidity providers) on Uniswap. The early-stage pair provided liquidity to a certain trading pair. After the large investors and VCs enter the market, the income will be diluted. That is, retail investors risked impermanent losses without receiving any rewards for providing liquidity.
After Sushiswap was founded, LP can get a 0.25% commission reward, and the remaining 0.05% will be used to repurchase SUSHI tokens. This kind of gameplay that is more inclined to retail makes it suck 75% of Uniswap’s blood in just one week. fluidity.
In mid-September, Uniswap used UBI to “spend money” to counterattack (Universal Basic Income, or “Universal Basic Income”. The government sends money to residents. Each resident gets the same amount, and it doesn’t require any money to get the money. Qualifications or conditions.), using the “airdrop + liquidity mining” method, not only airdropped retail investors, but also inspired VCs.
“UBI’s approach has inspired many old users before.” said Mable Jiang, executive director of Multicoin Capital. On the one hand, regardless of the amount of funds, as long as they have used Uniswap, even users who have not succeeded in the transaction or LP are included in the scope of Uniswap airdrops; on the other hand, liquid mining is beneficial to large accounts with huge amounts of funds. , Get high income.
The “DEX + loan is mining” model uses the common “subsidy” method, which is simple to operate and very convenient to imitate. It can even derive many advanced versions at any time. As long as the benefits are greater than the cost, you are not afraid at all. No one FOMO.
The success of Sushiswap caused the “DEX+ liquidity mining” to spread like a new online game. First, open a pool to attract the wool party to grab the top mine, and after cooling down, open a new pool to divert traffic. However, with the increasing number of DeFi products, their lifespans are getting shorter and shorter. Homogeneous products are crowded on the same track. Many new projects rely on new coins to attract a wave of traffic, and the voices are getting smaller and smaller.
“It is difficult for this currency issuance model to trigger new trends.” The relevant person in charge of OKLink said, “The sustainable development of DeFi products and meeting demand are the foundation, and novel products and incentives are important reasons for promoting product popularity.”
Wool is on the sheep
“You stare at the sheep’s wool, the people who teach you to stalk the wool stare at your liquidity, and the public chain is staring at your traffic.” In the opinion of the person in charge of OKLink, with the development of the business model, it seems that It is the fleece of retail investors on the platform, which is essentially a dispute over the liquidity of each platform, and even more a dispute over the traffic of the public chain.
Prior to this, the domestic public chain Nebulas Nebulas also tried to expand the DApp ecosystem by means of “wintering”. It is reported that as of July 2019, its first-quarter incentive plan has attracted more than 6,800 DApps to settle in. However, after gathering the wool, the wool party has dispersed, and more than 90% of its DApps have daily activity close to zero.
At present, more and more public chains have joined the DeFi track, and the head effect has become more obvious. According to OKLink data, DeFi applications are almost all developed and used on Ethereum.
“From the perspective of Ethereum itself, its public chain ecology is relatively mature. It can not only write smart contracts, but also has a large developer base. In addition, most of the current assets are on Ethereum. In addition to ETH, there are other ERCs. -20 assets, and at the same time the assets anchored to BTC are also being transferred to the Ethereum public chain.” The relevant person in charge of OKLink explained.
EOS has also followed suit and launched the “liquid mining” project DeFis Network (DFS). DeFis claims to integrate the advantages of the best of the protocols on Ethereum (the liquidity protocols Uniswap and Synthetix, the lending protocol Compound and MakerDAO). However, after only three days of going online, DeFis had to modify the rules three times a day because it became a scalping machine for “scientists” and speculators. (Note: “Scientist” refers to people who use rules or vulnerabilities to mine unlimited mining.)
In addition, EOS accounts need to be created with money, and factors such as high entry barriers for new users and single assets hinder their opportunities to compete for traffic.
However, the high fees and scalability on Ethereum have also become the biggest obstacle to the development of DeFi.
Users who play DeFi have a profound experience, and the gas fee is too high. OKLink has previously monitored that on September 16, the real-time gas fee on Ethereum once exceeded 700Gwei, a record high.
If you play liquid mining, a transaction will cost at least tens of dollars in gas fees. If it is a heavy user, it is common to spend hundreds of thousands of dollars to play DeFi. This extremely high fee has become an obstacle for DeFi to move towards large-scale users. Most ordinary users may not have a lot of funds to participate in mining. If the fee is so expensive, considering the risks of mining itself, from a rational point of view, yes For most ordinary users, the driving force for mining is insufficient.
Second, if congestion is encountered, the speed of Ethereum processing transactions will be very slow. If you encounter a black swan event like 312, users will not be able to complete transactions quickly and will cause losses. Some mortgage positions need to be redeemed through on-chain transactions. For example, during a period of rapid market decline, failure to complete the transaction in time may result in the position being liquidated.
Every time DeFi launches a new server, it is accompanied by Ethereum Gas fees breaking new highs time and time again. The so-called wool is on the sheep. What you spend is the platform, but you spend your own real money.
