With 10 times the launch, is the initial DeFi release still far away?
Original title: "10 times online, Is the initial DeFi release far away from A chicken feather?"
Original author: Overnight porridge
A surge in initial coin offerings (ICOs) in 2017 sparked a major bull market in the cryptocurrency market, while IEO, which emerged in 2019, made these centralised cryptocurrency exchanges a third-party springboard for new issuance. By 2020, traditional ICO and IEO activities have largely died out, and a new form of encrypted native distribution has come into vogue -- initial DeFi distribution (IDO).
Over the past few years, decentralized Financial Applications (DeFi) have become one of the biggest stars on the Ethereum platform. In recent times, we have seen DeFi projects such as the Compound and the UMA agreements grow tenfold or more in value in a short period of time.
In addition, the other biggest beneficiary to date in the emerging DeFi industry is the decentralized exchange (DEX), among which Uniswap, born in November 2018, has become the most popular platform and has become one of the most important sources of liquidity in the Ethereum DeFi ecosystem.
In fact, Uniswap is the darling of the field because it is an open, carefully designed smart contract that means anyone or any project can leverage its infrastructure. In terms of the initial DeFi release (IDO), Uniswap is emerging as the system of choice for the new generation of encrypted native products (governance tokens).
Called governance tokens, they give token holders voting rights that can influence the direction of the underlying agreement, a valuable right in the booming DeFi industry. For projects like Compound and DEFI UMA, they need a decentralized way to distribute governance tokens to community participants.
Still, distinguishing wheat from chaff is crucial. Fundamentally speaking, the most attractive initial DeFi issue, are those who are already in the etheric fang provids through actual test on the finished project, or has been publicly released the MVP (minimum viable product) project, and the only issue ERC20 tokens, with a white paper to launch attempt, participants were not worth taking the time to consider.
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The recent IDO
1, UMA
Launch date: April 29
DEX: Uniswap
Initial token price: $0.26
Initial market value: $2 million
Current token price: $2.20
Current market value: $116 million
Return on investment: +800%
Released in December 2018, the UMA Protocol is a decentralized financial contract platform. Specifically, the UMA Protocol specializes in so-called priceless synthetic tokens, which are mortgage-backed ERC20 tokens that can track anything without the need for price information on a continuous chain from a prophecy machine. To demonstrate its technology, the project launched its first priceless token, ETHBTC, in May 2020. The first release tracked the ETH/BTC price ratio, allowing investors to short or long the ETH/BTC price ratio.
Team announced in April 2020, UMA agreement on April 29 UMA governance tokens for the first time Uniswap listing plans (i.e., the initial DeFi issue), in order to launch the online plan, the project's supporters in 2 million UMA tokens (accounting for 2% of the initial supply UMA), and $535000 worth of ETH opened a Uniswap liquidity pools. As mentioned above, this made the initial price of UMA about $0.26. This also marked the first time the public could get UMA tokens. The UMA protocol team explained:
"That means the total value of UMA Scrip network is about $26.67 million, which is the same valuation we had in our initial seed round."
Institutions such as Coinbase Ventures, Dragonfly Capital, and Two Sigma Ventures are reported to be participating in the UMA protocol seed round. As for the UMA token offering, the Risk Labs Foundation, the team behind the UMA agreement, has arranged this:
2 million UMA for Uniswap market;
35 million UMA distributed to UMA users and builders;
14.5 million UMA for future token sales;
48.5 million UMA distributed to Risk Lab founding team and main contributors;
In terms of price discovery, the price of UMA tokens shot up from $0.26 to more than $2 in just five minutes after it was launched on the Uniswap market. UMA tokens faced a sharp sell-off in the next few hours as the market stabilized and found support near the $1.40 mark. Two months after launching the Uniswap market, UMA token prices climbed above $2 again.
2, COMP
Launch date: May 16
DEX: Uniswap
Initial token price: $34
Initial market cap: $38 million
Current token price: $182
Current market value: $500 million
Return on investment: +500%
Published on ethereum's main website in September 2018, the Compound is an algorithmic money market agreement that allows users to provide liquidity to the agreement by providing collateral to earn Compound interest or borrow assets. Since its release, Compound has become one of the most popular Dapps on the Ethereum platform, with a total value of $679 million as of early July 2020, $70 million more than the value of the second largest DeFi project, MakerDAO lock.
Much of the recent growth in the Compound has come from the Compound team's governance token COMP, which was first released in February 2020 and initially touted by the project as a means to allocate power to the Compound community rather than a fundraising tool or investment opportunity.
In May 2020, the Compound's founding team built a COMP token allocation plan that would set aside more than 4.2 million comPs out of a total of 10 million comps as' reservoir 'contracts, with 0.5 COMP automatically assigned to Compound borrowers and lenders for each Ethereum block. The distribution process begins June 15, 2020, with approximately 2,880 comPs distributed daily. Within hours of the launch, an anonymous liquidity provider created a comp-ETH market on Uniswap, creating a DE facto first DeFi launch.
On the first day of trading, 14,000 COMP and 3750 ETH were deployed in the associated Uniswap pool, and the COMP price soared briefly from $34 to more than $60 when it went live. In the following days, the market frenzy pushed the COMP price to as high as $427 before Coinbase's token price began to fall as it went live. At the time of this writing in early July, COMP prices were hovering around $184.
Compound received A $8.2 million seed round in 2018 and A $25 million A round in 2019, at A cost of about $15 for the investment arm.
3, BAL
Launch date: June 23
DEX: Balancer
Initial token price: $6.65
Current token price: $11
Current market value: $388 million
Return on investment: +65%
Balancer, launched in March 2020, is a flexible, automated market-maker (AMM) protocol that allows users to open up pools of liquid capital without using the 50/50 two-coin split model commonly used by Uniswap. Balancer supports customizable asset pools, up to 8 ERC20 tokens.
Balancer Labs, the development team behind Balancer, has decided to raise $3 million in March 2020 through a seed round financing from institutional investors such as Placeholder and Accomplice. For example, the BAL token in the seed round is reportedly $0.60. According to Balancer Labs, the total BAL supply is 100 million, of which 25 million BAL scrip is distributed to founding teams and investors, and the remaining 75 million BAL scrip is distributed to liquidity providers. According to the plan, 145,000 BAL is allocated every week, equivalent to about 7.5 million BAL every year.
To date, more than 35 million BAL tokens have been issued, including the 5 million BAL Ecosystem Fund and the 5 million BAL Fund. After the launch of Balancer, Uniswap and 1inch on June 23, the BAL price soared to more than $15. After peaking above $17, the BAL price began to fall and has been stable around $10.50 for the last two weeks.
4, BZRX
Launch date: July 13, 2020
DEX: Uniswap
Initial token price: $0.047,688
Current token price: $0.16
Current market value: $160 million
Return on investment: 355%
In July 2018, bZx changed its name from B0X to bZx, which is a decentralized lending and margin trading platform. During the brand transformation, the project explained:
"Unlike most blockchain startups, bZx has made an ethical decision not to offer tokens to the public without a fully functional platform."
In fact, the bZx team conducted a public pre-sale in August 2018, and 13.65% of the total amount of BZRX governance scrip was allocated to investors participating in the private placement. It is reported that the price of SCRIp of BZRX at that time was $0.01679, indicating that the valuation of THE BZRX project was about $2.36 million at that time.
It is worth noting that in February 2020, lightning is borrowed from the hacker attacks, bZx agreement asset pool resulted in a loss of nearly $1 million, in early July, bZx team announced a plan to allow the affected liquidity providers to considerable discount buy BZRX, requirements are these tokens to lock in a four-year contract.
After the attack on bZx, the value of the lock on the contract has been falling, to $782,000.
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The upcoming IDO
& have spent 1, the MTA
MStable agreement was launched in May 2020, it is an all-in-one for stable currency lending and liquidity decentralized Hub, the agreement allows the user to deposited in the Dai, USDC or USDT ERC20 stable currency, in a ratio of 1:1 to generate mUSD stable currency, can then be mUSD stable currency deposited in the "storage" contract, through Compound and Aave project profit, or the tokens can be used with "Swap" function, allows the zero point of the stability of the currency trading.
It is reported that Meta (MTA), a governance token of mStable Agreement, will be launched with initial DeFi on July 15, 2020 through Balancer. Initially, 2,666,666 MTA and approximately $400,000 mUSD will be deposited into the asset pool, with an initial MTA price of $0.15 and an overall market value of approximately $15 million.
2, CRV
In June 2020, Curve Finance announced a Curve DAO and CRV governance scrip issuance plan. Curve Finance is the main decentralized exchange for efficient trading between stable and stable COINS. According to the design, the initial supply of CRV is 1 billion, accounting for one-third of the final 3.03 billion CRV. As of now, there are no plans to issue the token, but it will be distributed in a decentralized manner and quickly stimulate the liquidity pool of the DEX after the issue.
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Conclusion & have spent
We can observe that the initial DeFi release has been highly speculative, contrary to the project's original intention, and it is certain that similar release plans will continue to emerge. For investors, the key is to see if the project has a finished product or has an interesting MVP, not just a white paper and tokens.
In the long run, most IDO activities will end up like ICO and IEO.
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