Uniswap Transfusion: The Take-off, the Destiny and the Future of DeFi
Original title: Uniswap Transfusion: DeFi's Take-off, Destiny and Future
Source: Daily Planet
In September 2013, BM, which Mr Nakamoto had rejected his bit-Banks' proposal to increase the transaction load on bitcoin, sat at home and tried to explain the concept of a decentralised exchange to his father. At that time, he referred to Decentralized exchanges (DEX) as Decentralized Autonomous Company (DAC).
"COINS in fact can be seen as a shares, the miners were employees or retention of employees, and profit is the transfer fees. Our decentralized Banks and exchanges should be how to operate? After all, the bank is just a company, based on the mortgage loan, and when the value of collateral is insufficient to cover positions. Use your house to do the bank mortgages, while our decentralized exchange use stake in the bank as collateral in itself." "He explained.
The parent-child conversation led him to the conclusion that Bitcoin could be thought of as a company that issues digital shares that are bought and sold in the market as a medium of exchange.
In 2014, BM came to the public with its original DPoS consensus mechanism technology and open source distributed trading system -- Bitstock, and became famous for its amazing "second-rate trading speed".
The bitcoin stock, which has emerged as a bitcoin challenger, is both fixing its own bugs and resolving differences within the development team. In the end, bittorrent was routed due to the collapse of trust caused by BM's determined additional issuance. At the end of 2015, BM left the Bittorrent team, reflecting: "Where have we been, what have we achieved, and where are we going?... A series of short-term projects will make us unconsciously deviate from the original plan's road map, and it is not as quick to change as to whitewash the plan."
BM was not worried about this sudden change as he moved on to his next project, EOS, but he did not expect that seven years later DeFi (decentralized or open finance) would take off and both he and his EOS would miss the wind.
Take off
On the eve of 2020, DeFi, which had just breached its 1 billion lock-up, suddenly suffered a "black swan" crisis. On March 12, there were two big falls in the encryption market, when DeFi's biggest lock-up project, MakerDao, nearly crashed and DeFi's total lock-up volume nearly halved.
After nearly three months of silence, DeFi's lending product Compound blew up the market with a liquidity mine. Within 20 days, Compound borrowing had increased tenfold, according to OKLink, and lock-up value briefly surpassed the top site, MakerDao, making it the lending section's most popular item.
The spread of Compound inspired decentralized lending platforms like Curve and Aave to come up with their own governance tokens. "Liquidity mining" provided a short-term cold start for the project. Attracted by high interest rates and governance tokens, the Wool party made money by "borrowing is mining", rapidly expanding the pool of funds.
Since June, DeFi has had a gusher explosion in total lock volumes, hitting record highs for four months in a row and topping $10 billion in early September. Total trading volumes on DeFi's decentralized exchanges rose 160% in August from July, hitting record highs for the third month in a row. Among them, decentralized exchange platform Uniswap grew 283% month-on-month. On August 30th it overtook Coinbase, a centralised exchange, in trading volume for the first time.
While Uniswap wasn't exactly DeFi unicorn, Sushiswap (sushi) took over and took over Uniswap, copying the Compound's "fluid mining," sucking up 75% of Uniswap's fluidness in just a week.
Sushi opened the "vampire mining", triggered a new round of competition and game. For a while, "DEX+ liquidity mining" is like online games opening a new suit, opening a pool to attract "farmers" (leeks involved in mining) to grab the top of the mine, and after cooling, opening a new pool to divert the flow past.
On September 5th, however, the momentum it had hoped for came to an abrupt end. Sushi's founder cashed out, wiping $130 million off the market value of tokens. With investors howling and security firms clamoring, DeFi's governance audit cannot be delayed.
destiny
The sushi is burnt, the salmon is burnt, and as September enters, the "fluidity of mining" is beginning to weaken.
"A new world has opened. Where is the next draught?"
On September 16th, Uniswap announced the release of the governance of the token UNI. According to Data from OKLink, as of 11:00 on September 18, at least 143,808 Ethereum addresses had received Uniswap'S UNI token rewards, and a total of about 86.874 million UNI had been claimed, accounting for 57.91% of the total of 150 million airdrops. At the same time, there are currently about 2,465 addresses that have applied for Claim but are still waiting for transaction confirmation. A total of 251,700 addresses are eligible for UNI scrip awards, which means there are still about 107,000 addresses that have not yet received UNI scrip awards.
Air drops for UNI, sending Gas charges for Ethereum, already cooling, soaring again.
As of 13:00 on Sept. 16, real-time Gas charges on Ethereum briefly exceeded 700 Gwei within three hours, according to OKLink data. In the same period, the transfer of Uniswap governance token UNI contributed 276.01 ETH (about $104,800) in nearly three hours, accounting for 6.30% of the total ethereum commission in nearly three hours.
"If UNI is not released, blood-sucking Uniswap will be at an even greater competitive disadvantage," says one.
It is worth noting, however, that DeFi's short-term popularity relied on a wave of speculation led by "liquidity mining" rather than users actually finding value in DeFi itself. DeFi's prosperity is sustained by the price support of the governance tokens in the secondary market. Once the governance tokens collapse in the secondary market, there will be a domino effect, that is, the "digg-tip-sell" system of the income plowers collapses, followed by a large number of "farmers" leaving the field and the project's liquidity drying up.
"It's not that DeFi has been falling lately, it's that the bubble was too high. When the bubble bursts, the whole DeFi industry will be back to its own value." OKLink relevant person in charge said.
In fact, the popularity of DeFi also extends to the performance of the underlying public chain. For example, ethereum's safety is further threatened by congestion, high Gas rates and miners' exorbitant transaction fees.
However, EOS, which ran out of DeFi's popularity in the first time, failed to get on the bus and turned over after the project failed due to the high entry threshold for users.
In the future
With the advent of the mobile Internet era, new technologies and business models have greatly impacted the traditional financial industry. Fintech, the disrupter of the financial industry, has refreshed the public's understanding of financial management, payment and even personal financial services. The whole industry needs to inject new technologies to make changes.
DeFi's original intention was to reduce barriers to entry and transaction costs for the general public, eliminating the cumbersome process of opening a bank account and paying fees. For example, it replaces credit checks in traditional financial services with overcollaterals, which means that those who do not already have access to traditional financial services can qualify to participate in financial activities.
More importantly, DeFi rebuilt the trust system on machines and code rather than on the "centralized" institutions we now rely on, resulting in a significant reduction in the cost of trust.
Today, when we go to a bank to open an account, it is based on a government endorsement of a credit; Our trust in third-party payment institutions (Alipay) is based on the strong corporate strength and credibility behind them. Such "trust" based on authoritative endorsement needs the support of a large number of human and material resources.
DeFi builds "trust" on protocols, USES blockchain features such as non-tampering and transparency to help people save time, simplify the document review process, and improve the efficiency of lending while keeping assets safe. For example, we can clearly see the flow of funds along the chain and, in theory, avoid worrying about the evils of centralised institutions.
Open, unbounded and integrated are becoming the key words of the banking revolution, and for DeFi, returning to the essence of technology is its future.
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