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5 minutes to understand the various DEFI protocols of SERUM ecosystem. How will FTX combine them?

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The present situation of "SERUM UNIVERSE" created by SBF, the founder of FTX.

The original title: the SBF universe | five minutes to read the Serum ecosystems DeFi agreement, FTX will be how to put them together?"

Original source:Dynamic area BlockTempo

自去年年底 Serum 协议推出后，Serum 生态系发展至今已逐渐完善，生态系包括 Serum 前端 Bonfida、整合 AMM 流动性的 Raydium、离线地图 App 的 Maps.me、主经纪商协议 Oxygen。

In this paper, we will briefly introduce the functions of each DEFI protocol in SERUM ecosystem, and finally, we will summarize the roles played by each protocol in SERUM ecosystem, and describe the current situation of the "SERUM Universe" created by Sam Bankman-Fried, founder of FTX.

The following are the members of SERUM ecosystem that will appear in this paper:

Low & have spent SERUM -- Decentralized Exchange

Low & have spent Raydium -- AMM protocol

Low & have spent Bonfida - Front end platform

Low & have spent Maps. Me 2.0 -- Application scenarios

Low & have spent Oxygen -- Prime Broker Agreement

Decentralized Exchange SERUM

The first gem of SERUM is the Decentralized Exchange (DEX), the SERUM protocol, which was launched by Sam Bankman-Fried, founder of FTX exchange and market maker Alameda Research, as the DEFI protocol.

In general, most DEX's use an "automatic market maker (AMM)" mechanism that relies on mathematical models such as "x * y = k". The advantage is that you don't have to rely on traditional market makers to provide liquidity, but the disadvantage is that when liquidity is scarce, there will be a large "slip price", and users can't buy and sell orders in advance, protect assets, or even suffer volatile losses as they do on CEX (centralized exchange).

In addition to decentralization, AMM is more due to the lack of scalability of the underlying architecture (such as Ethereum), which would result in high fees and delayed transaction speed if the traditional "order book mechanism" was used.

Serum addresses this issue through the scalability of the Solana blockchain, which allows users to trade based on an "Orderbook" mechanism. In addition to pre-booking, high trading speeds and low fees also make high frequency trading possible.

According to the white paper, SERUM not only has a cross-chain trading agreement, but will also issue SERUM USD backed by a basket of stable currencies to avoid single points of failure. Therefore, in the long term, SERUM's future benchmarking model should be a "decentralized version" of the FTX exchange, becoming a spot and derivatives trading platform on Solana.

However, SERUM alone is far from sufficient. The complete DEFI ecology must be composed of an optimized front end, loan agreement, and synthetic asset agreement, etc. Thus, SERUM Universe was called by the community.

Raydium AMM agreement

While the Raydim agreement is also a trading agreement, in a different direction from Serum's role as a derivatives trading platform, Raydium is more of an "AMM" mechanism to create liquidity for the entire ecosystem.

Raydium's current mathematical model is "K = Y/X" and will place orders in the SERUM order book based on this mathematical model for the purpose of liquidity sharing. For any given two tokens, it provides the trader with "unlimited" liquidity without giving any information about their relative prices or values.

The key pool of liquidity will be stimulated by Ray tokens. Projects that want to reward users for providing liquidity can also add other reward tokens. New projects can also use Raydium to create new trading markets and provide immediate liquidity to the trading markets when initiating initial trading.

Defi's most valuable feature is its "composability", which allows different protocols to be linked to each other, consolidating and increasing the liquidity of assets on the chain.

However, the liquidity of the current AMM agreement is segmenting, which means that the liquidity of funds locked in a specific DEFI agreement is very limited, while the Raydium agreement provides on-chain liquidity to the central price-limit order book, which represents the order flow and liquidity of Raydium to the entire SERUM ecosystem.

Bonfida front-end platform

According to Bonfida's official website, Bonfida is also a Dex, but according to the white paper, Bonfida is not a Dex. It is more similar to Serum's front-end platform. The white paper says:

The functional integrity of the Bonfida platform enhances and optimizes the connection between SERUM, Solana and the user. Bonfida is Serum's most complete "flagship front end" and is also the first front end to provide users with analysis of Serum DEX trading data on the Solana chain.

Currently Bonfida has five functions:

1. Bonfida Serum Frontier (GUI) : The Bonfida DEX is primarily the front end of Serum, offering a great trading experience with a built-in wallet.

2. SERUM API: Provides a data store for all SERUM trading data and is currently used by data platforms such as Coingecko and CoinMarketCap, as well as by a number of decentralized head exchange market makers.

3. Dashboard: Bonfida integrates all the components of SERUM Ecosystem, including SERUM Front End, Transaction Protocol (SAPSW), Lending and Pledge to provide users with a one-stop transaction.

4. Bonfida program trading: Users can use technical metrics to construct trading strategies for program trading. These trading strategies can also be made available to other users to subscribe to.

5. Solible: Solana NFT trading platform.

Maps. Me 2.0

Maps. Me is an offline mapping application that has amassed 140 million users since its launch. Users can download maps in advance before traveling, so that even when the local network traffic runs out, they can also search maps, local hotels and restaurants, and plan their trips in the application, which is a very important application for mountaineers and travel enthusiasts.

In addition to planning trips, maps.me allows users to book accommodations and restaurants within the app. However, due to the cooperation with the third-party payment platform, it needs to pay a high commission fee. Statistics show that passengers in international travel, for every 100 dollars spent on average, they have to bear 17 dollars of exchange loss, including remittance charges and third-party platform charges.

Focusing on Defi's potential for ecological growth, MAPES.me will build a wallet into the app, allowing users to book a hotel, book a restaurant, and pay for a meal directly from their wallet without any intermediary platform, with virtually zero exchange loss (blockchain handling fee).

Due to the large number of users and the fact that the users are all over the world, MAPS.me chose to join SERUM ecosystem. Solana's high efficiency and low handling fee can meet the needs of frequent transactions. On the other hand, the conversion between national stablecoins requires a large number of liquidity and trading pairs, and fiat and stablecoin exchange channels are also required.

More importantly, maps.me will also integrate with the upcoming Oxygen protocol, which will allow users to trade their own tokens, pledge assets into Oxygen's capital pool for "passive income," or lend out other assets to maximize capital efficiency.

Oxygen agreement

The Oxygen protocol is a decentralized Prime Brokerage agreement modelled on traditional finance Prime Brokerage services designed for 'institutional investors'. This service connects various market participants, including hedge funds, pension funds, insurance companies, asset managers, and liquidity providers. The user can trade directly in it, matching the user's demand for assets collateral, lending (such as securities), thereby maximizing the efficiency of the user's use of funds.

The Oxygen agreement is a lending agreement based on a "pool structure." The pool of funds is everyone's asset. Oxygen democratizes lending with its performation-free, low-cost communication, and extensible prime broker service agreement. For Defi users, Oxygen makes the use of funds more efficient.

The application landscape for Oxygen includes:

1. Generate revenue: Users deposit money and earn revenue from it.

2. Borrowing: Users can borrow assets from the pool and pay interest to the pool.

3. Trading: Users can trade in pools of capital, and decentralized exchange SERUM.

4. Synthetic products: Assets pledged in a pool of funds to trade more complex structured synthetic products.

Looking at the above scenario, Oxygen is more like a one-stop DeFi, or Compound + Synthetix + Uniswap. User funds can be placed on the Oxygen platform for lending, collated assets, synthetic assets, and transactions.

It is worth noting that the Oxygen agreement also addresses the current low efficiency of the Defi agreement. This is because, although the DEFI protocol is groupable, funds pledged on a single platform cannot be transferred to another platform. On the other hand, users use the lent stablecoin to purchase or synthesize other assets, which need to bear the risk of exchange rate depletion, and it also costs a lot of management costs to manage assets in multiple agreements.

Under the Oxygen protocol, users can pledge assets over and over again, collecting revenue from the assets they lend out and using the borrowed assets to augment their revenue. Continuing the consistent style of FTX Exchange, when the user wants to borrow other assets, the total value of "all assets" in the account can be used as the security deposit, which means that the risk of liquidation or margin call will be reduced for the user, and "cross-asset mortgage with the same account" can be achieved.

Avengers, Assemble!

After listing the DEFI protocols in SERUM ecosystem one by one, it is not difficult to find that SERUM has almost completed the important puzzle of constructing a complete DEFI ecosystem.

Satisfy scalability

First of all, as it is built on the Solana blockchain, SERUM DEX satisfies the "order book" mechanism of SERUM DEX, which allows traders to use an order booking mechanism such as CEX to avoid sliding prices when trading. The nature of the order book also makes SERUM DEX tradable derivative products in the future.

On the other hand, the issuance of SERUM USD backed by a basket of stablecoins can also satisfy the original STablecoins of SERUM Ecosystem. In addition to helping with asset pricing, it can also avoid single point of failure.

Optimize trading experience

Bonfida, as the front end of SERUM, provides a one-stop service with an optimized interface, API linking data, and integration of all components of SERUM ecosystem. The program trading can also accommodate more traders and optimize the trading experience, which gives SERUM DEX great advantages as a derivatives trading platform.

Mobility on the integration chain

While optimizing the trading experience, the Raydium AMM agreement integrates the liquidity of the various DEFI agreements through an "improved AMM agreement" and provides on-chain liquidity to the central limit order book and to the entire SERUM ecosystem.

Sam Bankman-Fried has previously proposed to the Sushiswap community to copy the proposal from Sushiswap to Solana. If approved, through the cross-chain mechanism of Solana, the cooperation with Sushiswap and the reward of liquidity mining can attract the external liquidity of other blockchains, thus strengthening Serum ecology.

Importing real users

The addition of map. me to SERUM is, on the one hand, to introduce the advantages of DEFI to the users of map. me, and on the other hand, to import a large number of users to SERUM. Defi currently has about 1.2 million active wallet addresses, but the actual number of active users is likely to be less than 1 million, or even fewer, after factoring out duplicates.

With a user base of 140 million, maps. me can attract real users to use maps. me's Defi wallet through a "zero exchange loss" approach, and then integrate maps. me's wallet into the Oxygen protocol to allow users to pledge assets for "passive income" or lend out other assets to maximize capital efficiency.

With the introduction of more than 1% of users (equivalent to 1.4 million users), SERUM Ecosystems will be able to reach a large user base. This means greater mobility, a larger ecosystem, and Solana's scalability allows it to accommodate that number of users.

Maximize capital efficiency

On the other hand, Oxygen's "Compound + Synthetix + Uniswap" one-stop Defi allows users to meet their lending, collated assets, composite assets, and trading needs from a single platform. In this regard, Oxygen complements the "composability" of the SERUM ecosystem. Lending and mortgaging assets greatly increase the efficiency of users' funds, and the advantage of "cross-asset mortgage with the same account" reduces the risk of being liquidated, so that users can better manage their assets.

A later "synthetic asset" feature allows developers to create structured products tailored to themselves or their customers, while the Oxygen protocol uses an on-chain risk management engine to assess a user's pool of funds.

In the long term, Serum DEX is more like a derivatives exchange, and the synthetic assets created by Oxygen can be listed on Serum DEX, creating a secondary market and liquidity.

The scalability of the underlying architecture Solana, the optimized trading experience of the Bonfida front end, the integrated liquidity of Raydium AMM agreement, the introduction of the user base of MAPS.me, the loan agreement of Oxygen agreement, and the synthetized assets, the basic form of SERUM ecosystem has been formed. Under the leadership of Sam Bankman-Fried, it is sure to create a variety of topics.

But at present, still in its early Serum ecosystems, Solana developing intelligent contract language Rust is not the past the etheric fang dApp developers used programming language, the front-end purse is still improving, the above two points, does increase the Serum or the use and development of Solana threshold, and Serum ecosystems can break through the limit, operation become the rotation of the universe, it depends on the time to prove.