Is DeFi 2.0 next?

@Scupytrooples, co-founder of Alchblockquoteix

Lu Jiangfei, Lianwen

Expect to see the rise of so-called "DeFi 2.0" by 2022.

As a DeFi writer, Degen, student and builder, I find that the vision I had in my head for the future of DeFi is already coming to fruition. There were a lot of great projects in the second wave of DeFi, but DeFi 2.0 was made possible largely by the early pioneers in the field, Examples include MakerDAO, Compound, Aave, Uniswap, Sushiswap, and Yearyear.Finance.

On top of these DeFi giants, the next wave of new protocols is coming up, and the one that surprised me the most was @Olympusdao. At first I didn't think the algorithmatic staboin protocol would do much, but reality hit me in the face and I couldn't have been more wrong.

Found that push around the DAO

Olympus DAO did something that no other agreement had ever done before -- they didn't mine liquidity providers (LP) to attract liquidity to the agreement, Instead, the concept of "Protocol controlled value" and its innovative binding mechanism subvert the traditional DeFi liquidity model.

In fact, the bond structure design of Olympus DAO is very excellent. Users only need to set the number of bonds they want to sell and the initial price, which can be easily started. The bond price will be adjusted according to the market demand. Once a bond is bought, its price rises, and then falls again when demand falls because of the price rise - the biggest advantage of this model is that supply always meets demand.

On the other hand, the big difference between Olympus and ICO is that money does not flow to the Olympus team, but to the protocol's own liquidity: when bonds are bought along with the liquidity provider's shares, Olympus Protocol effectively becomes its own market maker, generating both income and providing liquidity.

Frankly, IT didn't really hit me until a few months ago that liquidity mining is a double-edged sword: liquidity mining is good for the initial growth of DeFi, but not good for long-term sustainability. At the same time, I found that DeFi didn't seem to attract liquidity in any other way than to provide incentives -- indeed, that's what I thought before I took a closer look at the Olympus DAO.

Out of curiosity, I recently tried liquidity mining for OHM tokens to see what was so special about this protocol, and it turned out that the solution to the DeFi yield farming problem was Olympus bonds.

So I contacted Olympus DAO to see if they could offer their bond technology to Alchblockquoteix. In fact, they also see how other DeFi protocols can work when they use their mechanism.

Let's take a look at how Olympus Pro works.

How Olympus Pro works

At this stage, if you are already part of a DeFi protocol or are considering starting a DeFi protocol, I strongly recommend you check out Olympus Pro (OP).

Liquidity mining is great for early growth, but it's a bit like a drug: it feels great at first, but the more you use it and rely on it, the worse it gets. The main problem here is that a large amount of "toxic" liquidity will invade the liquidity pool and affect other participants, and when other participants find out about the problem, they can't really do much about it. The only winning strategy is to go with the flow. Olympus Pro (OP) solves this problem and cleans up the "filth" floating in the liquidity pool.

And in the process, something amazing happens. I think everyone is familiar with this by now: when the toxicity is gone, the community comes together to develop strategies, and what used to be a "person-to-person" game of liquidity mining is now a "couch on the couch" cooperative game. The Olympus community is a good example of that.

Olympus Pro (OP) brings this magic to any protocol that uses its services and of course it may take some time to change the overall trend of liquidity mining, but I do believe that Olympus Pro (OP) can give holders and traders more confidence in projects when liquidity providers trade diamond hands.

Here are some examples of DeFi protocols with strong liquidity mining. I have hidden the project name and kept only the dollar movement of liquidity mining (more intuitive than using ETH) to show how you can be affected by liquidity mining in a bull market.

As a member of @Alchblockquoteixfi, I am very happy with Olympus Pro (OP). In less than 10 days, we have secured about $500,000 worth of bonds, and continuing to do so will allow $ALCX to control inflation faster.

As we also provide incentives in the $alUSD and $alETH markets, we will continue to provide bonds for these markets, which will ensure that we have long-term liquidity and people will have confidence in the platform for decades to come.

So if you are in a DeFi protocol based on liquidity mining, try Olympus Pro (OP) now, at least I can't think of any other solution that makes better use of liquidity mining money.

The beauty of Tokblockquoteak

Another DeFi protocol that gives me goose bumps is Tokblockquoteak, which aims to solve the DeFi liquidity problem and make liquidity rental sales more efficient than having two pools.

So far, Tokblockquoteak has not been officially launched, so we can't be 100% sure how it will work, but I am very optimistic about the protocol. Let me explain how it works and why your agreement should make it the next option.

The goal of the Tokblockquoteak protocol is to become a decentralized market maker. So what is a market maker? Basically, market-making provides liquidity on the exchange, so others can trade at the low slip point and make money on the spread. In fact, market making is not easy, but those who are good at it can make a profit for themselves.

Some centralised financial market makers participated in the arbitrage of the DEX market, but until now we have not seen true decentralised market makers. The Tokblockquoteak protocol has a large ETH and USDC reserve, so it can be paired with other tokens in the protocol.

Users pledge their tokens to the Tokblockquoteak protocol (the first supported tokens include $ALCX, $FXS, $TCR, $OHM, and $SUSHI) and receive a tToken, which can be used as their deposit receipt. As a tToken holder, you are eligible to earn $TOKE tokens to match the other side of the liquidity.

For the liquidity providers in the Tokblockquoteak protocol, this protocol provides them with a way to provide liquidity while minimizing the risk of impermanent loss. Not only that, but the Tokblockquoteak protocol does a great job of designing $TOKE tokens, so let me explain more:

When you hold TOKE tokens, you can pledge them to the Tokblockquoteak Reactor, and the more TOKE tokens that are entrusted to a reactor, the more available liquidity is channeled to that token. What's even cooler is that liquidity facilitators can also get incentives for providing just the right amount of liquidity.

If liquidity is high but volume is low, it means you are allocating too much liquidity, and vice versa. The trick is to get your liquidity and volume just right, and the Tokblockquoteak Agreement rewards liquidity facilitators for doing so. As a liquidity facilitator, if you want to maximize your returns, you must allocate liquidity in the smartest way possible!

Going forward, I definitely think the largest TOKE token holders will be decentralized autonomous organizations (DAOs). I'll talk more about this in other posts, but it takes a long time to explain because game theory is pretty cool stuff.

For DeFi protocols that use liquidity mining, just know that using the Tokblockquoteak protocol can calculate the dollar price per unit of liquidity more efficiently than allowing two pools yourself.

Read the next generation of mortgage position platforms: Alchblockquoteix and Spell

Let's talk about the next generation of CDP platforms. In my completely unbiased opinion, @Alchblockquoteixfi and @MIM_spell will remain at the forefront of CDP platform development. If you've followed me before and read some of my analysis, you've heard a lot about Alchblockquoteix. Alchblockquoteix invented non-liquidable, self-paying loan products. Pretty cool, huh?

The second version of Alchblockquoteix will support multi-mortgaged, multi-strategy assets, and now people can put their tokens into income aggregators such as Yearn, Pickle, Harvest and others, which Alchblockquoteix will support. It will extend the cdo position function to these agreements.

In addition, We will extend the synthetic products of Alchblockquoteix -- affectionately referred to as "Altchblockquoteix" -- for the use of Alchblockquoteix in reserve vaults through alBTC as well as a number of other assets in DeFi The future potential for decentralized autonomous organizations is huge, and we look forward to Altchblockquoteix's performance, as well as many other improvements to the ALCX token in 2022.

The magic of Convex

The last DeFi protocol to talk about is @ConvexFinance, which is built on the shoulders of @CurveFinance, one of my personal favorites in DeFi. Conve and their veCRV governance token have a great design and are one of the most profitable DeFi protocols in my opinion.

For those of you who are not familiar with the Cruve protocol, Curve liquid mining is entirely controlled by voting on floating tokens in the Curve metering system, and in the Convex protocol, veCRV holders vote for (LP mining pool) metrics and give guidance on each metric.

On the other hand, the more veCRV tokens you own, the higher the yield on the tokens placed in the liquidity pool. The Convex protocol builds on this system, they have a large number of veCRV and are ready to extend veCRV to everyone. Convex plans to issue its own $CVX token, which will have some nice features of its own, and eventually will be the best place to put stable assets on Ethereum, locking some $CRV into a veCRV and distributing the rest to users.

Thanks to innovations brought about by @AndRecronjetech and @VotiumProtocol, veCRV and CVX holders have become powerful liquidity guides, and even if people dump these tokens for rewards, passive income more than makes up for it.

In summary, the next generation of agreements will make DeFi more capital efficient and the token economy model will be improved, which will make all DeFi protocols sustainable, so I am very optimistic about the agreements mentioned in this article.

One final word: DeFi 2.0 is great.

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