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AC leaves, who will inherit the banner of DeFi development

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BlackHole Dao (BHO), the most representative DeFi3.0 decentralized asset management protocol.

Original source: BlackHoleDAO

With the development of the DeFi field Soul figure Andre Cronje (AC) announced his departure from the DeFi and encryption fields. "APY addiction" has turned DeFi's "money Lego game" more like a "ponzischeme" Ponzi scheme. Although no one knows how DeFi will develop in the future, we can reflect on this matter, what kind of DeFi is sustainable and valuable? Perhaps, his departure will become another turning point in the development of DeFi.

1. Where is the problem of DeFi? How should it develop in the future?

[APY Addiction]

As The soul of DeFi Summer, under the leadership of Daniele Sesta, another evangelist in the AC and DeFi field, more and more people agree that their "Deposit And Forget" is the spirit and soul of DeFi products.

AC seems to have implanted the idea of "pursuing APY" for DeFi from the very beginning. While ideas are not inherently wrong, like many things, a good idea can have unintended consequences.

The development of DeFi

DeFi 1.0 The most important feature:

The protocol provides liquidity (Liquidity Mining), with a focus on liquidity

In the early days of the birth of DeFi 1.0, represented by Uniswap, a genius used a formula to solve the problem of insufficient liquidity in decentralized finance. Mining has also become the mainstream mode of protocol launch. From here, DeFi becomes more and more dependent on APY.

DeFi1.0 is to borrow the liquidity provided by third parties such as giant whales through the agreement to promote decentralized market transactions. The intensification of the behavior of raising and selling has led to various problems of "mining accidents" caused by running away. In order to solve such problems, developers have carried out more radical experiments and attempts, thus ushering in the era of DeFi2.0.

The most important feature of DeFi 2.0:

Protocol Control Liquidity (Protocol -Owned Liquidity), focusing on high inflation (high APY)

A 2.0 protocol represented by the algorithmic stablecoin Olympus (OHM) , also using two formulas, through the pledge (stake) and binding (bond) mechanism, OHM no longer relies on third parties to provide liquidity, and has become the controller of its own liquidity. Since DeFi entered the 2.0 era led by OHM (Olympus DAO), the DeFi 2.0 protocol with an APY of 70,000% or even 7,000,000,000% has sprung up in various public chains like mushrooms after rain.

The Ve(3.3) project Solidly, a collaboration between AC and Daniele Sesta, has brought into play the core concept of DeFi 2.0's pursuit of high APY to a daunting level . If you don’t know much about Solidly yet, you can read Rhythm’s "AC's desperately promoting What exactly is ve(3,3) ? " and "How popular is the new AC project? The Vampire War that exploded Fantom overnight.

For the DeFi 1.0 protocol, obtaining liquidity is to facilitate decentralized market transactions, but the 2.0 protocol does not have any practical scenarios. The so-called "protocol-controlled liquidity" has become a way for the team to quickly win over funds, and even engage in Rug (Rhythm Note, DeFi 2.0 is introduced in detail in "APY 70,000%, DeFi 2.0 Dominated by OHM Forks") .

Since the rise of liquidity mining, DeFi has gradually gone astray. The problem solved by the protocol is no longer how to provide users and the industry with more stable and more Convenient financial services, but how to provide higher APY and obtain higher TVL; users no longer regard DeFi as a source of stable income, but a channel for speculation. It doesn't matter what the new agreement does, as long as the APY is high enough, it will rush in regardless.

Because of the mistakes of the Solidly project, AC finally chose to break up with Daniele Sesta, and announced that he would leave forever the DeFi and encryption world that he loved and fought for. Of course, "APY addiction" is the biggest problem in the entire DeFi 2.0 era.

2. AC leaves, who will inherit the banner of DeFi development

With the departure of AC, developers began to reflect on the problems caused by "APY addiction", and began to explore mechanisms and methods to solve high APY (high inflation). The era of DeFi 3.0 is about to follow!

2.1 The most important feature of DeFi3.0 is: agreement supported liquidity (Agreement supported liquidity), the focus is on high deflation (automatic destruction)

The exploration of the DeFi3.0 era has just begun, and developers have chosen to charge 5~20% transaction slippage (handling fee). Simple and effective method. Generally, most of the handling fees are repurchased and destroyed tokens, and a small part is used as a way to reward community users as dividends, in order to achieve a deflationary economic model of tokens. It is a pity that such attempts are uneven, and it is impossible to achieve a genius design like UNI, the representative of DeFi1.0, and OHM, the representative of DeFi2.0, which rely on one or two formulas and become the protocol standard of the entire era. Fork, infinite replication, iterative evolution.

Among the many developers in the DeFi3.0 era, who is most likely to become the next UNI, OHM, and become the representative of the DeFi 3.0 protocol? With the departure of AC, who has the ability to inherit the banner of DeFi development?

The economic model innovation of the decentralized asset management protocol Black Hole Dao (BHO) is impressive!

3、BlackHole Dao(BHO), the most representative DeFi3.0 decentralized asset management protocol

BlackHoleDao(BHO) It is a DeFi3.0 decentralized asset management protocol based on Dao governance. On the basis of DeFi2.0, a brand-new standardized model was built, which is called "BlackHoleDao Protocol (BHDP)" (black hole protocol). The imbalance between high inflation and deflation in the era of market.

3.1 BlackHole Dao (BHO), why can it become the representative of the DeFi 3.0 protocol?

Just like UNI, the representative of DeFi1.0, and OHM, the representative of DeFi2.0, BlackHoleDao also designed two formulas like a genius , Innovating the two biggest problems in the DeFi2.0 period of extreme deflation and value support. It can become the mainstream protocol standard in the entire DeFi 3.0 era.

3.2 BlackHole Dao (BHO), decentralized "Grayscale Capital (Grayscale)"

BlackHoleDao (BHO) was created by a group of technology developers and financial cypherpunks who love the blockchain industry. Their ideal is to use decentralized intelligence Contract asset management agreement, build a decentralized "Grayscale capital (Grayscale)". BlackHoleDao (BHO) is the same as Grayscale Capital. All assets entered into the asset management pool cannot be redeemed, and can only be realized by trading grayscale trust shares (BHO tokens) exchanged. For details, please refer to "Grayscale, New Grayscale Luna and Decentralized Grayscale Blackhole DAO (Black Hole) Bringing Changes to the DeFi World"

The difference between BlackHole Dao (BHO) and Grayscale Fund:

1. Different management methods

Grayscale is a centralized management team to manage assets; while Black Hole Dao (BHO) uses a decentralized asset management protocol to manage assets in all asset pools.

2. Different decision makers

Grey The degree fund is a digital asset category determined by the centralized management team; while BlackHoleDao (BHO) is a digital asset category that is voted by the decentralized autonomous community organization (Daos).

3. Different types of asset pools

Greyscale Fund is a unique and limited digital asset category carefully selected by the centralized management team; while BlackHole Dao (BHO) is recommended by the community, covering all (such as NFT and metaverse land and game props, etc.) all digital asset categories that have been issued (as of now, the total number of digital asset categories issued globally is about 18,000).

4. Different investment logic


One is called active investment. Asset managers rely on professional selection of specific assets to obtain excess returns from active decisions that outperform market trends; the other is called passive investment. Asset managers are only responsible for asset allocation and obtain long-term benefits from the trend growth of the market itself. Grayscale Fund is an active investment behavior that a professional management team selects to hold a specific currency, while BlackHoleDao (Black Hole) recommends all digital assets that have been issued through the community. It can be regarded as a passive ETF covering all issued digital assets in the world.

5. Different Vision

The vision of Grayscale Fund is to serve more traditional investment institutions and become the largest trust management institution in the encryption world. The vision of BlackHole Dao (Black Hole) is to establish more sub-communities (Daos) through autonomous organizations to discover and recommend all types of digital assets that have been issued on the entire network. Let every ordinary investor become a decentralized "grayscale" BlackHoleDao (BHO) partner. Share the good life brought by asset appreciation.

3.3 The first formula: BHDP: BlackHole DAO Protocol (Black Hole Asset Autonomous Management agreement), the automatic destruction mechanism achieves extreme deflation

BHDP extreme deflation formula: X-【X/(Y*H )]=Z

The extreme deflation mechanism of the agreement means that it will be triggered in the event of extreme inflation: 

When the stock (BHO) in the market reaches a certain amount, the support rate is equal to 0. At this time, the deflation mechanism will be triggered, and the interest of Stake will be Gradually decrease in a certain proportion. The proportion of stocks purchased through Bond (BHO) will gradually decrease. Secondly, the stocks (BHO) cast through VC Pool will also gradually decrease. If the support rate is less than 0, Stake will stop generating interest at this time. Bond and VC Pool The minting of new coins will be stopped, and the deflation mechanism will be triggered at the same time, and the stock circulation will be destroyed according to the time and corresponding ratio, until the support rate is greater than 0.

X-[X/(Y*H)]=Z

x: the number when the destruction mechanism is triggered

y: Destruction ratio

h: Time (days)

z: the quantity when the support rate of destruction is greater than 0

Example: The total casting limit of BHO is 100 trillion pieces. If the total casting amount is reached on a certain day, the automatic destruction agreement can be triggered after the community votes. If the condition of the automatic destruction agreement is , according to the proportion of BHOs held by the entire network, 1% will be automatically destroyed 24 hours a day until the remaining 10 billion BHOs are destroyed.

X-[X/(Y*H)]=Z is 100 trillion BHO-[100 trillion/ (1%*24H)]=10 billion pieces.

In theory, it only takes 99 days to automatically destroy 99.99% of the tokens according to the proportion of the entire network.

On the whole, the economic model surrounding the protocol design is moving forward, the business model is very distinctive, and it is universal in the DeFi industry It represents a set of models with strong correlation between businesses. Three adjustment mechanisms have been implemented in the deflation mechanism to prevent the product from being adversely affected due to too much circulation in the early stage. This is also the most fundamental cause of the high APY of DeFi2.0 question. So the mechanism itself is remarkable. Although all this has yet to be verified by the market, it is worth looking forward to.

3.4 The second formula: Black Hole Reactor (Black Hole Reactor) value exchange agreement, automatic exchange mechanism to ensure value support

The representative of DeFi 2.0, OHM, maintains a high APY while realizing the mechanism design of savings income is a genius, and the team has skillfully integrated Game theory, which is the "3,3" meme (the famous prisoner's dilemma) all over Twitter. Based on the Ve "3, 3" meme model, the Black Hole Reactor (Black Hole Reactor) value exchange protocol introduces the game mechanism of "Survival in the Wild", which is popular all over the Internet. Proportional share exchange for all funds in the Black Hole Reacto (Grand Prize).

The establishment of the Black Hole Reactor (black hole reactor) is a bit like the set asset value exchange prize pool at different stages of project development. According to the conditions of the specified smart contract, the prize pool will be opened, and the prize pool funds will mainly come from 60% of the transaction tax (handling fee) to destroy and inject. When 100 million BUSD is reached, the black hole reactor will be turned on. Of course, there may be reactors with different amounts in many stages. Perhaps the amount of the second phase reactor will be 1 billion BUSD.

Based on the settings of the smart contract, the reactor also sets several corresponding rules:

1. The total upper limit of BHO casting does not exceed 100 trillion pieces. When the market circulation triggers the black hole protocol mechanism, it will eventually deflate to 10 billion BHO and the reactor amount When the 100 million BUSD is reached, the reactor will be opened, and the 10 billion BHO holders can exchange the 100 million BUSD in the reactor in proportion. No matter what the price of BHO is at this time, the value of BHO is really supported by 100 million BUSD assets.

2. Regardless of the outcome, after the 3-year period expires, the black hole reactor will be opened.

3. During the BHO casting process, when the black hole reactor is full of 100 million BUSD, it will be opened and the casting will stop.

4. 60% of the tokens in the transaction fee pool (BHO has set a 15/25 transaction fee for buying and selling) will be destroyed and printed in proportion Into the black hole reactor (big prize pool), the tokens (BHO and BUSD) that are destroyed and entered into the black hole reactor (BHO and BUSD) will be destroyed according to a fixed ratio: for every 1 million BHO burned, there will be at least 1 More than BUSD.

The formula of the Black Hole Reactor (Black Hole Reactor) value exchange agreement is:

1. (Total amount of market issuance A - remaining total amount of market deflation A1) Each amount of destruction B 1 BUSD (funds corresponding to each amount of destruction) = total amount of reactors Amount of Funds

2. Total Reactor Funding Amount Market Deflation Remaining Total A1= Exchange Value E of Each Token

3. BHO exchange value support formula: the exchange value E of each token, the initial issue price D=token value support height N

Example:

According to the upper limit of the total issuance of BHOs of 100 trillion pieces, every time 1 million BHOs are destroyed, more than 1 BUSD will be injected into the black hole reactor, and eventually Destroy 99.99% of the BHO through the transaction fee and automatic destruction mechanism, and the final remaining 10 billion BHO calculate the value support height of the BHO as:

(the total market issuance is 100 Trillion pieces - the remaining total amount of market deflation is 10 billion pieces) Each destruction amount is 1 million 1BUSD (each destruction amount corresponds to the funds entered) = total reactor funds 99990000 BUSD 100 million BUSD

The total amount of funds in the reactor is 99.99 million BUSD, the total market deflation is 10 billion = the exchange value of each token is 0.01BUSD

BHO value support

The exchange value of each token is 0.01BUSD, the initial issue price is 0.00000005BUSD=token value theoretical support The height can reach 200,000.

Most of the economic models of all tokens rely solely on confidence to support future development value, and the BlackHoleDao-Black Hole Reactor Value Exchange Agreement turns this unreasonable price expectation into a real asset stage Promise and fulfillment.

Let speculators and profiteers pay high transaction taxes and leave, so that investors and loyal Holders can finally enjoy the ultimate reward of black hole reactors. This is more like providing every staunch community supporter with a smart navigator on the journey, and arriving at one city after another with the user. The goal is clear and attainable. Loyalty and firmness will inevitably have real feedback from following.

AC leaves, the DeFi field is still moving forward, and will not stop because of someone’s exit, whether the innovator BlackHole DAO (BHO) can The DeFi field, and even the entire encrypted digital industry, will take up the banner of innovators, so that all DeFi supporters will regain their fighting spirit, we will wait and see!

Note: The above is purely personal opinion and does not provide investment advice.