After PayPal's reorganization, founder Flex Yang's new "HOPE"
On March 13, the DeFi project HOPE launched by the founder and former CEO of the cryptocurrency financial service provider PayPal Finance was officially announced, and PayPal Finance also announced to Singapore a week ago The court submitted an application for a stay of execution to start the first step of reorganization. This is the first time since PayPal stated that it was insolvent and suspended the redemption and withdrawal functions in June 2022.
As one of the largest encrypted banks in Asia, PayPal’s loan balance at its peak was as high as 3 billion US dollars, and it was awarded by Tiger Global , Sequoia and other top capitals are all favored. It is a pity that in the magical 2022, during the violent deleveraging of Bitcoin, PayPal could not escape the thunderstorm and became one of the many liquidation encryption platforms.
PayPal’s thunderstorm surprised many users. The founders were at odds and infighting. Through this application for suspension of execution submitted to the court, we can also get a little understanding of what happened internally at that time.
Founder Flex Yang leaves PayPal
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In fact, 2022 is not the first time that PayPal Finance has experienced a crisis. PayPal Finance has always been known for its high leverage and high profit margins. As early as 2020, there were rumors in the industry that PayPal was liquidated due to the sharp drop in BTC prices, but its largest borrower Tether at the time extended the time for PayPal to cover its positions. Although the rapid recovery of the market has allowed PayPal to survive the crisis, this may also be the beginning of the two founders' different development concepts and strategic directions for the company.
With the arrival of DeFi Summer, when the whole industry is shouting "DeFi replaces CeFi", PayPal CEO Flex Yang Also began to think about the development of DeFi. According to Flex Yang later stated that at that time, he had already begun to conceive how to build a DeFi project. In 2021, Flex Yang began negotiating a share acquisition with another co-founder, Del Wang. Flex Yang is gradually withdrawn from the day-to-day management of PayPal Finance.
According to the latest court documents, Flex Yang announced the resignation information to the company's employees on December 7, 2021, and within 4 days The news was later made public.
In 2022, after Flex left, PayPal shifted its strategic focus to the transaction field, but the transaction business was not successful. In June 2022, the sharp drop in the price of encrypted assets led by BTC brought huge losses and a liquidity crisis to PayPal Finance. According to statistics, the trading department lost more than 8,200 BTC and 56,500 ETH, and PayPal Finance lost about $766 million in this crisis.
After the PayPal financial crisis, Flex Yang, who was building a DeFi project, chose to return and was responsible for hosting the communication with shareholders and creditors. reorganization work. At the same time, Flex Yang also named its DeFi project HOPE (Hope). According to the official vision, HOPE is committed to bringing some new changes to the industry, combining the advantages of DeFi and CeFi, so as to avoid similar incidents like PayPal Finance from happening again .
The disaster of 2022 has passed, and the confidence in the industry, which was thought to take a long time to recover, surprised us at the beginning of 2023, the long-lost funds Active makes the market start searching for new items again. What is the difference between HOPE, which combines the advantages of DeFi and CeFi?
HOPE, Flex Yang's DeFi Dream
HOPE, Flex Yang's DeFi Dream
According to the data analysis website glassnode data display At present, the encryption market has bottomed out, the activity on the BTC chain has recovered to 72.5% of the historical peak, and the total number of ETH contract calls has approached the historical peak.
Original image source: glassnode
In the more than ten years since the release of the Bitcoin white paper, the encryption market has experienced multiple rounds of bull-bear transitions, and each round of bull market will increase its volume several times compared to the past. At the bottom, what people often lack is confidence and hope in the industry, which may also be the origin of the name of the new project of Flex Yang.
HOPE is an ecosystem native token that combines CeFi and DeFi, and is committed to providing all users with a barrier-free, open and transparent financial foundation Facilities and services. According to Flex Yang's vision, HOPE's ultimate goal is to become a value reserve currency in the DeFi world.
There are countless people in the encryption world who want to create a value reserve currency, which was issued by Paxos, BUSD authorized by Binance, followed by USDC issued by Circle. However, the former was investigated by the SEC and had to stop its development. The latter has recently been destabilized due to the bankruptcy of Silicon Valley Bank, the fund reserve custodian bank, and the price of USDC has been discounted by more than 13% compared to USD.
From the perspective of BUSD and USDC, the current main centralized and compliant stablecoins still exist There are many risks, and it is impossible to achieve a 1:1 anchor with the US dollar.
BitMEX founder Arthur Hayes, once known as the king of Bitcoin leverage, also announced that he will launch the US dollar Stablecoin NakaDollar. NakaDollar is a derivative stablecoin formed by holding 1 Bitcoin and 1 Bitcoin perpetual short contract. Although the design of NakaDollar is relatively simple, there are still a lot of details that need to be considered, such as how to deal with long-term negative fee rates for short-selling contracts, and even the expansion of negative fee rate exposures when hard fork events occur, etc. NakaDollar may face question.
SAR with "HOPE" and "LIGHT"
The HOPE ecosystem will consist of HOPE and LIGHT (LT) dual tokens.
HOPE EARLY PASS ANCHORING BTC/ETH is thus minted and burned. In the growth stage, the price of HOPE will fluctuate with the price fluctuation of the anchor. At this time, HOPE can be considered as an ETF of BTC and ETH. This method effectively avoids the occurrence of the Terra death spiral event. When sufficient reserves or even excess reserves are reached, HOPE will enter a mature period, and the price will gradually anchor at $1 until it becomes a stable currency. After maintaining the excess reserves of ecological stability, the assets involved in the pledge casting of HOPE will be expanded by voting. For example, the anti-censorship stable assets Curve 3Pool LP Token, DAI, etc. have the opportunity to become pledges.
Growth stage, HOPE casting and Destruction process
According to reports, at the project start-up stage, users will have the opportunity to obtain HOPE at a discounted price of $0.5, and HOPE’s The price will also fluctuate with the fluctuations of BTC and ETH, until it grows to $1, the price will be anchored and become a stable currency.
LT is mainly used as a community governance token in the HOPE ecosystem, participating in the management of the agreement and dividends. Users mint stHOPE by staking HOPE, and holding stHOPE can get LT rewards.
LT holders who want to participate in HOPE ecological governance need to pledge LT to obtain veLT. The specific amount of veLT will depend on the number of LT participating in the pledge and the duration of the pledge. When HOPE enters the mature stage, veLT holders will be able to participate in the formulation of rules for the use of excess reserve assets and enjoy the dividends brought by the agreement. This also means that LT will have bribery value, just like Curve’s governance token CRV. At that time, there may be spontaneous organizations in the community to participate in the construction of the LT election bribery ecology, resulting in a HOPE War like Curve War.
As a special zone in the encrypted world, in addition to Token, it also needs to support ecological construction.
In the first phase, HOPE will launch HopeSwap and HopeLend to facilitate users to participate in Token swap and lending. Income generated from trading and lending will be returned to HOPE holders. At this stage, HOPE is anchored to BTC and ETH. From a product perspective, HOPE is similar to the shark fin option structured product previously launched by PayPal Finance. However, unlike before, HOPE is completely transparent on the chain, and assets are completely autonomous and controllable.
In the second phase, HOPE will start to bridge DeFi and CeFi, and the first product HopeConnect will bridge DeFi and CEX. Users can trade derivatives on CEX through HopeConnect while remaining anonymous and non-custodial. The second product, HopeEcho, will support the creation of "eAssets" synthetic assets, including but not limited to traditional financial products such as stocks, commodities, and foreign exchange.
The third stage is also the mature stage of HOPE, and the HOPE ecology will become a one-stop hybrid financial platform. DID, DeFi Passports, ZK KYC, on-chain reputation system, etc. will all be integrated into the HOPE ecosystem.
After completing the deconstruction of HOPE, it is not difficult to find that it contains the shadow of many previously popular DeFi projects. And there is no shortage of traditional financial design ideas. In the early stage of project development, the first batch of users are attracted through discounts and expectations, and this group of users can enjoy the benefits of BTC and ETH beta as the project grows. When the project has accumulated enough potential energy, HOPE began to break away from BTC and ETH and generate alpha income by itself. In the process of turning from beta to alpha, governance Token LT will also complete the value capture due to market demand.
Of course, the current Flex The HOPE project has just been officially announced, and we cannot predict whether HOPE will be able to achieve its ultimate goal. From the design, we can also vaguely see the shadow of Terra. There are many reasons for Terra's failure. Anchor's 20% excessive income, the sudden announcement of Bitcoin's addition to the reserve, and the lack of time are all reasons for Terra's failure. Hope seems to be optimizing, and we will wait and see how far this experiment can go.
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