Improved revenue support from "DeFi Summer" to "DeFi 2.0"

Contents:

The first "Legos currency" in the DeFi ecosystem, including LP Tokens and Decentralized Stability Coins, created the conditions for further improvement of DeFi.

DeFi 2.0 is a new term in the ecosystem, which refers to a new subset protocol based on the original Lego currency to support the current DeFi ecosystem, primarily in the form of liquidity products and 'incentives.

With the addition of this new funding, the entire DeFi business has become faster, more secure and more usable.

Decentralized finance, also known as DeFi, is one of the most influential and successful waves of blockchain-based innovation. Developed from the blockchain with built-in smart contract capabilities and secure Oracle networks such as Chainlink, DeFi represents a wide range of decentralized applications that break traditional financial services and release new financial solutions.

Driven by its unique quality of data acquisition and open source development culture, the DeFi protocol continues to evolve and repeat the mature financial model. The DeFi ecosystem is improving rapidly,The rise of business-focused DeFi in recent months has given rise to a new DeFi called DeFi 2.0.

DeFi 2.0 is a common term in the blockchain community, often referred to as the DeFi Protocol Group and designed for previous DeFi enhancements such as farm income and loans. An important thing to note in the DeFi 2.0 protocol is the use of native tokens to overcome the restrictions imposed by the multiple processes in the chain.

This article covers past changes to DeFi 2.0 migration, highlights negative issues that the DeFi 2.0 protocol attempts to address, and examines electronic devices and applications. New financial model introduced by the DeFi 2.0 ecosystem.

Early installation of DeFi

The first DeFi pioneers such as Uniswap, Bancor, Aave, Compound, MakerDAO, etc. have established a solid foundation for the DeFi commerce industry and have introduced many important and established 'currency legos' into the ecosystem.

Uniswap and Bancor are the first manufacturers of unregulated tokens (AMMs), giving users the ability to exchange tokens without interruption. Aave and Compound introduced low-interest loans, collected income, and put capital to work illegally. MakerDAO offers protection against cryptocurrency trading by allowing ecosystem users to hold stable and profitable profits.

These deals allow users to get reliable exchanges, no credit loans, and stable connection benefits. These are the three main financial resources that exist in the traditional financial industry. However, the following process recognizes DeFi-based services as being completely different from the organization between transparency and user control. The use of various technologies behind these interrupt services is the basis of DeFi innovation.

DeFi innovation in tandem

The Automated Market Maker (AMM) Decentralized Exchange (DEX) Liquidity Provider (LP) token is a prime example of blockchain-related DeFi innovation. Although DEXs have been used successfully as an alternative to book swapping, the most popular DEXs use an AMM model called the Constant Product Automated Market Maker (CPAMM).

AMM's decentralized liquidity pool is used to facilitate the token exchange, where financial service providers often provide the equivalent amount of each cryptocurrency to support the token exchange. In return, they will receive LP Tokens representing their share of the pool and the value they receive to facilitate the exchange.

The LP token had an impact on DeFi innovation as it was quickly adopted in many ways by other DeFi processes. For example, lenders like Aave and Compound are reiterating the idea of ​​providing users with receive tokens representing simple deposits, now known as aTokens and cTokens.

Illegal authorization of AMM and LP tokens also supports DeFi initiatives and does not require going through the process of registering an intermediary exchange to create tokens. If there is enough water, the new tokens can be redeemed immediately on the DEX. However, if there is not enough capital, users will have to pay stars for large trades due to the DEX's limited trading capacity and the availability of slippage. This led to one of the most important issues presently present in DeFi: the financial problems.

liquidity problems

Since the early days of the DeFi industry, the market has been frustrated with many DeFi transactions. The entire ecosystem is run by tokens as a way for groups to collaborate on promotions, collect rewards from valued users, and be part of the larger DeFi ecosystem. However, in order to provide consumers with the ability to mine commercial tokens over the AMM protocol, the DeFi team needed to build capacity at scale.

Part of the answer to this question can be found in the third-party providers of the AMM protocol. This allows the freelancer with sufficient funds to pass the income on to the token pair, allowing the group to receive tokens from others. It provides its own liquidity. However, end users have no incentive to generate revenue for new tokens. In effect, this means exposing yourself to a shorter period at the risk of falling in exchange for less trading income. They need a good financial reason to take these risks.

This can cause chicken and egg problems. Insufficient water will prevent users from participating in the DeFi protocol ecosystem due to swap slippage. Token exchanges do not generate sufficient value to encourage third-party players to join tokens and generate income or non-participating users.

Thus, another major DeFi change was born. Gift-based LP tokens have become an important way for DeFi to bring a new protocol to market, a process known as farm income.

farm income

The emergence of profitable agriculture (also known as liquid mining) led to an increase in DeFi games during the summer of 2020, which blockchain enthusiasts have called the summer of the "season." Challenge".

The concept of farm income is simple. The users promise to provide revenue for the exchange in the form of an AMM protocol pair, and after receiving LP tokens, the LP tokens will be rewarded with the project client's tokens. This approach solves the chicken-and-egg problem and provides a strong marketing opportunity for third parties to be able to optimize their tokens i.e. higher discounts. . Besides generating more value through AMM trades, you can gain more competitive advantage and get more project-based tokens in deep water promotion. .

With the introduction of profitable agriculture, new DeFi operations can bring many resources to start and manage operations and reduce user access to the ecosystem. This has led to a further expansion of DeFi contracts, recognizing that farm income has reduced the impact on user and developer access to DeFi operations.

Restrictions on farm income

Despite the positive results, he could not solve the problem of skepticism on his own due to the particular restrictions on long-term income from farming. Farm Income did a good job of directing the initial investment, but it needs to follow a long-term plan to ensure long-term, profitable income.

This is because farm income has a peculiarity of dilution equipment. The team sought to distribute existing resources to providers and provide additional revenue to help providers leverage the waters of AMM lakes. However, as more tokens are distributed to third party vendors, the percentage of total tokens given to the lender and vendor can pull the water well at any time and sell the product to secure the LP contract. The DeFi team is not sure if the rewards will expire or if the financial resources will remain, and making the rewards worthwhile at a higher level for the next period will be gradual.

As plans move up to other MDA chains and follow MDA contracts on the same chain, more economically intensive agriculture needs to be brought to the fore. This means that the above restrictions allow DeFi operations to be the equivalent of an extension for several AMM contracts, but without human, means or data to improve.

Third party financial service providers should be encouraged to provide income at their highest risk. The newly launched tokens seem unchanged, hence the risk of a lasting fall offsetting the exchange rate of the AMM contract and the income from agricultural income. This represents a conflict of interest model for third party vendors who do not have multiple avenues to manage revenue generation and revenue generation risks.

Farm income is a lucrative way to provide liquidity for DeFi operations, but it is not without long-term risks. For most DeFi tasks, carrying out a financial and cultural plan is appropriate and efficient, but the plan requires careful consideration of token resources and long-term strategies to avoid unwanted effects.

DeFi 2.0 and financial stability

In terms of liquidity, DeFi 2.0 represents a few new DeFi projects which hopefully all have issues with liquidity supply and support. They offer alternative approaches and additions to profitable agricultural models and provide an opportunity for long-term resource management plans. But how does a traditional blockchain-based token project manage healthcare liquidity and distribute it in an ideal way?

Liquidity is offered by OlympusDAO and contracts

One of the solutions that will emerge in the DeFi community in 2021 is the OlympusDAO Standard Contract (POL), which focuses on Contractual Capacity (POL).

OlympusDAO reverses the farm income letter with the contract template (contract). OlympusDAO has expanded its product line by exchanging third-party LP tokens at a discounted price in exchange for the first contract tokens using the loan-less contract. This benefits the contract and all operations that use them (such as contract services). Bonds allow entrepreneurs to buy their own capital, eliminate the possibility of runoff, build a regular pool, and generate income for the contract.

On the other hand, users are encouraged to trade LP tokens by contract as the contract grants a discount on the tokens. For example, if the price of Token X is 500 USD and the discount rate is 10%, the user can donate 450 USD in the price of LP tokens to get 500 USD of Token X. The result is the income of $ 50 short term basis (usually about 5 days a week) to prevent traders from deducting fees.

Another important source of income to focus on is income if loan rates are volatile and limits may be tight. This serves an important code purpose, allowing you to control two forces: the speed of the token exchange rate and the total exchange rate.

In order to control the price of contract product token market expansion, if more users buy the contract, the discount price will decrease or worse. Contracts can also determine the income of leather hats. In this case, the contract is no longer in place and we have more control over the expansion of the equipment based on incorrect decisions.

realigned incentives

This multi-faceted model will help balance support from third-party financial service providers and chain contracts. Compared to independent third-party financial service providers, these contracts offer better protection against permanent losses. Third party providers face low representation costs in all other watersheds and agricultural contracts in the market, but these contracts have more motivation to manage the activities. The value of each ecosystem.

Finally, OlympusDAO's contract design model can safely reduce the risk of water pollution in the long term. The DeFi process combined with farm income now provides a wide range of tools to carefully plan the stages of growth, from capitalization to long-term growth. .

Direction of flow to the Tokemak reactor

Another DeFi 2.0 project focused on drainage is Tokemak, a DeFi protocol designed to improve water and water flow. In short, the Tokemak measure aims to improve the potential of both parties: Tokemak Protocol and Potential Service Providers (LPs), and to make it more effective for Business Management (LD) sex.

Here is the type of work. Consider the contents of an LP token. Financial service providers are required to send the equivalent of two services in a single exchange. Constant losses occur as weights change and prices change. To solve this problem, the Tokemak protocol keeps coins stable and keeps them in the first level of assets as the token pair emerges. This is part of the liquidity pair. For Uniswap's X-ETH token liquidity pool, the Tokemak reserve helps ETH.

Independent third-party financial service providers and DeFi operations can be brought together to generate Token X revenue. Meanwhile, Liquidity Directors (LD) have become important. The Liquidity Director uses two liquid methods to integrate the native Tokemak tokens, then directs the water to the general AMM protocol to control the water flow.

The balance of water flow and the direction of liquidity

The end result of this system is that Tokemak's drainage system is committed to achieving the goal of high efficiency and high efficiency across the entire DeFi ecosystem.

Business leaders turned out according to the voting process and businesses received Tokemak tokens to provide an easy way out. The different incomes earned by each party are equal to each other to complete the comparison between entrepreneurs and business providers so that the income of the managers is good.

This can be beneficial for DeFi operations, especially those managed by DAOs, as well as for farmers and financial service providers. Initially, Tokemak's one-sided asset allocation allowed DeFi projects to provide primary liquidity using only native tokens, thereby eliminating the need for liquidity from stability coins and primary assets. The Tokemak Reactor can provide alternative revenue options for third party service providers and farmers who permanently reduce their downfall by providing DAO performance models.

Another DeFi 2.0 upgrade

Another subset of the DeFi 2.0 protocol builds on previous monetization mechanisms and tools to develop new financial tools.

A prime example is Alchemix, a self-service loaner with a “no business” concept. This contract borrows 1: 1 connected agent tokens with the loan asset. For example, by offering the Stabilitycoin DAI as a commodity, users can borrow 50% of the money in alDAI. Consolidation is then transferred to revenue to form contracts and gradually increase.

Alchemix can provide a secure lending platform that users can use and save at the same time through a combination of tokens and rewards.

Another DeFi 2.0 protocol, Abracadabra, uses a similar process, but its system interferes with MakerDAO. Users can report income along with income and get stable cash back from MIM to generate income and be safe for business users while managing business product risk.

Liquidity contracts, process efficiency or profit margins won't exist if there aren't new developments starting to make a difference in the industry. , such as AMM protocol, decentralized stability coins and oracles. From the basics of the AMM LP token and decentralized stability coins to the modern DeFi 2.0 protocol, every project is an important iteration in the development of a decentralized industry.

Devise lego DeFi

Lego Money is a great example of thinking about how the DeFi business works. New technologies and new technologies can be combined with all the designs of others to create something more than the equivalent of a product.

DEX and LP tokens are one of the most important Lego assets in the blockchain industry, enabling a large exchange of token chains and leading to agriculture. The first wave of decentralized stability coins paving the way for a new design of stability coins and a decentralized lending platform with confidential means of oversizing and risk mitigation. Chainlink's off-chain data and services include the following requirements for several DeFi applications that support these innovations.

Such advantages Lego cannot design in isolation and must be seen as an integrated ecosystem that promotes, connects and introduces different products to create new capabilities. The combination of Chainlink Price Feed and AMM LP tokens provides a great farming experience. By integrating seamlessly into AMM, users benefit from the security that can be achieved through shared exchanges.

With the release of DeFi 2.0, a new generation of currency, Lego, developed in the previous version, makes the decentralized financial environment better, more user-friendly and useful for participants. Lego's benefits extend to every additional square, giving new value and time to the DeFi ecosystem.