What solutions does Polkadot Eco offer?

Polkadot solves the problem of scaling by relay chains and parallel chains. What about liquidity issues? This article describes the financial problems facing Polkadot and its current solutions.

As the market focuses on the Bitcoin scaling issue for the Ethereum scaling issue, the Polkadot ecosystem is still evolving well and the Kusama and Polkadot Parachain begins to operate continuously. , However. It discusses two additional requirements for encryption and malfunction issues below.

Polkadot founder Gavin Wood hoped he had this problem when he worked as the CTO of Ethereum, so he was involved in many good solutions in Polkadot-based design.

Polkadot's core architecture uses a two-layer system of interconnected circuits to achieve optimal separation of security and application performance, while Ethereum 2.0 is powered by tag chain sharding or the beacon approach. Layer 2. Approval of a public chain or design process.

Liquidity problems of public chains or protocols

For the base architecture of PolkaDOT, whether it is the chain link security agreement or the use of the capital of Parachain, there are special commitments to the DOT currency platform, both a DOT closing income.

Following the popularity of DeFi, people began to measure the benefits of collaboration and the benefits of DeFi. The first maintains the integrity of the core network through staking processes, and the second is an impossibility for ecosystem development. Balancing the two in the competition between users and avoiding the situation where one falls on the other is an issue that the public broadcaster should consider.

There are also various solutions such as Lido, Bifrost, Acala, Stafi, and others.

The most representative of these is Lido, now Ethereum's largest solution, Lido has released support for public key chains such as Terra and Solana one after another, and will add support to the Polkadot ecosystem in the future.

How to properly open the lock of Polkadot Parachain?

Today, without discussing the differences between these solutions, let's start with the ecology of Polkadot and talk about how to fix financial issues in the Parachain auction process.

After securing network security through the telecommunications network, parties were granted the right to use Parachain's resources through competition, but since parties had to hold more DOT / KSM to succeed in elections, this this is not the case for most jobs. failed, so Polkadot introduced a machine called Crowdloan. Through this process, organizations can join the Parachain competition by increasing DOT / KSM by users. Lower the threshold for the election of Parachain.

However, a similar problem arose, the performance of each DOT / KSM parachain lock for different time, the more the DOT / KSM is closed, the water content of DOT / KSM will be lower again. Polka dot ecosystem, practice restrictions.

The rise of DeFi is giving consumers the advantage of asset management, and consumer demand for DOT / KSM resources can better meet their demand for rewards.

Our liquidity policy is now in the Polkadot ecosystem

Given this fluid problem in Polkadot's ecology, there are currently three main solutions.

Thought:

Acala is a well-known institute of Polkadot Ecology, determined to be a center of economic and financial stability. Acala typically has four systems: a cross-chain multi-asset mortgage stability coin system, a liquidity release protocol, a DEX trading platform, and an oracle machine. Acala is also a promising smart platform.

To solve the revenue problem, Acala developed a tool called LDOT (the Karura Pioneer Network Affiliated with LKSM) to release the revenue from the contract currencies platform, while also supporting the use of LDOT as a liability slip. in currency security. On the other hand, we add financial support from DEX and use these two measures to underpin the results so that L products can be as effective as possible.

In fact, some exit agreements that we have seen produce similar certificates of approval, for example, the Lido certification for ETH approval is called stETH and the Stafi certification for the recommended DOT experience is called rDOT. Due to liquidity issues, in the case of tokens, derivatives are different from the original assets, and since there is always some level of haircut, how to make them more liquid has become key to attracting users to their assets. assets based on guarantees. .

The Pioneer Network product portfolio works well with Karura providing a straightforward understanding of the operating system. The products shown below generally include the stable performance kUSD (Mint kUSD). , DEX decentralized exchange (Swap) and liquid staking. (Liquid staking). ) and other important items mentioned above.

Karura product interface

Floating staking currently only supports KSM staking and LKSM de-staking, and LDOT or LKSM is more of a layer encapsulation because KSM has promised not to be used for security approvals and parachain slot competition. . , similar to the difference between ETH and WETH, Acala does not appear to be a definitive financial solution.

Currently, Acala has 213,000 Twitter users and 36,000 Telegram users, and Acala has been widely recognized and completed as the first Parachain of Polkadot. The leading network Acala's Karura platform currency currently has a market value of $ 81 million and Polkadot's ACA token is not yet available.

bifrost

Bifrost is a DeFi protocol focused on the commercial real estate market.

Bifrost's investment allows users to get their benefits while receiving great benefits, and can trade, trade and participate in various DeFi activities. Derivatives can be traded for assets at a certain value, and they can continue to generate income, profitable assets.

Bifrost has also become an important part of mortgage lending, as lenders have become an integral part of Polkadot's ecology.

Bifrost group loan interface

In terms of using special procedures, since many tokens with different rules and interests can be generated due to differences in rental terms and payments during the tournament, Bifrost solutions separate the active token and the fair attribute, and vsToken (Voucher Slot Bonds) and we created two rounds of vsBond (Voucher Slot Bonds).

Among them, vsToken (vsDOT / vsKSM) is a homogenized token that represents the inheritance of users joining the token exchange and user engagement of Parachain. vsBond is a heterogeneous token that represents the different rental circle assets and auction giveaways that users support on Parachain.

This process allows vsDOT / vsKSM to be sold at any time without affecting Parachain rewards.

To resolve the unreliable problem of vsKSM, Bifrost set up a Zenlink DEX pool. Adding income to Zenlink and staking lp on a legitimate website can bring you great benefits. The liquidity of vsBond is resolved by placing an order (vsBond is a non-conforming order performance option) on the official website as shown in the figure below.

Interface Bifrost vsBond xaj

By depositing DOT / KSM on the Bifrost mobile loan to support the project, you can get four treasures: Bifrost vsToken and vsBond derivative assets, the currency of the Bifrost BNC Rewards platform, and the project evening token rewards.

Currently, Bifrost has invested a total of 170,000 vsKSM and 1.23 million vsDOT, and with the support of ETH2.0 and liquidity from DEX, the entire Bifrost ecosystem has nearly $ 150 million in 'assets.

What needs to be explained here is that since Bifrost only has one mainnet, BNC tokens will now be available on the Kusama and Polkadot networks, so the next step in the goal is to continue after Bifrost became Kusama's parachain. It became the Parachain of Polkadot.

Currently, Bifrost has 79,000 Twitter users and nearly 30,000 Telegram users, and its parent company, BNC, has a market capitalization of $ 17.25 million.

parallel

Parallel Financial is a new business platform for the Polkadot and Kusama blockchains, which aims to generate more revenue for the Polkadot / Kusama ecosystem. As loan requests from Polkadot / Kusama asset holders (such as DOT / KSM) increase with the expansion of DeFi, Parallel Finance supports our key role in development: loans, loans and crowds.

Parallel is similar to Bifrost. Token holders can earn “coupon” assets by depositing their assets into a Parallel Finance account. Parallel is called c tool and corresponds to cDOT and cKSM.

When you sponsor a project through Parallel's crowdlending feature, you receive 3 different tokens. One is the PARA parallel platform token prize, the other is the project side token reward, and the other is the heritage and heritage legacy.

Parallel group loan interface

Parallel's core module offers a lender, where users can place their cDOT / cKSM devices in the lender to earn additional interest. In addition, cDOT / cKSM can be used as a trading product for lending partners, and since cDOT is bound by the trading product of the token portion of the project in the form of lp, the Parallel derivative the asset also has some liquidity. .

Parallel has now generated 21.34 million DOT and 57,300 KSM, for total revenue of $ 550 million. Parallel is now one of the five Polkadot parachains.

Currently, Parallel has 53,000 Twitter users and 8,000 Telegram users, and tokens from both networks are not in circulation.

The following table describes the development scenarios for our project.

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concludes

Polkadot's green development is still in its infancy, and although few can use it as much as Ethereum and other mainstream public channels, DeFi's popularity has boosted consumers' lives.

For the Polkadot framework, the performance issues are more difficult because this performance involves both the basic structure of the token contract chain and the income of the competition.

Existing solutions can be seen as protective devices: on the one hand, they free up the capital of the equipment, and on the other hand, they strengthen and improve the profits of a variety of methods such as loans, business loans and mortgages.

Polkadot is a Layer 0 process, and as promised, the release industry continues to improve, its impact and impact on Polkadot participation is definitely reduced, and its ecosystem is expected to grow soon. The development of ecology in turn will strengthen the liquidity locking solution, if the scale is large enough, it can create a strong network effect and capture the distribution of ecological growth of the Polkadot road.