DeFi researcher Ignas said that the innovation of token economics from 0 to 1 is very difficult, but the occasional emergence of extremely innovative tokens will change the development trajectory of the industry. The ingenuity of new token economics will propel the industry forward and have the ability to initiate a new bull market. Some of these tokens have appeared in the last DeFi bull market. And that can serve as a reference for the next bull market and teach us how to identify emerging opportunities.
In this article, Ignas reviews the most innovative coins from the last bull run.
1. AMPL by Ampleforth
AMPL elastically supplies tokens whose circulating supply is algorithmically adjusted on a daily basis. Its target price: 2019 US dollar purchasing power expressed in CPI.
If AMPL demand increases and the price is above the target price, the protocol will “airdrop” new AMPL tokens proportionally to your Ethereum address to restore the target price.
The so-called “rebase” works like magic: it changes the token balance in your wallet .
Confused? That’s the crux of the matter!
AMPL uses human psychology and trading game theory. Should you sell your holdings before rebase? Or after a rebase, would it be better to buy while someone else is selling their newly acquired “airdrop” tokens? You decide for yourself.
2. OHM of OlympusDAO
OHM’s mission is to be the reserve currency for DeFi.
Olympus sells OHM at a discount through “bonding” in exchange for a liquidity supply or a single asset token.
In this way, Olympus is able to truly own its own liquidity rather than lease it.
Liquidity in a protocol is often considered revolutionary, and the term DeFi 2.0 was born . Additionally, Olympus’s bonding model and rebase game theory became buzzwords on Crypto Twitter.
OHM’s innovation has attracted dozens of forks, several of which are still doing very well.
3. COMP of Compound Finance
It’s hard to say what aspect of the COMP token itself is particularly revolutionary. The real innovation of COMP comes from the way it is distributed: liquidity mining .
Everyone who borrows an asset on Compound Finance gets free COMP tokens.
A week after its release, Compound’s TVL increased from $90 million to $600 million. The COMP token became the most traded DeFi token at the time.
While Compound wasn’t the first project to launch liquidity mining, it’s likely that Compound’s success kicked off that DeFi summer. With COMP, we have yield farming.
4. CRV of Curve Finance
The CRV veTokenomics model has changed the liquidity mining game theory .
The best practice for COMP yield farming is to acquire and sell COMP on a regular basis for compounding yields. However, Curve miners need to lock up CRV for up to 4 years to maximize their profits.
The result: Curve’s lock-up period and lock-up buy time for the protocol’s development, adoption, and benefits.
The success of CRV should be that its value proposition is attractive enough that after unlocking, CRV will not be sold at all.
I have previously researched more than two dozen DeFi projects that adopted the veTonomics model: why did they adopt this model? How does it work? What’s so special about it?
5. YFI of iearn finance
YFI kicked off the “fair launch” and “worthless governance token” trend of DeFi. There are no VC token sales, no team or advisor assignments. YFI is 100% distributed directly to community members.
“In order to abandon this protocol (mainly because we were lazy and didn’t want to keep doing it), we went a step further and issued YFI, a 0-supply token with absolutely no value. We reiterate that it has no financial value. No Pre-mined, no sale, you can’t buy it, no trades on Uniswap, no auctions. We have nothing.” — Andre Cronje, founder of YFI.
The purpose of free distribution of FYI is to combine the incentives of users and developers, so that users are willing to participate in the construction of the protocol. Andre Cronje later admitted that giving away the tokens was a mistake.
Don’t give away tokens, it’s not a common practice, mostly my personal lessons. I decided to distribute YFI for free because I believe it will allow me to build a strong community base. However, I still get blamed when prices drop, and I’m still constantly being asked “when is the next distribution”, “when is the update”, etc. I will still take all the responsibilities and expectations, just, I have no gain or benefit. Don’t do that, I’m a fool.
6. NXM for Nexus Mutual
The choice of NXM for Nexus Mutual is quite controversial. Nexus Mutual is an on-chain insurance protocol, and NXM tokens are equivalent to tokenized members. Members pay #ETH to the fund pool, and all members share risks with each other and share insurance compensation.
However, this membership token is not tradable on Uniswap or any other exchange.
The controversial part is that all members must be KYC verified to make purchases. If the regulatory environment for DeFi deteriorates, more protocols may choose the KYC token model.
7. Synthetix’s SNX
SNX is used as collateral for minting the synthetic stablecoin sUSD. Its innovation is to keep sUSD pegged to the US dollar, which is backed by the highly volatile SNX collateral.
How does Synthetix work? SNX holders are incentivized to stake SNX to mint sUSD and maintain a 400% collateralization ratio (C-Ratio) at all times. Every week, stakers receive additional SNX rewards and protocol fees, but only when the C-Ratio reaches 400% or higher.
More importantly, SNX stakers may incur “debt” when minting sUSD. Shared debt also changes as sUSD is used to trade other synthetic assets, and the prices of those assets go up or down. This means that SNX stakers risk the overall debt of the system.
These are the most innovative tokens in my opinion.
We can also add Maker’s DAI, which invented the first successful over-collateralized stablecoin, or Frax, whose algorithmic stablecoins are also very innovative.
Which coins do you think are the most innovative?
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/7-tokens-with-innovation-from-0-to-1-in-the-history-of-defi/
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