Daniele’s three-piece suit captures three major DeFi scenes

On January 4, Rune Christensen, the founder of the decentralized stablecoin application Maker DAO, was a bit angry. He publicly accused the popular public chain Terra (LUNA) supported stablecoins UST and MIM as “Ponzi schemes” on social media. This remark caused intense discussion in the encryption community.

Some voices believe that the market value of the UST and MIM stablecoin projects threatens the leading position of MakerDAO’s DAI in stablecoins, which led to Christensen’s remarks. As a stable currency on the Terra chain, UST has been well known by the market. And MIM will pose a threat to DAI in less than one year?

According to Coingecko data, the current market value of UST is 10.3 billion US dollars, MIM is 4.5 billion US dollars, and DAI is 9 billion US dollars. The market value of UST surpasses DAI, and MIM already accounts for half of DAI’s market value.

As a stable currency generated in the lending agreement, MIM has not yet shown its edge compared to UST, but Christensen’s speech has drawn the market’s attention to this stable currency created in May 2021. Its founder is Daniele Sestagalli. A DeFi protocol is well-known, and he actively speaks on Twitter. Most of the content is related to DeFi.

In 2021, Daniele built multiple DeFi applications. As his Twitter signature “Occupy DeFi” shows, the intention of “Occupy DeFi” is conveyed through his actual actions. These applications include the DeFi revenue manager Popsicle (ICE), the lending application AbracadabraMoney (SPELL+MIM), and the algorithmic stable currency Wonderland (TIME).

According to the statistics website DefiLlama, the total value of encrypted assets (TVL) currently locked by the Abracadabra Money application is US$6.15 billion, which is among the top 15 DeFi applications TVL included on the website, and the amount of funds managed by Wonderland Treasury is 850 million. In US dollars, Popsicle manages nearly 200 million US dollars. At the most enthusiastic time, the assets under management of the three applications exceeded tens of billions of dollars.

Some people refer to these three projects as the “Daniele Three-Piece”, which involves the three mainstream scenarios of DeFi, lending, asset management, and stable currency. This issue of DeFi Cellular will sort out Daniele’s representative applications in the DeFi field, and get a glimpse of how he is conquering the city in the DeFi world.

LP Asset Income Manager Popsicle Finance

Introduction

Popsicle Finance (ICE) is Daniele’s first DeFi project. It was originally built on the Fantom and BSC chains. It is a cross-chain revenue optimization application and is often referred to as a machine gun pool. At present, it has been deployed in multiple chains, running on multiple blockchain networks such as Ethereum (ETH), Fantom (FTM), Binance Smart Chain (BSC), Polygon (MATIC) and Avalanche (AVAX). It is reported that In the future, it will support other blockchains compatible with the Ethereum Virtual Machine (EVM).

At present, the coexistence of multiple chains has given birth to various DeFi applications. For users who gain revenue by contributing liquidity, funds must not only switch between different applications on the same chain, but sometimes also require funds to cross-chain. Not to mention the cumbersome operation, the friction cost of the chain handling fee is also extremely high. Users urgently need an application to increase liquidity rewards on different chains.

The team led by Daniele hit this pain point and built a cross-chain revenue optimization application Popsicle, which allows users to provide liquidity on any chain at any time to improve the rate of return and capital utilization of liquidity providers. It analyzes the DEX liquidity pool data on multiple chains to find the liquidity reward pool with the highest return rate, and then automatically allocates the user’s LP funds to the liquidity pool with the highest return rate to capture the maximum profit for the user.

Providing cross-chain liquidity is not the ultimate goal of Popsicle. It is its ambition to allow users to access DeFi applications on various chains through the platform. Regardless of whether the user is active on the Ethereum or the BSC chain, the application is the terminal. It hopes that the user does not need to think about the chain anymore, but directly goes to the application based on the revenue.

Daniele's three-piece suit captures three major DeFi scenes

Popsicle official website

Operating mechanism

After Popsicle receives the assets of the liquidity provider, it will automatically compare the DEX fund pools of different AMM mechanisms on multiple chains, select the best revenue strategy for the user, and then automatically deploy the user’s LP funds to the fund pool with the best revenue middle.

The structure that realizes automatic deployment is called Sorbetto, it is a revenue optimizer, users only need to deposit encrypted assets in it; after that, these assets will be allocated to each DEX liquidity pool to pair to form an LP; Sorbetto will monitor the liquidity pool And adjust these positions to maximize the rate of return and capital efficiency.

Sorbetto is mainly composed of two products, the V3 optimizer “Sorbetto Fragola” and the multi-chain optimizer “Sorbetto Limone”.

  • V3 optimizer Sorbetto Fragola-a product developed mainly for Uniswap V3 liquidity providers, which solves the problem that users need to set and choose LP price ranges according to the profitability strategy. Users only need to choose to deposit LP funds on Fragola. The tool will optimize the price range of LP according to the historical fluctuations of assets, set strategies, and adjust the return rate of LP funds, which simplifies the actions of users to adjust positions and saves GAS fees. At the same time, the optimal rate of return is obtained.

     

    In addition, after the user deposits LP assets in Fragola, he will receive a PLP certificate, which is the position of the user in the Popsicle application.

 

Daniele's three-piece suit captures three major DeFi scenes

Asset return after optimization of PopsicleV3 gainer

  • Multi-chain optimizer Sorbetto Limone-it is basically a liquidity aggregator that can automatically maximize the transaction fees earned by liquidity providers. Users only need to deposit encrypted assets in the tool without manually checking DEX liquidity Limone will automatically calculate and set strategies for the transaction rate and rewards of the pool to obtain transaction revenue for the liquidity provider.

ICE is the governance token of Popsicle application, with a total supply of 67 million, which is mainly used for voting on community proposals. Currently, users can pledge ICE to nICE, because the revenue optimizer Sorbetto will distribute part of the product profits to nICE holders.

In the future, Popsicle will also launch the loan product Gelateria, which will support the LP Token or PLP Token of liquidity providers as collateral, and borrow other assets to earn other income. In this way, by optimizing the LP funds in the DEX liquidity pool, Popsicle has derived a DeFi application that integrates “asset income management” and “borrowing”.

Borrowing app Abracadabra Money is born for interest-bearing assets

Introduction

Abracadabra Money (SPELL) is a multi-chain lending application created for interest-bearing assets. Initially built on Ethereum, it has been deployed in multiple chains, running on multiple chains such as BSC, Arbitum, Avalanche, Fantom, etc.

Daniele's three-piece suit captures three major DeFi scenes

 Abracadabra Money official website

“Interest-earning assets” is simply understood, that is, those assets that can bring interest income in DeFi applications, usually from the lock-up of the application’s native assets. You can understand it as the deposit certificate or receipt obtained by the lock-up of the native assets. , Some people call it the tokenization of “interest-bearing bonds”, such as:

  • nICE-it comes from users who lock ICE on the Popsicle application, and users who hold nICE can get a profit share on the Popsicle platform;
  • xSUSHI——It comes from users who lock SUSHI in SushiSwap. Users who hold xSUSHI can get regular dividends of SushiSwap transaction fees;
  • yvVault assets-it is the collective name of interest-earning assets such as yvYFI, yvUSDC, yvUSDT, yvWETH, etc. It is the lock-up voucher for YFI, USDC, USDT, WETH and other fund pools in the machine gun pool application Year V2. Holding yvVault can get on Year V2. Corresponding to the income of the fund pool.

Before the launch of Abracadabra Money (hereinafter referred to as Abracadabra), holders of interest-bearing assets could only receive regular dividends from lock-up income or exercise voting governance rights. However, since interest-earning assets do not support market circulation or transactions, these lock-up vouchers can only lie in the user’s wallet and cannot be used efficiently.

The Abracadabra application aims to “release the liquidity of these interest-bearing assets” and help users who hold interest-bearing assets to increase the utilization rate of their assets.

Operating mechanism

Users can deposit interest-bearing assets in the Abracadabra application, and then use the interest-bearing assets as collateral to mint the stable coin MIM (Magic Internet Money). MIM is a stable currency linked to the value of the U.S. dollar. Like stable currencies such as USDT, DAI and USDC, it can be exchanged in some DeFi applications.

How much MIM you get depends on two aspects, one is the value of the interest-earning asset mortgaged, and the other is the maximum quota allocated to the interest-earning asset.

To give a simple example, Xiao Ming is worth 10,000 USDT in interest-bearing assets, yvYFI. He urgently needs 1,000 USDT now, but he believes that the price of YFI will rise in the future and does not want to destroy yvYFI’s interest-bearing income on Year. At this time, he can mortgage yvYFI to the Abracadabra application, mint 1000 MIM, and then convert the 1000 MIM to the stable currency exchange agreement Curve for 1000 USDT. When his funds are turned over, he can redeem the 1,000 MIM debt and get back the original amount of yvYFI. If he does not return it, the Abracadabra app will deduct the equivalent yvYFI from his account.

By allowing users to mortgage interest-bearing assets to lend stablecoin MIM, Abracadabra expands their usage scenarios, which also releases the liquidity of interest-bearing assets.

Abracadabra issued the application token SPELL. The maximum supply of the token is 210 billion. Users can pledge it in Abracadabra to obtain sSPELL. Users who hold sSPELL can vote to decide which interest-earning asset can be used online, and can also vote to decide the loan interest rate, liquidation rules, etc. of the application. Of course, like many interest-earning assets, holding sSPELL can also get the income dividends applied by Abracadabra.

The asset liquidity released by Abracadabra is likely to be the source of TVL for Daniele’s many DeFi projects.

A basket of algorithmic stablecoin Wonderland

Introduction

Wonderland (TIME) is the first decentralized reserve currency application on Avalanche (Avalanche Protocol), which aims to create a free floating reserve currency TIME supported by a package of encrypted assets through a specific algorithm.

Wonderland is actually a fork project of another algorithmic stable currency OlympusDAO (OHM), and it is also a series of projects of Daniele and his anonymous team.

 

Daniele's three-piece suit captures three major DeFi scenes

Wonderland official website

Due to the high volatility of BTC and ETH assets in the crypto market, the stable currency USDT linked to the U.S. dollar has become an important part of the crypto market. Although users have become accustomed to using stable currency transactions, since the U.S. dollar is controlled by the Federal Reserve, the depreciation of the U.S. dollar also means the depreciation of the stable currency linked to it, which means that the purchasing power of crypto users is decreasing.

Wonderland is trying to create an algorithmic stablecoin TIME that is not pegged to the dollar, making it an algorithmic reserve currency backed by other decentralized assets. No matter how the market fluctuates, this algorithmic stablecoin can maintain its purchasing power, just like gold. Adjust its price fluctuations through the relationship between supply and demand.

Operating mechanism

The TIME price in Wonderland does not anchor any assets. Each TIME is backed by a basket of encrypted assets in the Wonderland vault, including a single Token and LP Token pair.

Among them, a single Token asset includes MIM and wAVAX (Avalanche Protocol Native Token AVAX encapsulated assets); LP Token pair assets include TIME-MIM, TIME-AVAX, etc.

Wonderland rules stipulate that each TIME is supported by 1 MIM, not linked to it. At this time, Wonderland Treasury needs to reserve MIM to support TIME, and control the price of TIME at 1 MIM. When the price of TIME is lower than 1MIM, Wonderland will repurchase and destroy TIME to reduce the supply of TIME and return the market price to 1MIM; when the price of TIME is greater than 1MIM, Wonderland will sell TIME at a discount to increase the circulating supply of TIME , Its price fell back to 1 MIM.

You might think that the intrinsic value of TIME is 1 MIM, which is about 1 US dollar, and its secondary market price should also fluctuate around 1 US dollar. But in fact, Wonderland’s algorithm stipulates that the actual price of TIME is determined by market supply and demand and floats freely. The current price of 1 TIME is US$2,798.

At present, there are two ways to cast TIME, one is to use MIM single Token, and the other is to use LP assets. In other words, users can use MIM or LP assets to obtain TIME from the Wonderland app at a discounted price.

Daniele's three-piece suit captures three major DeFi scenes

Mint TIME

In addition, users can obtain MEMO voucher by locking TIME, which will be automatically compounded according to the current rate of return; users can also encapsulate MEMO into wMEMO such an interest-bearing asset via DEX, which can be used as collateral on Abracadabra.

There are two ways for users to profit through Wonderland. One is to pledge TIME to earn more TIME through automatic compound interest; the other is “coin”, that is, to provide LP assets (TIME-AVAX, TIME-MIMLP) or single Assets MIM, wAVAX, cast TIME at a discounted price to earn the market price difference.

It should be reminded that the Wonderland code has not been audited, the price of TIME fluctuates, and users need to pay attention to the safety of funds.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/danieles-three-piece-suit-captures-three-major-defi-scenes/
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