The rise of new lending forces: the new public chain VS Ethereum

About #raceway scanning

This research report belongs to Mint Ventures’s #raceway scanningscan series. Compared with the  series for comprehensive analysis of individual projects, the focus of the #race scan series is to pay attention to the development trend of the track and find the The representative projects are compared horizontally to grasp the dynamics and potential projects of each track in the encryption business.

Pay attention to the loan track

About #raceway scanning

This issue of #raceway scanningscan focuses on the lending track, especially the development and gaming trends of the new public chain camp and the ethereum camp’s lending projects.

Lending projects are one of the oldest and most important sectors in the Defi field, among which a large number of white horse-level projects have emerged, such as Aave, Compound, and MakerDAO. Most of the early leading lending projects were born in Ethereum, but with the rapid development of various new public chains in the past six months, many lending projects deployed on new public chains and multi-chain have emerged in large numbers.

In addition to the differentiation of the deployment of public chains, the business types of lending projects have also evolved from basic lending and stable currency lending to new businesses such as leveraged mining lending with targeted scenarios. In addition, credit lending mainly to institutional-level customers, risk grading agreements derived from existing lending agreements, and interest rate derivatives are also gradually growing.

Although many lending projects already have relatively mature business models and abundant cash flow income, there is still huge room for innovation in this industry, and it is still possible to give birth to new giants such as Aave. It is precisely because of this that lending projects are still one of the key directions of the DeFi entrepreneurial team.

After scanning the newly born projects in the past 2 months, we selected 4 more representative lending projects for key analysis. They either exploded rapidly in business or have unique mechanism innovations. Through this research Report, we try to answer the following questions:

  • What is the actual business situation of these projects?
  • What are their product positioning, mechanism or token design innovations?
  • For those fast-growing projects, what are the sources of growth and how sustainable are they?

The track value of the loan business

Like the trading platform, the lending project is also the basic liquidity layer of the crypto world. It plays the role of a bank in the crypto world. Its essence is to coordinate the supply and demand of funds from multiple parties and match liquidity across periods. The business ceiling of this track will expand simultaneously with the expansion of the scale of the encryption business.

On the other hand, the demand for matching funds is long-term, and there is no doubt about the sustainability of this track. Although the current funding needs for encrypted lending mainly come from investment leverage, arbitrage, and short-term capital turnover, with the progress of compliance, the channel between the traditional world and encrypted finance will eventually be opened, and the real-world collateral ( The introduction of lending platforms such as real estate and corporate credits, and issuing loans to non-crypto players through stablecoins are all things that are gradually happening, which will bring more room for development to the industry.

Whether as entrepreneurs, investors or ordinary users in this industry, the track of crypto lending is far from the final form. There are still a large number of new products and rich investment opportunities worth looking forward to.

As of September 16, 2021, Defi’s total TVL has hit a new high since May, reaching 180 billion U.S. dollars. Although the proportion of borrowed TVL has declined, it still occupies the bulk, with a TVL of approximately US$50 billion.

The rise of new lending forces: the new public chain VS Ethereum

The top 15 lending agreements of TVL (not including Makerdao , Liquity), data source: DefiLlama

In terms of outstanding borrowings, the current outstanding borrowing amount of all loan agreements is about 30 billion U.S. dollars.

The rise of new lending forces: the new public chain VS Ethereum

The total amount of loans in the loan agreement, data source: Debank

In terms of business volume, the established projects Aave, Compound and MakerDAO still firmly occupy the top three positions, and their TVL accounts for more than 70% of the entire lending market.

However, the rise of emerging lending projects is also amazing. The top ten projects in TVL include Anchor ($3.12 billion) on Terra, Benqi ($1.23 billion) on the avalanche agreement, and Qubit ($400 million) on BSC. Unlike the big three lending giants that originated in Ethereum, these fast-growing lending forces all come from Ethereum’s competitors, which is the hottest narrative at the moment-the new public chain.

What’s more surprising is that in addition to the earlier launch time of Anchor (in March this year), the official launch time of the other two projects is only less than one month.

In terms of the type of lending business, whether it is the number of projects or the amount of funds, the basic lending projects account for a higher proportion, followed by the lending projects of leveraged mining, and other relatively new products such as risk-graded interest rate products. The business volume is currently relatively small.

This research report will focus on newly born lending projects in the past 1-2 months with rapid business growth (TVL has entered the top 15 lending category), and Euler, a project with many innovative combinations in mechanism.


The rise of new lending forces: the new public chain VS Ethereum

The following is a detailed analysis and analysis of each item.

In the combing and analysis part, the author will present and analyze the product positioning, project characteristics, business conditions, token model and risk control of the four projects, in order to analyze these four emerging lending projects as a whole as possible.

Basic lending platform

Project Status

Product launch time: August 24, 2021

Qubit is a decentralized currency market that uses a mainstream borrowing capital pool model. Qubit’s development and operation team is the team behind Pancakebunny-Mound, which was first deployed on BSC, and there are plans for multi-chain expansion in the future.

Project Features

The main features of Qubit compared to other basic lending projects are:

  • Its token QBT can increase the rate of return of deposit users after lock-up, which is called “Boost” function
  • Qubit is part of Mound’s product matrix, and Mound’s products are highly combinable
  • Qubit does not support lightning loan function

Business conditions

Business data

Qubit’s core business data are as follows:

The rise of new lending forces: the new public chain VS Ethereum

We can find that although Qubit’s project has been online for less than a month, it currently has a considerable amount of deposits and the utilization rate of funds is relatively high. This is related to Bunny’s previous accumulation of a large number of BSC users and the relatively high amount of token subsidies for the project. Currently, QBT’s single-day subsidy is around US$190,000.

Product UI UX

Qubit’s product UI style is simple and clear, the interaction is smooth, the key data display is reasonable and detailed, and the overall user experience is better.

The rise of new lending forces: the new public chain VS Ethereum

Qubit product main interface,

Moreover, the current business data and risk parameters of Qubit’s specific assets are very detailed, and graphically processed, and some historical data can be checked. This is worthy of recognition.

The rise of new lending forces: the new public chain VS Ethereum

Qubit’s specific asset data,

Token model

Total and supply

The total amount of QBT is 1 billion, of which 57% is used for liquid mining rewards, and the remaining 43% is controlled by the team. The specific distribution ratio is as follows:

The rise of new lending forces: the new public chain VS Ethereum

QBT distribution ratio, source: Qubit project document

The total amount of 1 billion QBT will be distributed within one year, so QBT will face very high inflationary pressure in the next 12 months. The specific token unlocking rhythm is as follows:

The rise of new lending forces: the new public chain VS Ethereum

In my opinion, there are two core problems in the supply and release mechanism of Qubit tokens:

  • The proportion of team control is relatively high, and most of them have not set strict token unlocking conditions, and the long-term binding of team interests and projects is insufficient
  • The tokens of the liquid mining part are released too fast, which may cause the project to lack sufficient subsidy budget after one year, which is not conducive to the long-term development of the project

Token value capture

Core function: revenue acceleration

Up to now, the main function of QBT is to obtain qScore after lock-up. Through qScore, deposit users can accelerate their deposit income (from the increase in QBT deposit subsidies).

This mechanism is similar to Curve’s Locker mechanism. Curve’s Locker function and economic model consolidate its original competitive advantage and increase the switching cost of liquidity providers and investors. It is a very eye-catching design. However, when the mechanism is applied to a loan agreement, will it still have a good effect? The author remains skeptical about this.

First of all, the reason why some people are willing to lock up the position of Curve’s token CRV for a long time after buying it is caused by Curve’s strong position in the stable asset business chain and the competition for the governance power of Curve by multiple participants. Because governance power means two core resources on the Curve platform: the baton of liquidity and the accelerator of revenue.

Since the issuer of stable consideration assets (stable currency, st ETH and other pledge certificates and renBTC and other BTC cross-chain assets are all stable consideration assets), they have great requirements for the stability and transaction depth of their operating assets, so they choose Curve to Listing assets and attracting market-making liquidity are very rigid requirements, which creates a strong position of Curve relative to asset operators, which is determined by the business positioning of its Top1 stable asset exchange platform.

In terms of the expansion of asset lending scenarios, the demand from asset operators is far less strong, which results in a large number of less demanders for Qubit governance rights, and the overall lock-up willingness is difficult to reach the level of Curve.

In addition to the revenue acceleration function, QBT currently has no other functional scenarios, and there is no QBT repurchase or dividend mechanism for the borrowing spread income of the Qubit platform.

On the whole, QBT tokens are currently weak in capturing the overall economic value of the platform.

risk control

Qubit does not have a very special design for risk control. It basically uses a method similar to the mainstream lending agreement Aave. Each mortgageable asset has two types: LTV (Loan-to-Value) and liquidation threshold (Liquidation Threshold). The main parameters, the former determines the upper limit ratio of funds that can be lent for a fixed-value collateral, and the latter determines when the debt/collateral comes to the ratio, the liquidation window will be opened.

However, the current borrowing ratio of all Qubit assets is the same as the liquidation line, instead of Aave’s method of using the liquidation line to be higher than the borrowing ratio.

The rise of new lending forces: the new public chain VS Ethereum

LTV and liquidation line parameters of Aave platform assets, source: Aave document

The rise of new lending forces: the new public chain VS Ethereum

Qubit’s LTV and clearing line parameters (data not updated), source: Qubit document

At present, the borrowing rate of most assets on Qubit is 60%, which is slightly higher than the initial 50%. While this reduces the risk, it also reduces the pledger’s capital utilization efficiency to a certain extent, especially the mortgage rate of all stablecoin assets is only 60%. There is still a lot of room for optimization of the overall parameters.

In terms of contract security, Qubit only received an audit report from the Peckshield family before it went live in August, which was slightly thin, and the oracle used Chainlink.


The total deposits and TVL growth rate of Qubit was very fast since the launch of Qubit. The product’s data board function is complete, the product interaction is smooth, and the interface is more beautiful, but overall there are not many innovations. With the continued decline in currency prices and the dilution of subsidies by funds, the current decline in the TVL of the project is also very obvious. It is worth noting that, compared to other lending project tokens whose core value source is to capture the cash flow of the agreement, Qubit’s tokens are not currently linked to the project’s profit. The only function is to increase the deposit of tokens through lock-up. Subsidies, which also caused the intrinsic value of project tokens to weaken, and the high inflation of tokens further aggravated the selling pressure of tokens.

Licenseless lending platform


Project Status 

Product launch time: not online

Euler is a license-free lending agreement developed on Ethereum founded by Michael Bentley, a researcher at Oxford University. The development company is Euler XYZ. Euler XYZ won the Encode Club’s “Spark” college hackathon in 2020, and subsequently won a $800,000 seed round led by Lemniscap. Other participating funds include LAUNCHub Ventures, CMT Digital, Difference Ventures, Block0 and Cluster. And Luke Youngblood, an influential Coinbase angel investor. On August 25, 2021, the project announced that it has received a new round of investment of 8 million US dollars led by Paradigm. Other investors include Lemniscap and individual investor Anthony Sassano (The Daily Gwei), and Bankless founder Ryan Sean Adams With David Hoffman, Synthetix founders Kain Warwick, Hasu (Uncommon Core podcast).

Project Features

In response to the many shortcomings of existing lending projects, Euler has carried out quite a wealth of product mechanism innovations. Due to space limitations, only the key parts are introduced:

License-free listing mechanism: Provide a lending platform for long-tail assets

Compared with the current licensing system adopted by mainstream lending platforms, the introduction of assets on the Euler platform does not require a license, as long as the asset has a WETH trading pair on Uniswap V3. Of course, in order to protect users from low liquidity and the risk of violent fluctuations in long-tail assets, Euler divides assets into three categories based on the risk of assets:

  • Isolation layer assets: Users can deposit or lend assets, but they cannot use the isolation layer assets as collateral. In addition, if you want to borrow different isolation layer assets, users need to use different accounts on Euler to isolate different assets Between the risks.
  • Cross-layer assets: It can be used for ordinary lending and cannot be used as collateral, but it is possible to borrow multiple cross-layer assets with one account.
  • Mortgage layer assets: The assets of this layer are similar to those of most mainstream lending platforms. They can be used for ordinary lending, cross-borrowing, or as collateral. Cross-borrowing means that users mortgage assets in one account to borrow multiple mortgage-level assets.

By isolating assets with different risk levels, Euler tries to increase the supported asset classes on the one hand, and on the other hand to ensure that high-risk assets do not affect the security of mainstream assets.

Adopt dynamic interest rate model: improve the sensitivity and accuracy of interest rate pricing

This model is similar to the “dynamic interest rate model” designed by Delphi Digital for the Mars Protocol, the lending agreement of the Terra ecology. On the one hand, it improves the sensitivity and accuracy of interest rate pricing, and at the same time, it can obtain higher interest income for depositors and the agreement itself.

The rise of new lending forces: the new public chain VS Ethereum

The simulation of the mutual influence between the capital utilization rate and the borrowing rate in the Euler agreement, source: euler blog

To put it simply, the interest rate model is adjusted on the basis of mainstream lending agreements such as Aave. By adjusting the fund utilization formula, the interest rate can be more sensitively adapted to the real capital supply and demand situation of the market in real time, instead of the existing mainstream interest rate. The linear method of the model increases the interest rate. This can prevent the occurrence of a loan agreement that can only watch users use low-cost loans on their own platforms and then deposit them on other platforms to obtain high mining revenues for arbitrage. This will cause borrowers to have no incentive to provide loans, and lenders are unwilling The situation of repayment as soon as possible eventually led to the exhaustion of the liquidity of the loan agreement. The dynamic interest rate model is dedicated to solving such problems.

For details of the Euler interest rate dynamic model, please refer to “Introducing Euler” in the reference material.

A large number of improvements in the liquidation mechanism: optimization of the liquidation threshold, anti-MEV, internal multi-collateral pool

1. Combine mortgage rate and borrowing rate to customize the threshold of asset liquidation

Like mainstream lending agreements, Euler requires users to ensure over-collateralization, that is, the value of assets is greater than the value of liabilities. When the value of liabilities exceeds a certain ratio of the collateral, it will allow the liquidator to liquidate the mortgagor’s assets and repay the debt. But in the calculation of debt value, Euler also introduced the concept of borrowing factor. The liquidation threshold of each borrower is tailored to the specific risk profile associated with the assets they borrow and use as collateral. In other words, when the value of the borrower’s risk-adjusted liabilities exceeds the value of the collateral, it may be liquidated. Specifically, compared to the original lending mechanism, Euler’s mechanism also adds a multi-dimensional risk assessment of liabilities, which further improves the safety margin of liquidation.

2. Anti-MEV

At present, the main liquidation incentive model adopted by mainstream lending agreements such as Compound is: the liquidator can purchase the mortgagor’s assets with a fixed percentage discount. Under this mechanism, all liquidators face the same liquidation opportunity, and their potential profit percentages are the same, so they can only compete for liquidation opportunities by increasing Gas, where the high MEV value (Gas cost) becomes the liquidator’s The additional cost also increases the risk of the system. On the other hand, for mortgagors, the fixed asset discount auction ratio also allows them to lose the opportunity of lower losses and liquidation penalties.

In response to this problem, Euler’s plan is to use Dutch auctions in liquidation, which can ease the joint bid of liquidators and may also obtain lower asset liquidation losses for mortgagors. At the same time, Euler also provides a discount acceleration mechanism for the collateral provider, so that he is eligible to conduct self-liquidation before the liquidator conducts the Dutch auction and reduce the mortgagor’s loss. The above two measures are to restrict miners from grabbing too high MEV fees in the liquidation, so as to improve the overall security of the system in the liquidation storm.

3. Use internal multi-collateral stable pool for liquidation

In order to further reduce the transaction cost of liquidators in liquidation, Euler also borrowed the stable pool model pioneered by the Liquity protocol and expanded it into a multi-collateral stable pool form, allowing lenders to provide liquidity to the stable pool of each loan market. Support liquidation.

Liquidity providers in the stable pool earn liquidation collateral rewards by depositing eToken (a deposit certificate of the Euler protocol, similar to Compound’s cToken). When the liquidation is in progress, the liquidator directly uses the liquidity from the stable pool to repay the debts of the borrower, and will proportionally reward the liquidation collateral obtained to the stable pool, that is, the lender can eventually replace it during the liquidation period. The currency is passively converted into liquidation mortgage assets.

For example: Euler provides a stable pool for the USDT that lends assets. The lender who is willing to participate in the stable pool can deposit their own USDT deposit certificate eUSDT into the stable pool as the counterparty of the liquidator, so that the liquidator is auctioning After obtaining the mortgaged assets, the mortgaged assets are exchanged to the deposit users of the stable pool at a discounted price (after deducting their own income), which is equivalent to that the users of the stable pool purchase the collateral at a discounted price.

Compared with Liquity which only supports the LUSD stable pool, Euler’s multi-token stable pool contains specific types of tokens that have not been disclosed, but it is believed that it will still be based on stable currencies or mainstream currencies.

The advantage of adopting this mechanism is that the agreement believes that when the borrower reaches the liquidation threshold, the liquidator can use the internal liquidity source to immediately liquidate, without the need to exchange assets from a third-party trading platform, which greatly eases the liquidator When the market fluctuates sharply, the internal clearing price is inconsistent with the external platform price, and the high transaction slippage causes the liquidator to lose or fail.

In addition, Euler does not intend to use an external oracle, but uses the time-weighted average price (TWAP) of assets on Uni V3 and WETH to measure the ratio of assets to liabilities.

Business conditions

At present, Euler has only released its white paper and project documents, and the product has not yet been officially launched.

The rise of new lending forces: the new public chain VS Ethereum

Euler’s current product page

Token model

In the information that Euler has released, it has not disclosed the total amount, distribution method, unlocking time and other information of its governance token Euler for the time being. But it has made a preliminary outline of the functions and scenarios of its tokens. Euler will follow Compound’s governance paradigm, and its governance functions include the ability to determine the level of assets, important parameters of the agreement, and the framework of governance itself. In addition, Euler also has a Vault mechanism, which can ensure the security of the agreement through staking.

risk control

The rise of new lending forces: the new public chain VS Ethereum

Since the product has not yet been launched, the risk parameters of project assets and other information have not yet been disclosed. In terms of contracts, Euler has officially disclosed three contract security partners, including Certora, Halborn, Solidified, and ZK Labs (the two jointly issued reports), and they have obtained two contract audit reports. Since Euler has introduced more innovative mechanisms, the amount of native code is also large. The issue of contract security is the top priority, and the team still attaches great importance to it.


Euler is committed to becoming a Uniswap in the lending field, providing lending liquidity and composability for more long-tail assets, and has a strong investor background. The agreement has introduced many innovative mechanisms to address the shortcomings of the current lending agreement, but since the agreement has not yet been launched, the practical effects of these innovations remain to be seen. There is still no clear timetable for the launch of the project, but the administrator of the Chinese community Chris (Mr. the well-known encrypted KOL block) said that more news may be disclosed in September.

Unlicensed lending platform / short selling

Beta Finance

Project Status 

Product launch time: August 17, 2021

Beta Finance is a decentralized permissionless lending platform incubated by Alpha Finance. Its feature is that users can spontaneously establish currency asset pools, focus on the long-tail asset market, and focus on scenarios where assets are short-selling.

Beta Finance received a strategic investment in July this year. Investors include Spartan Group, ParaFi Capital, Multicoin Capital, DeFiance Capital and Delphi Digital. Generally speaking, the investors have a pretty good background.

Project Features

Compared with the current mainstream lending platforms, Beta Finance has the following characteristics:

1. Unlicensed money market

Like Euler, Beta Finance also pays attention to the long-tail lending market outside of mainstream assets and regards it as the main target market. Users can freely create asset classes that Beta Finance does not currently have to lend out their own crypto assets, but this feature has not yet been opened.

2. Provide a convenient asset shorting experience

Through Beta Finance, users can short an asset with one click by borrowing. Although users can also lend assets short on other lending platforms, they currently face two problems:

  • The operation is relatively cumbersome, requiring mortgage assets, lending short assets, and selling short assets to DEX. The cost of time and contract costs are relatively high.
  • Mainstream lending platforms only support mainstream assets, the range of options is small, and the price fluctuations of mainstream assets are small, and the potential for short-selling is insufficient

Beta Finance fits the needs of users on these two points.

First, it provides a one-click short-selling interactive interface for short sellers. Users can quickly select their short-selling collateral and short-selling objects, and Beta will automatically borrow the corresponding short assets through its own currency market and sell short on the selected DEX. , And then the assets obtained from the sale will continue to be included in the collateral to reduce risk. In this process, users do not need to interact with multiple protocols, thus saving high gas fees and avoiding rushing in the face of sudden market opportunities.

The rise of new lending forces: the new public chain VS Ethereum

Shorting interface of Link on Beta finance

In addition to the improvement of the short-selling experience and the reduction of costs, Beta Finance’s permissionless features and product positioning focusing on long-tail assets also mean that there will be more non-mainstream assets available for short-sellers on Beta Finance in the future. These non-mainstream assets often have more extensive short-selling or hedging needs.

Business conditions

The current core business data of Beta Finance are as follows:

The rise of new lending forces: the new public chain VS Ethereum

We have seen that despite the short launch time of the product, the TVL of the project has risen rapidly. On the one hand, Alpha endorsed the project. On the other hand, the official also publicly stated that subsequent airdrops will be carried out for deposit/borrowing and short-selling users. Brought a lot of funds to the project. However, the utilization rate of Beta Finance funds is currently low.

Among all the listed assets, USDC ranks first in deposit volume and capital utilization rate, as shown in the figure below:

The rise of new lending forces: the new public chain VS Ethereum

We found that because Beta is in the first stage of its launch, 16 of the assets are all officially audited and rated certified assets (Verified Markets), and the only asset of Risky Markets is Feisty Doge NFT’s fragmented token NFD , NFD is an ERC-20 ownership token after the Feisty Doge NFT ( Dogecoin prototype NFT) is split on the NFT fragmentation protocol Fractional . It is a typical long-tail asset and it is also the main asset type that Beta Finance wants to support in the future. .

The rise of new lending forces: the new public chain VS Ethereum

NFD’s asset module

Product UI UX

Beta Finance’s product functional interface style is simple, the layout is reasonable, the interactive design also conforms to the user’s intuition, and it is easy to use. On each business function page, the data display is also quite detailed, which is reassuring.

The rise of new lending forces: the new public chain VS Ethereum

Beta Finance’s asset page

The rise of new lending forces: the new public chain VS Ethereum

Beta Finance’s loan page

Token model

At present, the project has not issued tokens, nor has any information related to the total amount of tokens and distribution methods found on the official website, nor has it described the usage and scenarios of tokens.

It is expected that the detailed token model will not be disclosed until the tokens start to be distributed.

risk control

Beta Finance will classify certified assets (Verified Markets), with the highest level being S level (three stable coins), followed by ETH and WBTC being AA level. Different levels of collateral correspond to different lending rates (LTV) and liquidation line parameters, but currently only ETH and three stable coins are supported as collateral.

The rise of new lending forces: the new public chain VS Ethereum

Beta Finance’s certified asset level and corresponding risk parameters, source: Beta Finance document

It is worth mentioning that Beta Finance also disclosed the classification logic and model of certified assets. The evaluation dimensions include smart contracts of assets, counterparties and transactions of assets, which are very detailed.

In terms of smart contracts, Beta Finance has obtained reports from Peckshield and OpenZeppelin, two audit institutions, and has launched a Bug bounty program in cooperation with Immunefi.

On the whole, Beta Finance’s security preparations are relatively complete.


Beta Finance has accurate product positioning and business scenarios, focusing on long-tail asset lending and short-selling services, which is a distinct difference from the existing large-scale lending platforms. Its product concept is concise, and the functional combination of long tail assets + one-click shorting also has a large market growth space. In addition, Beta Finance’s investor background is quite good. Although the project has not officially started the token distribution and has not announced the token model, it deserves long-term attention.

Basic lending platform


Project Status 

Product launch time: August 19, 2021

Benqi is the first native lending agreement on Avalanche, led by Ascensive Assets, with participation from Dragonfly Capital, Spartan Group, Ava Labs, GBV Capital and other institutions. Benqi’s current products are similar to most mainstream lending platforms, adopting a pooled lending model, and all product mechanisms are quite satisfactory, without much innovation.

Project Features

As mentioned above, Benqi itself does not have much innovation in mechanism. Its TVL soaring comes from first-mover advantage on the one hand, and from the 3 million US dollar liquidity mining jointly launched by Benqi and the Avax Foundation on the other hand. In addition to mining subsidies, Benqi itself will also distribute project tokens QI as a reward to the users of the agreement. The total monthly subsidy amount exceeds 10 million US dollars.

Business conditions

Benqi is the largest project in the avalanche protocol ecology. According to data from DeFi Llama, its TVL has accounted for 47% of the total TVL of the avalanche protocol.

Currently, Benqi’s core business data are as follows:

The rise of new lending forces: the new public chain VS Ethereum

We can find that Benqi’s high total funds and capital utilization rate are largely due to the higher token subsidies at the current stage.

Product UI / UX

Benqi’s product interface is relatively simple and quite satisfactory. Compared with Qubit and Beta Finance, it displays less data and still has room for improvement.

The rise of new lending forces: the new public chain VS Ethereum

Benqi’s asset market interface

Token model

Total and supply

Benqi’s total governance token QI is 7.2 billion, of which 45% is used for liquidity mining. The specific distribution ratio is as follows:

The rise of new lending forces: the new public chain VS Ethereum

The token distribution speed is as follows:

The rise of new lending forces: the new public chain VS Ethereum

Token value capture

The main purpose of QI is governance, which can make proposals and decisions on important project parameters, asset launches, and incentive distribution. Currently, there is no design for repurchase and destruction of tokens or dividends.

risk control

In terms of risk parameters, the borrowing rate of Benqi’s listed assets is consistent with the parameters of the liquidation line, which needs to be strengthened. In terms of the specific borrowing rate, the mortgage rate of all listed assets is below 60%, and the degree of risk is not high.

The rise of new lending forces: the new public chain VS Ethereum

The risk parameters of Benqi’s listed assets, source: Benqi document

It is worth mentioning that in July this year, Benqi reached a cooperation with Gauntlet before the product was officially launched, and invited it to participate in Benqi’s dynamic risk management, which specifically included mitigating bad debt risks, calibrating incentive mechanisms, and improving capital efficiency. Gaunlet is a well-known on-chain risk simulation platform, and currently has in-depth cooperation with Aave, Compound, MakerDAO, etc.

In terms of smart contracts, Benqi only got the contract audit report of a company in Halborn (obtained in May this year), which was slightly thin.


Generally speaking, Benqi is a fairly satisfactory lending project. Although there are not many unique business innovations, there are also no slots. Its explosive growth is mainly due to the rapid growth of the Avalanche Protocol ecology since August, and the Avalanche Protocol Foundation’s platform and strong support for the project. It is precisely because of this that Benqi, as the largest lending platform for the avalanche ecology, has the upper limit of subsequent development to be the overall ecological scale of the avalanche.

Back new loan agreement after

For the four emerging lending agreements that this article focuses on and analyzes, some of the business indicators have grown at an alarming rate, and some of the product mechanisms have many innovations. From them, we can interpret richer information.

The rise and competition of new public chains have brought unprecedented opportunities to emerging lending agreements

In the era when Ethereum was dominant, the latecomers in the lending field faced direct comparison and competition with Aave and Compound. Since the lending platform of the capital pool model is a typical two-sided market, its network effect is difficult to surpass once it is formed; in addition, , The leading lending agreement has been used in combination with a large number of Ethereum protocols and has become an important foundation for DeFi Lego. It is difficult for emerging lending agreements to replace its status. The brand and long history of operation have further broadened the moat of the leading lending platform.

However, with the rise of the new public chain, emerging lending projects have found their own virgin land. The giants on Ethereum either have not yet migrated here or have not yet established a foothold. New players have the opportunity to compete on an equal footing with the older generation.

The rapid development of DeFi provides real business scenarios for the funds and users of the public chain, which greatly improves the subsidy efficiency of the new public chain (compared to the Dapp developer subsidy in 18 years) and boosts its confidence in subsidies. Radical subsidies from the public chain layer have helped new projects share a large amount of marketing costs, allowing their cold start to be completed quickly.

For the new public chain, lending is the underlying liquidity source of the financial ecology. It is very important to nurture and support the lending projects native to the public chain. Therefore, we have seen Venus on BSC, Anchor on Terra, and Benqi on Avalanche. Rapidly rising, half of the top ten lending projects of TVL have come from outside of Ethereum.

New public chain projects are growing fast, but Ethereum is still the birthplace and testing ground for innovation

Among the four projects analyzed in this article, Qubit comes from BSC, Benqi comes from Avalanche, which belongs to the new public chain camp, and Euler and Beta Finance come from Ethereum.

The differences in the lending projects of the two camps are also very obvious: the business volume of the new public chain project has started quickly, but the original innovation is less; the business growth rate of the Ethereum project is not so violent, but whether it is in the differentiation of product positioning In terms of innovation, both models and solutions have their own opinions.

This is determined by the degree of commercial development of the new public chain and Ethereum.

The new public chain is an uncultivated virgin land, most of the users’ financial needs are in an unsatisfied state, the innovation requirements for the project are not so high, and it can be used. There are many projects on Ethereum, and those “low-hanging fruits” have already been picked. New projects must have insights into the unmet needs of users or solve the problems of existing products in order to have room for survival.

Fierce competition is the essential reason for the more intense wave of innovation in Ethereum.

However, with the gradual increase of new public chain projects, the development space for low-quality and low-innovation projects will gradually disappear. More “DeFi New Business” originating from Ethereum will be relocated to the new public chain, or even Encryption projects native to the new public chain will be born.

If you look at the emerging lending projects on Ethereum and the new public chain from the perspective of investment, they all have opportunities that are worth exploring, but there are differences in the evaluation criteria.

The development ceiling of the new public chain project is limited by the scale of the new public chain ecology. To decide whether to invest in the loan project of the new public chain, first of all is to predict the future development of the ecology where the project is located. Support is also very important.

As for the project on Ethereum, whether it has found the right market segment, whether its mechanism can solve the key problems of the older generation of products, the reputation of its team in the Ethereum community and the potential resources that can be mobilized, we need to investigate The key elements of this.

Perhaps with the ups and downs of the spheres of influence between the public chains, the above rules will be subverted and broken. Fully embracing and enjoying changes is a mental method that must be practiced in this industry.

The only certainty is: whether it is investment or entrepreneurship, the business game of the lending track is still just beginning, let us continue to look forward to it.


Industry data:

Project information:



Beta Finance:

Benqi: https://app.benqi.f

Articles and reports:

Understanding Beta Finance in Three Minutes: DeFi Derivatives Market Incubated by Alpha Finance Lab

Interpretation of Euler Loan Agreement: How to Realize Unlicensed Listing and Optimize Liquidation

Understand Terra Ecological Lending Protocol Mars Protocol in Three Minutes

Introducing Euler

*If there are obvious facts, understandings or data errors in the above content, please give me feedback, and I will revise the research report.


Research institution: Mint Ventures

Researcher: Xu Xiaopeng


Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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