What is the real DeFi2.0: professional product design to achieve universal benefits
DeFi ( Decentralized Finance ), as a brand-new financial model compared to the existing financial system, has set off a global storm due to its innovation and inclusiveness. After several years of development, currently available on the market DeFi project because basically mature technology and business, the business volume has reached a certain size, has withstood the test of the market, attract a lot of investment favored. According to the latest data from debank, the total lock-up volume of DeFi has reached US$158.9 billion, an increase of 1621% year-on-year. The 24-hour transaction volume of the head project Uniswap is close to US$1 billion and the number of users reached 2.79 million. It can be seen that DeFi, as a brand-new financial model, has completed its early exploration and has successfully entered the 1.0 stage. But at the same time, the DeFi 1.0 model also has some shortcomings, so exploring a more mature DeFi 2.0 has become the most important task of the industry.
There are many projects known as DeFi 2.0 in the existing financial market, but most of them are limited to micro-innovation at the level of liquidity and incentive mechanism. They only upgrade some of the functions of 1.0 to improve asset utilization efficiency. It can only be called DeFi 1.1 and cannot take on the heavy responsibility of 2.0. DeFi 2.0 should be a historic revolution. It can solve the major shortcomings of existing projects, completely improve the status quo of DeFi, and set off a huge wave in the field of financial investment.
First of all, the current DeFi has not exerted its maximum market potential. Compared to the universal banks, financial products and other traditional financial services, DeFi more like a programmer and professional investors in the game , the retail market and the general public are often limited by the lack of expertise, not to invest, worry I was cut leek myself. This has led to the high barriers to entry in the current DeFi market, and the goal of inclusive finance cannot be achieved. We expect DeFi 2.0 to completely solve this problem. It aims to gradually realize customers’ understanding of projects through process-oriented guidance, create a common community full of humanity, and strengthen the relationship between customers and platforms while standardizing the entire application system. Contact, so that the general public can understand DeFi and dare to invest.
Secondly, many people in the industry compare DeFi to “Lego blocks” and talk about it. However, this method of building blocks has serious shortcomings of risk transmission. The openness of the blockchain makes DeFi projects vulnerable to hacker attacks, thereby burying hidden dangers of fund security from the source of the project . In the future, DeFi 2.0 projects should avoid using this building block method, but provide a complete financial solution through top-level design, comprehensively consider the risk relationship of each sub-project within the platform, and use risk hedging methods to expand business while strengthening risks The ability to decentralize and isolate, such as providing risk control measures such as deposit insurance, over-collateralization, and option stop loss, to completely reduce system risks and maximize the value of customer assets.
At the same time, observing the existing market DeFi projects, we can find that they are more similar to small and exquisite financial toys than a complete financial system. They are often designed and developed by programmers, which are the result of “engineer culture”. Inability to understand the nature and characteristics of professional financial products. Future DeFi 2.0 projects need to reshape this model. Professional financial product experts and engineers will combine the various internal parts of the ecology into a whole, and strengthen the sustainability of DeFi based on traditional liquidity. DeFi 2.0 will use a professional team to combine past independent financial derivatives to help users quickly synthesize new financial assets, achieve interconnection between different financial markets, and create a new asset industry chain.
Fourth, we expect that another major advantage of DeFi 2.0 is that it can maximize asset efficiency. Due to the nature of decentralization, users often need to provide over-collateralized assets, which causes the shortcomings of inefficient use of assets in most 1.0 projects. Version 2.0 will generally adopt innovative equal mortgage and non-full mortgage models, fully learn and imitate the practices of the traditional financial system, and greatly improve capital efficiency.
Finally, we must realize that DeFi 2.0 must continue to maintain and strengthen the “decentralized” feature. The founding team of the project only provides a platform for user transactions. From the beginning, there should be no idea of controlling the platform and currency prices. The experience and lessons of the past few years have proved that ICO is a wrong incentive mechanism. DeFi 2.0 should adopt a better token issuance mechanism to greatly reduce the control ability of the founding team, but to allow users to have a high degree of autonomy and sufficient Use DAO’s governance mechanism to ensure the orderly evolution of the project.
It can be seen that the transformation of DeFi2.0 ecology will be a major transformational innovation in the currency circle, which will provide better liquidity for financial development, increase the temperature of financial services, and can truly achieve safe and efficient inclusive finance for the whole people develop. It is believed that projects that truly understand the DeFi2.0 model will be able to take the lead in the future market and grasp the new wave of development in the currency circle.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/what-is-the-real-defi2-0-professional-product-design-to-achieve-universal-benefits/
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