Forum 3-Ethereum 2.0 mortgage is around the corner. Will a technical bull market ignite again？
In June 2013, CHBTC (the predecessor of ZB) was established. In the following 7 years of safe and stable development, ZB has grown into the world’s top trading platform with more than 10 million registered users. Create a real and safe trading environment for users from more than 189 countries, bringing a more professional and efficient trading experience.
The following are the highlights of the Q & A session:
Host Journey (ZB.com Business Manager): In May of this year, Ethereum 2.0 developers stated in Ethereum Ethereal Virtual Summit that the staking service of Ethereum 2.0 will be launched as early as July this year. As the largest technological transformation in history and the silence of the market after the third halving, Ethereum 2.0 is highly anticipated by the industry.
Host asked DaiDai (DeFi Labs Founder): Defi is also one of the hot spots this year, and people’s demand for Defi seems to be higher and higher. So what do you think of Defi’s development this year?
A: Defi is the only one of the various hot spots in the crypto space that has landed in recent years. Defi’s adoption developed with the rapid rise of stablecoin coinage and issuance. This year’s outing is due to the excellent performance of many Defi token in the secondary market, with the comp enthusiasm of the market, which is ignited by the mining of comp loans and the price of the currency itself.
Defi is not just a hot spot, there are real needs behind it. Afterwards, there will be more innovation in the field of Defi, and the current projects will also receive more market and capital attention, with long-term development. However, this year is likely to face a wave of small bubbles in the secondary market. After the fomo period, Defi will continue to develop for a long time.
Host asked Kevin Ren (Consensus Lab Partner): In your opinion, besides Ethereum 2.0 and Defi, what technology is worth looking forward to this year?
A: First of all, as mentioned before, DeFi is indeed a hot spot this year. At present, the total market value of the DeFi market lock position has reached $1.7 billion. The DeFi market development space includes two blocks: one is the blockchain’s native finance, such as various levels of financial products generated around digital assets, including lending, wealth management, insurance, and derivatives. But Defi’s problems are few applications (primarily borrowing), difficult operations (such as MakerDao), and limited performance (such as Dex), which are still far from the “DeFi” or “Open Finance” that everyone expects. Consensus Lab has been actively deploying DeFi since last year, investing in projects such as the Force Protocol and Revx, and this year it has also deployed the Silicon Valley project definer.
The development of the Defi project is also subject to the performance and security of the underlying public chain. The solution to the technical constraints of the entire DeFi industry requires the improvement and stability of the underlying public chain of Layer1, the innovation of the application layer protocol of Layer2, and the layer-3 protocol of Layer3. Focus on channels and user experience.
The first item, the public chain technology that can provide higher performance and security for decentralized finance, is not limited to the upgrade of Ethereum 2.0. For example, the recent avalanche agreement we participated in is a typical example. He is a highly extensible open source platform for launching Defi applications, which can fully exploit the potential of Defi. Of course, the second type of technology that deserves attention is the expansion of projects under a public chain with a complete and open ecosystem. Such projects rely on a relatively mature and consensus public chain ecology and are relatively easy to grow. For example, Acala and edgeware under Polkadot ecology; and kava under Cosmos ecology, etc. Consensus Lab’s recent participation in the cosmos ecoacash is also based on this logic.
Host asked Qu Ming (Quest Capital Founder): As a capital institution, do you have a favorite investment target this year?
A: There are several things in the blockchain circle this year that are very hot. Defi, ETH2.0, filecoin, decentralized storage, and Poka. There are also good stories behind these very hot projects to support the continued market heat. In general, I am more optimistic about Defi’s decentralized finance story. I think the blockchain can better solve the financial problems that traditional finance cannot solve. DeFi is a subset of open finance, but the most important one. The first person to think of using blockchain to reconstruct finance, his ideal for the future of digital finance must be like DeFi.
DeFi has been combined with token incentives. Let’s see how to combine DeFi and token incentives with real business. Of course, at this stage, it may be mainly the combination of the Internet and blockchain projects, which is currently the biggest and final gateway facing DeFi. If this level is not cleared, DeFi is destined to become a street mouse after the bubble collapses. As a capital institution, DeFi will be our next investment focus.
Host asked WeiZheng (8 Decimal Capital Partner): Do you think it is possible to usher in a technical bull market this year?
A: I have entered the market since 2017. I have also invested in more than 60 projects in the middle. At most, I held more than one hundred types of digital currency. I also witnessed the development of digital currency in recent years. Regarding the bull market, I think this question is relative. Judging from the market value of the overall digital currency, the space is still quite large compared with the bull market at the end of 2017 and the beginning of 2018. Judging from the popularity of global digital currencies and the number of holders, the growth is still very large, the market is gradually maturing, especially this year’s growth is very impressive. In general, we are in a market environment that is gradually growing and growing rapidly. I still look forward to a big bull market, but it may not be this year. Digital currencies are also affected by the global economy.
Host asked Yang Linyuan (DFUND Management Partner): Do you think it is possible to usher in a technical bull market this year?
A: The currency price depends on funds and sentiment, not technology. There is no inevitable connection between the bull market and technology. The biggest problem of digital currency is that the threshold for recognition and use is too high. The arrival of the real bull market is related to the entry of a large number of new users and funds. Defi is a good concept that meets the needs of some arbitrage users. The needs of users are not necessary for most ordinary users, and they are not enough to support the arrival of the overall bull. Inflation and local disputes may be the reason for a large amount of capital. Super stablecoins such as DCEP and Libra may bring a large number of new users. It is unrealistic to bring a bull market by technology iteration alone. Don’t have too high expectations for technological innovation and changes to bring a bull market. Viewing digital currency and blockchain as a technology is one-sided. Digital currency is the most important part of the historical process of human digital migration.
Media interview questions：
Bitwires asked DaiDai (DeFi Labs Founder): For the comp in the DeFi field, market response has been very popular recently. Will its governance model mortgage or mining form a fomo of 18 years of fcoin, and then quickly fall?
A：This question I asked Robert, the founder of Compound, whose original answer was: COMP was born only a few days, and the Compound protocol can work normally without any token distribution. You can think of Compound as a product that can be established by using a price of 0 COMP tokens, It’s not a problem for me that the currency price is falling.
Erduo Finance asked Kevin Ren (Consensus Lab Partner)：Ethereum 2.0 mortgage market, from an investment perspective, is there any risk, and what are the specific performance?
A：Ethereum 2.0 mortgage refers to holding a certain amount of Ethereum to participate in the network and get a return. The mortgage of Ethereum 2.0 is very simple, the minimum threshold is 32 ETH, and the verifier needs to run the verification node. Mortgage ETH return is expected to be 4%-10% in the long run, and may reach 25% or even higher in the short term. There are many investment opportunities in the Ethereum 2.0 mortgage market, such as ETH lending in Defi to increase liquidity. The change in the consensus level will also have a profound impact on all parties. Especially miners and node service providers. Then, the risks associated with investment are mainly reflected in passive income and vulnerability to changes in market risks.
1. Although the users participating in the mortgaged Ether can obtain a certain stable income, but after redemption, before the completion of all stages of the Ethereum 2.0 upgrade, these mortgaged Eth will temporarily be unable to participate in transactions and transfers, which will take 2 to 3 years.
2. Users can lock the cryptocurrency they hold within a specified time through mortgage. This means that if market conditions change drastically, users will not be able to quickly sell their cryptocurrency from the mortgage program to sell to mitigate losses.
3. In a market downturn, the value of the reward may not be able to compensate for the reduced value of the cryptocurrency.
4. Finally, there is a potential risk that when the eth2.0 consensus mechanism is changed, if sec re-evaluates and judges that ETH is a securities digital currency, it will have a significant impact on the entire market.
BlockBeats asked Kevin Ren (Consensus Lab Partner)：Since May, the Ethereum Gas fee has risen a lot. Vitalik Buterin once said that Ethereum before the end of the year may be very blocked. Is there any better solution for the Ethereum DApp?
A：Scalability has always been an important issue that has plagued the development of Ethereum. Since Ethereum’s TPS is around 15–35, it is very prone to congestion. At present, the utilization rate of Ethereum is about 70%. With the development of the Ethereum ecosystem, more and more DApps are deployed on Ethereum. To fundamentally solve the scalability problem, Ethereum needs to complete the conversion from POW to POS as soon as possible, so as to complete the order of magnitude from tens of TPS to thousands of TPS. At the same time, some reports mentioned raising the upper limit of Ethereum gas, which means increasing the overall capacity of Ethereum, and reducing costs in this way (currently the cost is $0.4-$0.6). This can make Ethereum slightly improve the processing power (20–30%), rather than an order of magnitude change. But this will inevitably bring many disadvantages. From my personal point of view, I tend to actively develop Layer 2 solutions, such as extension tools such as zkSync, which greatly improves TPS to a thousand levels, and the gas fee can be reduced to $0.001. It is recommended that DApps based on Ethereum, including various Defi products, should also consider adopting similar solutions.
ChainDD asked Qu Ming (Quest Capital Founder): As of the evening of June 21st, according to DeFipulse data, the DeFi ecological lock value exceeded US$1.48 billion. Many DeFi agreements have implemented incentives. DeFi revenues have shown explosive growth. Some users have annualized revenues of more than 100%. For example, Compound’s liquidity mining. So, how do you view the development direction of the DeFi platform in terms of incentives, does all DeFi platforms issue their own virtual currency as incentives, and does this bring new risks?
A: The trading platform in the entire large category is sure to be able to cross the bull and bear, because there are certain income and profit, business growth, business models, real users and clear usage scenarios. However, within the entire large category of the trading platform, the business of the three major exchanges Huobi, Binance, and OKex has entered homogenization and there is no difference in competition. Now all of them do mining pools and contracts, and small exchanges also make contracts. For exchanges, the key to crossing the bull and bear is the ability to innovate in the product, and there are reasons for everyone to remember you and choose you.
This actually makes people see that defi is more open than cefi, which means more people are willing to participate and there is more competition, and competition means prosperity. But at the same time, we can also see the risks. But at the same time, we can also see the risks. The high returns brought by the COMP soared caused a chain effect on the Compound platform. Compound currently supports lending services for 8 tokens such as BAT, DAI, ETH, Augur, USD Coin, Tether, WBTC, and Ox. Like the current bat on comp, the utilization rate has reached as high as 85%, that is, 160 million bats are stored in the platform, of which 85% have been lent, which also makes the current deposit interest rate as high as 23.75%, and the borrowing interest rate has soared to 31.87%.
This illustrates a problem: too much arbitrage is currently in the defi field, and even arbitrage that still has a lot of potential systemic risks. There is no financial development at all. The data growth here is likely to bring more moisture in the short-term valuation. Finance must depend on and support the real economy. If DeFi can not provide financing support for high-quality commercial projects, it can be a disguised gaming industry. Investors should pay attention to these risks when they see opportunities.
Shilian Finance asked WeiZheng (8 Decimal Capital Partner)：Is it possible for Ethereum to be replaced by other coins?
A：Since 2017, I have been focusing on infrastructure and technology projects. I have invested in many competitive public chains, such as Provide the treasure, Ontology, zilliqa, and Fantom from South Korea. Also participated in the early crowdfunding of Eos, which are all global top100 projects. Overall, Ethereum is currently the largest public chain, with the largest number of Dapps. I think the direction of the emerging public chain should focus on exploring better technical solutions and landing. At present, there is still a lot of room for development in blockchain. Every team working on the landing of blockchain technology and technological innovation, I think it is worthy of respect. The prosperity of blockchain is about to open a new chapter, especially the development of China’s blockchain industry is very worthy of attention. Who can do a good job of combining blockchain with industry, commerce, and people’s livelihood, it is possible to exceed Ethereum, but it will never replace Ethereum, Ethereum will always exist, and blockchain is not yet in the stage of competition.
Lianbo Finance asked Yang Linyuan (DFUND Management Partner): From the perspective of investment institutions, what are the secrets of trading platforms crossing bulls and bears market?
A：This large category of trading platforms can certainly pass through bulls and bears, because there is a certain income and profit. The real users of the business model and clear usage scenarios, but within the large category of trading platforms, they have now entered the knockout. The three major HBO institutes have launched indistinguishable competition. They are all making contracts. Public chains, mining pools, OTC, and small exchanges are also swarming for contracts. Because the money comes quickly. Therefore, what the rest of the small and medium-sized exchanges have to pass through the bulls and bears must have unique capabilities in products and businesses, so that users can have reasons to choose and remember, and it is necessary to exist.