The Rising DeFi of Polkadot Ecosystem
On March 16, 2021, CryptoGeek is very honored to invite three guests from Coinversation, Bifrost, and Manta to chat with everyone about the Rising DeFi of Polkadot Ecosystem. We specially integrated the content of this panel.
Share guest introduction:
1. Gieno Miao, Coinversation community developer has served as senior director of Microsoft, Alibaba, Amazon.
2. Victor Ji, co-founder of Manta Network.
3. Tyrone Pan, product manager of Bifrost, graduated with a master’s degree in economics from the University of Glasgow, UK. His master’s thesis conducted in-depth research on the new financial model of blockchain and participated in the public course of blockchain technology and application at Peking University.
The following is a sort of part of the content shared online:
1. The topic of our conversation tonight is the Rising DeFi of Polkadot Ecosystem. First, please talk about the Defi’s current situation in Polkadot combined with your projects and what the Defi track can bring to the Polkadot ecology?
Coinversation: We learned many successful stuff of Defi in the Ethereum ecosystem and then brought them to the Polkadot ecosystem. We do it from collateralizing assets to issuing stable coins and then entering the liquidity pool as a liquidity provider. In this link, we may do more liquidity pools and then make synthetic assets. We hope to realize a complete chain, and in each relatively independent link, we can access and cooperate with other friends’ projects or other assets.
Defi can bring the application to the Polkadot ecosystem because everyone still depends on whether you have a real application scenario. If this scenario can be implemented and lasted for a while, the chain’s value will be more stable. At present, Polkadot is a place where the second largest Defi ecosystem outside of the ether is likely to develop.
Bifrost: Bifrost is developed based on substrate, Bifrost provides staking liquidity for the POS consensus mechanism’s project in Polkadot Ecosystem, meaning that all staking locks of users can be liquid. The liquidity comes from our products.
Defi is not just a track. It is more like a stadium as a foundation for the development of various ecology. In the future, after the opening of Ethereum 2.0 or Polkadot, the lock-up value in the POS network will explode. We also saw this opportunity and decided to do sticking liquidity, which will appear in a new financial derivative.
It is like a prefabricated building. The parts are assembled first, and then the structure is built all at once on the day. So Polkadot assembles the Defi infrastructure before its ecological opening and then waits for the parachain to open all the foundations immediately.
2. Compared with the development trajectory of Ethereum Defi, how do you think Defi in the Polkadot ecology will develop? How long will it be until Polkadot Defi is ecologically mature?
Coinversation: The first point is that the most significant advantage that a new ecology or public chain can enjoy is that all infrastructure providers and service providers do not need to restart development. These basic tool-based projects will be better supported. The new platform is easier to make and has more complete components. It may not be possible to achieve in the Ethernet Defi ecosystem due to funding, resources, competition, traffic ownership, etc. These may be done in the Polkadot ecosystem. Those more technical, innovative, or more academic projects will have a longer development cycle on the ether. On the contrary, the projects will have more opportunities in Polkadot.
The second point is that we have to think about this issue comprehensively. There are some problems with the popular NFT now. The token you speculate is NFT, but the NFT asset storage may exist on a centralized server. That thing is not a real NFT, so NFT assets currently do not have an excellent solution to its liquidity problem. Is there possible to develop one or two projects in a relatively narrow environment and quickly verify and make some patterns. Now they are seamless. Your expansion and the scale-up of the entire ecology are high-speed. So there is a chance to make it.
Now, look at the entire Defi project of the Polkadot ecology. Once the parachain slot comes out, it is likely to quickly form a small closed-loop and a relatively complete closed-loop ecology within one or two months, and enough assets will be retained in it. Let the business operate by itself. Polkadot’s most significant advantage is Polkadot is relatively without so many resources and background constraints, and then a relatively purely technical community. This is why we can produce projects like Coinversation.
Bifrost: MakerDAO, Compound, and Synthetix in Ethereum are very representative. Their order is stablecoin, lending, and derivatives, which is in sync with the traditional financial market’s development order. Suppose these infrastructure services are deployed on Polkadot after the parachain starts. In that case, it will operate in a month or two to form a small closed-loop, but this is just a foundation and does not represent the maturity of a Defi ecosystem. Maybe now, the development of Defi is less than 1%, but for Polkadot, without considering this technical problem, and then after Polkadot accesses the parachain, it can immediately realize the business logic of this basic asset level of Defi. For example, our Bifrost has recently connected the cross-chain module to realize the cross-chain asset conversion between flat chains.
In addition to Bifrost, there are also Defi infrastructure classes such as Acala and Equilibrium, considered Polkadot. A DEX model is embedded, and a particularly smooth user experience can be achieved on Polkadot. It is combined according to different models, not the splicing of a smart contract. Regarding the specific gameplay, the current development may only be Defi, the 1% development progress in the decentralized financial world. There may be many such gameplays waiting for users to discover in the future.
Manta: At least Polkadot has a parachain before there will be various ecological developments. With the progress of the parachain and breakthroughs in performance, everyone will take advantage of Polkadot to have more development. Polkadot has a faster consensus and then a shorter run time. In terms of performance, it is more suitable to develop ZK things, so we chose Polkadot. I believe that more other projects will feel that Polkadot’s underlying design will be unique than Ethereum or other public chains.
Besides, during the development process, we feel that Polkadot’s library is well written, and it is a complete library. It has many of these documents that are very helpful for developers to do development. I think this is currently more of a performance and Ethereum gas fee issue than Ethereum, and there can be some room for such a solution. Another point, compared to other public chains, from the seriousness of Polkadot’s work, he hopes to do this thing well.
Coinversation Protocol is a synthetic asset issuance protocol and decentralised contract trading exchange based on the Polkadot contract chain.
Bifrost is a Polkadot Ecosystem DeFi infrastructure protocol that aims to become an infrastructure for providing Staking liquidity, and currently offers a derivative vToken for Staking and Polkadot Lease Offering (PLO). It is also a member of the Substrate Builders Program and Web3 Bootcamp. vToken can optimise transactions in multiple scenarios such as DeFi, DApp, DEX and CEX.
Manta Network is building the privacy preservation protocol for the entire DeFi stack. It takes an algorithmic approach to privacy using zk-SNARK, and offers plug-and-play access to privatize tokens for transfer and trading. Using a bring-your-own-token (BYOT) model, users can transact with a selection of various tokens and major crypto assets.