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Southeast Asia DeFi Week 2-Day 4

Event on September 02, 2020 by Malvinder Singh Gill

 

SYNTHETIX

 

 

Synthetix is a token reading platform built on Ethereum. It allows the creation of real world assets, like stocks and shares to be bought and traded using crypto. Synthetix started out as a stable coin, before pivoting to DeFi. Synthetix allows users to bet on crypto assets, stock, currencies, precious metals, and other assets in the form of ERC20 tokens. Synthetix assets or “Synths” copy the price of an asset in the “real world” and bring it onto the Ethereum blockchain giving that Synth all the properties of an ERC20 token. Synthetix started as stablecoin project Havven and was founded by Kain Warwick, the current CEO. Synthetix is now one of the biggest projects in DeFi with over $180 million worth of SNX tokens locked up in the protocol in December 2019. Synthetix uses a multi-token infrastructure based on a system of collateral, staking, inflation, and fees. The system uses two types of tokens-the main  Synthetix Network Token (SNX) and synthetic assets or Synths. One of the core requirements of the Synthetix system is the ability to get accurate information from the “outside world” such as the price of the Japanese Yen and eventually the price of stocks like Tesla. To get this price information, Synthetix was previously using centralized price feeds or oracles, which were vulnerable to manipulation and exploitation. Now they have partnered with ChainLink and their decentralized oracle system to reliably bring information to the blockchain without needing to trust a central party-very DeFi. Much of Synthetix’ recent success can be attributed to its innovative token incentive model. SNX holders stake SNX in return for fees from the Synthetix exchange and reward from the system’s inflationary monetary policy. To create a new Synth, more than 750% of the value of the Synth must be staked as SNX. Back when Synthetix was Havven, it launched an ICO and raised $30 million with a total supply of 100 million Havven tokens. In February 2019, Synthetix changed its monetary policy and there are now over 164 million SNX tokens, which will increase to 250 million over the next 5 years. If you have an Ethereum wallet and some crypto already, you can trade SNX tokens on decentralized exchanges like Kyber and Uniswap. The Synthetix platform was primarily created for users to trade Synths. Holders of Synths can go long on an asset-bet the price will increase. By staking SNX, holders can create new Synths, collect rewards, and watch their holdings grow. The big feature most have been waiting for is the ability to trade stock like Tesla and Apple on top of Ethereum-an absolute game changer for DeFi believers everywhere. 

 

 

Curve.fi

 

The easiest way to understand Curve is to see it as an exchange. Its main goal is to let users and other decentralised protocols exchange stablecoins ( DAI to USDC for example) through it with low fees and low slippage. Unlike exchanges out there that match a buyer and a seller, the behaviour of Curve is different, it uses liquidity pools like Uniswap. To achieve this, Curve needs liquidity (tokens) which is rewarded by those who provide it. Stable coins have become an inherent part of cryptocurrency for a long time but they now come in many different flavours (DAI, TUSD, sUSD, bUSD, USDC and so on) which means there is a much bigger need for crypto users to move from a stable coin to another. As a result, Curve.fi has become the best place to exchange stable coins because of its low fees and low slippage.Every time someone makes a trade on Curve.fi, liquidity providers (people who have deposited funds onto Curve) get a small fee split evenly between all providers, this is why you will see high APRs on days with high volume and high volatility.It’s important to note that because fees are dependant on volume, daily APRs can often be quite low just like they can be very high. When you go to the deposit page and deposit one stable coin, it then gets split between each token in the pool.That’s something you have to keep in mind because if you were to deposit 1000 DAI in the yPool, a per the screenshot below, you would then get 46.1 DAI, 314.5 USDC, 490.2 USDT and 149.2 TUSD. Those values change constantly as people trade and arb the price of stable coins. Interests for pools using lending protocols compound every block or 15 seconds or immediately after fees are paid. It’s also compounded automatically. When you withdraw, the same principle applies (but reversed). If you withdraw the stable coin with the biggest share, you would get a bonus but you still choose what stable coin you want to withdraw.Interests for pools using lending protocols compound every block for 15 seconds or immediately after fees are paid. It’s also compounded automatically.With Bitcoin growing exponentially on Ethereum under different variants, Curve.fi has added two new liquidity pools to help those tokenized Bitcoin keep their peg.The SNX distributed is based on the number of people staking their LP tokens on Mintr which means your share of rewards gets lower if more people start staking. The price of SNX (price of SNX going up would make the yearly bonus go up).The size of weekly rewards (48,000 SNX as of today) could also be lowered as Synthetix reevaluates their partnership with Curve. Security audits don’t eliminate risks completely so it’s still possible a vulnerability be found in Curve smart contracts. High returns never come without risks.Curve uses smart contracts from lending protocols on top of its own which means risk is stacked (for y and c pools only). It’s important to choose a pool that matches your risk tolerance.

 

Do check out the full video of Day 4 Part 1 here: https://www.facebook.com/Asiablockchaincentre/videos/1176882596003995/ 

 

 

 

 

BALANCER

 

Balancer is a dimensional automated market-maker built on Ethereum. It allows anyone to create or add liquidity to customizable pools and earn trading fees. Instead of the traditional constant product AMM model, Balancer’s formula is a generalization that allows any number of tokens in any weight or trading fees. Another way to view Balancer is as an inverse ETF: instead of paying fees to portfolio managers to rebalance your portfolio, you collect fees from traders, who continuously rebalance your portfolio by following arbitrage opportunities. Balancer protocol is designed to be composable and has a few types of pools: 1) Private Pool where the only owner can contribute liquidity and has full permissions over the pool, being able to update any of its parameters. 2)  Shared Pools where the pool’s tokens, weight, and fees are permanently set and the pool creator has no special privileges. Anyone may add liquidity to shared pools and ownership of the pool’sPools which are a variation of a private pool where the controller is a smart contract, liquidity is tracked with a specific token called BPT - Balancer Pool Token. 3) Smart  allowing for any arbitrary logic/restrictions on how pool parameters can be changed. Smart pools may also accept liquidity from anyone and issue BPT to track ownership. Balancer recently introduced its native governance tokens called BAL which are distributed to liquidity providers through a process called liquidity mining. Balancer makes every effort to be as trustless as possible. There are no admin controls, upgradeability, or shutdowns built into the smart contract. The fee is customizable per pool and goes entirely to the pool liquidity providers. Balancer is a very new protocol. Although we are taking every precaution and doing extensive audits, this is still very much a beta product. Use small amounts of funds to start.     

 

Do check out the full video of Day 4 Part 2 here: https://www.facebook.com/Asiablockchaincentre/videos/620664631976930/ 

 

 

 

 

 

 

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About the Author:

Malvinder Singh Gill is a Digital Marketer for Blocklime, a writer by day and a reader by night. He is loathe to discuss himself in the third person but can be persuaded to do so from time to time.

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