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Evaluate Li Xiaolai's views and gain a deep understanding of DeFi



First of all, I would like to state that Mr. Li Xiaolai's microblog content-ethexc today has very unique insights and cognitive biases. No matter from which aspect, if we can understand the entire content-ethexc of this Weibo and put forward different views, it will greatly enhance our insight into DeFid.

Analyze the content-ethexc of Mr. Li (hereinafter Mr. Li Xiaolai referred to as Mr. Li) is divided into two parts and levels.

Using DeFi as an analogy to The DAO event

DeFi is still issuing coins in essence, no progress compared with ICO, and even more risky

Li Xiaolai today's Weibo

1. Using DeFi to compare The DAO event

"DAO is the abbreviation of Decentralized Autonomous Organization (Distributed Autonomous Organization), The DAO is the world's largest crowdfunding project based on the Ethereum blockchain platform so far. Its purpose is to allow participants who hold The DAO tokens The invested projects are jointly decided by voting, and the entire community is fully autonomous and realized through smart contracts written in code. The crowdfunding was completed on May 28, 2016, and a total of 11.5 million ethers were raised, with a value of 149 million at that time Dollar.

The China Securities Association's evaluation system based on blockchain technology is online: Jinse Finance reported that the Securities Association of China has officially launched a blockchain-based investment banking business quality evaluation system for securities companies, and has invited all securities companies to cooperate with the association to carry out data collection work , a total of 20 evaluation indicators, and securities firms need to submit relevant information through the association's "Securities Industry Alliance Chain". It is reported that the association’s data collection time is from 8:00 on August 12 to 17:00 on August 25. All brokerages must follow the association’s unified requirements and technical standards to access the association’s “Securities Link” through self-sustained nodes or public nodes. ". The Association releases the evaluation index template through the "Securities Link". After each securities firm obtains the template from the "Securities Link", it needs to combine the "Investment Banking Project Information Routine Submission Data Submission Specification" and the "Investment Banking Business Quality Evaluation Special Submission Data Submission" "Standards" to carry out information submission work. The China Securities Association relies on the "Securities Link" to build an investment banking business quality evaluation system, and in accordance with the principles of implementability, traceability, and verifiability, it comprehensively collects information on all aspects of the securities company's sponsorship and underwriting business and regularly summarizes and evaluates it. (China Securities News) [2022/8/28 12:53:46]

In the incident of The DAO, the hacker exploited the loophole of the split function in the DAO smart contract, and transferred the Ethereum to the Child DAO smart contract multiple times before The DAO Token was destroyed, thereby stealing the tokens in the original The DAO smart contract on a large scale. ether. "

News | Luzhou Bank and multiple institutions jointly build a blockchain-based education evaluation system: Luzhou Bank, Beijing Big Data Research Institute, and Tongfudun jointly built an intelligent education evaluation system based on blockchain technology, which is expected to be launched in 2020 The enrollment season is applied at Peking University. The application of this system can use the technical advantages of blockchain that cannot be tampered with to break through the current data islands, allowing students and educational institutions to share data, so as to "teach each student in accordance with their aptitude" . ( [2020/1/20]

The above is a simplified introduction to The DAO (search "The DAO event" on the Internet for a lot of information, you can learn about it). What happened in 2016 led to a direct split in the ETH community, with a hard fork of ETH and ETC.

Simplified understanding of The DAO is crowdfunding (eth) and then everyone votes for community governance and decides what projects to invest in. A more popular understanding is an open and transparent private equity fund, but this private equity fund faces the public and has the form of a public equity fund. It is a great innovation.

In the above paragraph, the reason why private equity and public equity are mentioned is that the two require different qualifications and licenses in traditional finance and the real world. There are many institutions that can do private equity, but few can do public equity. The DAO bypassed regulation, but not the hacker's shotgun. Strictly speaking, the hackers did not break the rules, and exploited code loopholes to frantically plunder the wool. This is also caused by the immutable characteristics of the blockchain. The fork goes against the spirit of the blockchain. However, most people in the community support the Vitalik fork, so fork.

News | DAPP.COM evaluates that the top five dapp applications are all TRON systems: According to the DAPP professional ranking website DAPP.COM statistics, the current comprehensive score reaches 95, and the top five applications are DLive, WINk, BETFURY, Poloni DEX, Newdex ,WINk, BETFURY, and Poloni DEX ranked 2-4 are all applications developed on TRON, and DLive, ranked No. 1, has announced to join the BitTorrent ecosystem on December 31, 2019 and will contribute In terms of public chain migration, Newdex, which ranks fifth, also began to develop and deploy DAPPs on TRON in 2019. [2020/1/2]

The current development of DeFi is mainly focused on two aspects: decentralized lending and decentralized exchanges. Asset management, derivatives, insurance and other fields are also developing, but the current mainstream is still these two. I think Mr. Li’s The DAO should refer to the asset management aspect of the DeFi category, which is still a non-mainstream of DeFi. The DAO analogy is not very appropriate.

2. DeFi is still issuing coins in essence, and there is no progress compared with ICO

News | The Ministry of Science, Technology and Communications recruits the "Blockchain Citizen Evaluation Team": The Ministry of Science, Technology, Information and Communication of South Korea announced that it will start recruiting the "Blockchain Citizen Evaluation Team" on July 12. The purpose is to allow citizens to directly evaluate blockchain projects. A series of conditions such as gender, age, occupation, education, and residential address will be considered when recruiting the "Blockchain Citizen Evaluation Team". [2018/7/11]

This sentence should be Mr. Li talking about the DEX field (decentralized exchange) in DeFi. It is not possible to directly say that DeFi is the issuance of coins in general. However, if Mr. Li Xiaolai saw the recent popularity of DEX (such as Uniswap, Curve, balancer, etc. DEX), he directly used DeFi to refer to DEX, so it is also possible to understand.

One of the main functions of these popular DEXs is to issue coins-is this understanding correct?

no problem. Mr. Li Xiaolai's opinion, this point can be regarded as hitting the nail on the head, yes, it is to issue coins.

1. No listing fee is required (it can be done in less than a few thousand yuan, and you can issue your own ERC20 token on Uniswap with no more than 100 mouse clicks).

2. There is no need for centralized exchange audits. In fact, centralized exchange audits sometimes have many unnecessary restrictions. These restrictions are not entirely based on their own short-term interest demands (that is, they can make money immediately), and some restrictions are for cooperation. Regulators, these regulations have caused many Tokens to be released on exchanges, and they want to package themselves as functional tokens rather than security tokens. The design of the token model is relatively complicated, and it is unnecessarily complicated for the economic model itself. Just for compliance. If issuing a token directly is no different from securities, the CSRC will intervene strongly, and a project will be wiped out in an instant. However, many people are unaware of these subtleties in the design of these token models.

Xiao Lei commented on the Changpeng Zhao Twitter incident on May 7: Changpeng Zhao underestimated the influence of Sequoia Capital: Today, Xiao Lei, a financial columnist, posted an article on his personal official account, targeting "On May 7, Changpeng Zhao said on Twitter, All projects that apply to be listed on Binance may soon be required to disclose whether they have a direct relationship with Sequoia." Xiao Lei said that on the one hand, the project is innocent, and on the other hand, Changpeng Zhao also underestimated Sequoia Capital. influence.

He pointed out that Sequoia Capital invested in Huobi, the world’s top three digital currency exchange at that time, in 2014. It can be seen from the recent dinner organized by Xu Xiaoping and the statistical survey of previous professional organizations that Sequoia and Zhenge are good friends. He also said that if Huobi and OK cooperate, it may be a lot of pressure for Binance. Without investing in Binance, for an institution like Sequoia that only pursues commercial profits, it is imperative to support new competitors that can compete with Binance. [2018/5/10]

3. There is no need for a white paper to issue coins on DeFi DEX, just issue them directly. Fast, efficient, and decentralized, this is what Mr. Li Xiaolai said, "I am not responsible for the coins sent out this time." Mr. Li's view is basically correct on this point. However, no matter who issued the currency and when it was issued, they must be responsible for the currency-it is only a matter of the size of this responsibility.

Whether it is the ICO era or the current era of DEX currency issuance, if it is just to issue a currency, it is impossible to increase the price of the currency without announcing it and making a market. Of course, from this point of view, the risk is greater and the bubble is even worse. "I guess it's more chaotic than last time." Mr. Li's point of view is correct. The admission fee for the scythe last time required millions of tens of millions of funds. , this time it can be reduced by two or three orders of magnitude. The threshold for scammers is lower, and there are more fake projects.

This is not quite accurate. There is progress.

Let’s talk about the Lending business first—although Mr. Li is not referring to Lending, let’s briefly review it.

1. Lending’s liquidity mining, ordinary people can participate in and obtain benefits. This is the victory of the token economic model, which greatly improves the liquidity and improves people’s enthusiasm for participation. The risk of this kind of thing is relatively small (the risk of the wool party is originally just small).

2. Lending is an extension of the "asset" attribute of digital currency. The so-called encrypted assets in the past are not qualified to be called assets. Assets in the real world can be mortgaged. Encrypted assets did not work before, but now they can, which is not a bad thing.

Going back to what Mr. Li said was no progress compared to ICO, he was referring to the way the DEX system issues coins. Great progress has been made.

1. Not a step backward. In the previous ICO, the quality of the project itself was all blown out, and the amount of market-making funds was also vague and unknowable. I don’t know when the butcher knife fell, and a fishing line harvested all investors. At that time, there was a white paper. Later, the white paper was very punk and very evil. For example, in the CXC project in 2019, the beginning of the white paper is the universe’s "entropy increase and entropy decrease". "For example, VDS's white paper only talks about five pages of its own logo-ethexc design. If readers want to perceive these literary works in the currency circle, they can go to the Internet to search. In essence, a project has nothing to do with the second law of thermodynamics, and has nothing to do with the excellent concept of logo-ethexc design, such as Dogecoin, which has survived for a long time, and its logo-ethexc is very common. It doesn't make sense for me to write a thousand words about such a logo-ethexc to say how good it is.

Dogecoin logo

Now the two links of white paper and listing (centralized exchange) are omitted. There is no regression, but the redundant part is deleted. Teams that want to reflect their vision will still talk about what they are going to do and give some proof. Of course, many of the previous digital currency teams were anonymous and decentralized. Anonymity does not mean fakes. Who is Satoshi Nakamoto? no one knows.

2. There is progress. It is easier for current projects to issue coins, but it is still very difficult to pull the market for simple and crude projects. It requires a fund pool. Curve, Uniswap, Bancor, etc. are exchange pool type DEXs, and the price cannot be raised without capital injection. , if I have to invest, the price that does not go up or down will not quickly cause me to lose money.

There is no essential difference between the liquidity in the early stage and the ICO model. It is necessary for the project party to inject liquidity and replenish the water in the exchange pool. Pay attention at this time!

All exchange records of DeFi projects, time, quantity, scale, frequency and other information are all uploaded to the chain, which can be grabbed from the chain. There are related websites for statistics. If you are really worried, you can use crawler software to crawl the data. This requires the investment of real capital. , and the previous ICO project, can you go to the backstage of the exchange to see how the project is marketed? Only exchanges and project parties themselves know.

DeFi projects can be empty and boring things, but even very fake things can have publicly available on-chain data, which is a huge improvement in this regard.


This article is based on the words of Mr. Li Xiaolai, leading to the classification of DeFi, decentralized lending and related content-ethexc in the field of decentralized exchanges. Pointing out that DeFi is not The DAO, decentralized exchanges can issue coins, but it is a great improvement over traditional ICOs. Of course, we also highly affirm Mr. Li Xiaolai's risk warning.


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