USDT: The ultimate winner of DeFi liquidity mining

When the entire market is still immersed in the DeFi liquidity mining boom, what many people have not noticed is that USDT is undergoing a new round of accelerated issuance. According to the statistics of Beep News, since mid-June, in less than three months, on the Ethereum and TRON chains alone, USDT has carried out 28 additional issuances, with a total of 6.12 billion additional issuances, and the average The amount of additional issuance has increased significantly. Before 3.12, the average additional issuance was 60 million each time, and now the average additional issuance is more than 200 million each time. Source of information: Before and after the issuance of TokenviewUSDT, on the one hand, the demand for USDT increased and the transaction volume increased. Foreign media DC FORCASTS reported that the daily transaction volume of USDT once surpassed Bitcoin and PayPal, the largest payment service provider; The market value of USDT rose. On September 2, USDT once again surpassed XRP to become the third largest cryptocurrency by market value. USDT is ushering in a new round of explosion, and this time the promoter is DeFi liquidity mining. By observing the main USDT holding addresses, we can see that DeFi projects are siphoning USDT assets. Among the main holding addresses of ERC20-USDT, there are already many DeFi platforms, such as Aave, Curve, Uniswap, etc., among which Aave’s holdings surpass the centralized exchanges and rank first; among the main holding addresses of EOS-USDT, DeFi Projects or platforms account for more than 23%. If Bitfinex, which has an ambiguous relationship with Tether, is not considered, the DeFi platform DeFisswap also ranks first in terms of currency holdings. Tether: USDT launched on the Solana blockchain on March 9: Tether has announced that USDT has launched on the Solana (SOL) blockchain on March 9. According to Tether, Solana will enable users to conduct USDT transactions at a speed of over 50,000 transactions per second. Tether is already integrated with Ethereum as well as several blockchains such as Algorand, EOS, Liquid Network, Omni and Tron. [2021/3/11 18:36:56] ERC20-USDT main position address information source: Etherscan EOS-USDT main position address information source: bloks.io and all this is mainly due to the fact that most liquidity mining projects support USDT Stake mining. Beep News counted 20 mainstream liquidity mining projects or platforms, including YFI, YFII, Curve, Uniswap, Swerve, SushiSwap, DODO, YAM, dForce, UMA, DMD.finance, SUN, Pearl, etc., and found that More than 70% support USDT mining. USDT is not only a DeFi infrastructure, but also a branch - the standard configuration of liquidity mining. Gate.io will open CRU/USDT trading at 12:00 today: According to the official announcement, the 77th round of Crust Network (CRU) voting for listing on Gate.io airdrop benefits has ended. The number of participants in this activity is 1,309, a total of 36,190,633 votes were cast. The number of votes exceeds 10 million, which meets the requirements for currency listing. According to the rules, Gate.io has airdropped 1,400 CRU token rewards for users, and will open CRU/USDT trading at 12:00 on January 20 (today), and then open the withdrawal service. [2021/1/20 16:34:47]Since mid-June, locked assets in DeFi have shown explosive growth, from about US$1 billion to nearly US$10 billion now, so stablecoins like USDT How much of it is there? Taking yearn.finance as an example, yearn.finance currently supports 9 fund pools including yCRV, ybCRV, crvRenWSBTC, YFI, DAI, TUSD, USDC, USDT, and aLINK for pledge mining, among which yCRV, ybCRV, DAI, TUSD, USDC, USDT is a stable currency or related to a stable currency. As of writing, the total amount of locked assets on yearn.finance is about 410 million US dollars, and the 6 pools related to stablecoins mentioned above account for more than 75% of their pledged funds. It can be seen that, like USDT Such stablecoins are the main choice for users when doing staking mining. 15 million USDT was transferred from the Tether Treasury wallet to Huobi Exchange: Whale Alert data shows that around 8:09 on June 3, Beijing time, 15 million USDT was transferred from the Tether Treasury wallet to an unknown address beginning with TWDjXK, and then The unknown address transferred 15 million USDT to Huobi Exchange. At current prices, it is worth about $14.94 million. [2020/6/3] Source of information: https://yieldfarming.info/yearn/yvault/ For the purpose of pledge mining (wool extraction), the market demand for stablecoins represented by USDT has greatly increased, so we It can be seen that treasuries such as USDT, USDC, PAX, BUSD, etc. frequently send news of printing money, and the speed of additional issuance is no less than around 3.12, and the intensity of additional issuance is even worse. In fact, in addition to staking, the trading activities of stablecoins on decentralized exchanges are also active. On the one hand, it is because of the monetization logic of "miners" dig-lift-sell-reinvest. "Miners" often use the built-in decentralized trading function of the wallet or directly exchange the mined coins into public chain coins or stable coins on the decentralized trading platform, and then reinvest. Data from DappTotal shows that the transaction volume on decentralized exchanges has recently peaked, and the previous significant rise was during March 12, when users panicked and transferred assets to decentralized exchanges to avoid risks. Under the current situation, the impact of the liquidity mining boom on the growth of decentralized transaction volume (including stablecoin transaction volume) is more significant. More than 21.05 million USDTs were transferred to Binance with a value of approximately US$21.196 million: According to Whale Alert data, at 9:46:10 Beijing time, 21,050,024 USDTs were transferred to Binance from addresses starting with 0x0df7, with a value of approximately US$21.196 million. [2020/5/3] Source of information on changes in DEX transaction volume: DappTotal In terms of the growth of stablecoin transaction volume, taking the stablecoin exchange platform Curve as an example, its transaction volume has also increased significantly in recent months, and the stability of the entire market The demand for currency transactions can be seen. Changes in Curve trading volume Information source: DeBank Analyzing the reasons behind this, TokenPocket co-founder and CTO Chen Da told Beep News that this is mainly because there will be a huge demand for exchanges between stablecoins for a long time. "There are stable coins on many blockchains, and they are of different types. For example, DAI based on over-collateralization, which is used more frequently in DeFi or wallet applications; for example, based on fiat currency collateral, it is supported by many centralized exchanges. It is more convenient for them to transfer USDT and USDC on the exchange. Different stable coins can be understood as representing different circles. The exchange between stable coins is equivalent to the cross-chain interaction of these circles, as well as the integration of different scenarios and functions. Switching, this will be a demand for a long time in the future, and the demand is huge, and it has great potential." Dynamic | 9.8 million USDT transferred to Huobi Exchange worth about 9.9075 million US dollars: Whale Alert data monitoring, Beijing time At 21:21 on November 25th, 9.8 million USDT was transferred from Bitfinex exchange to Huobi exchange. Based on the current price, the value is about 9.9075 million US dollars. [2019/11/25] The stablecoin market is undoubtedly the winner of this round of DeFi mania, but why is it that stablecoins capture most of the value of liquidity mining instead of other currencies? (Currencies such as ETH will undoubtedly also benefit.) First of all, it benefits from the biggest feature of stable coins, stable prices. Whether it is pledged mining or liquidity mining, users are essentially unable to quickly deliver pledged assets, that is, they cannot respond quickly to price fluctuations of pledged assets, so assets with stable prices are the assets that users pledge The first choice for mining and liquidity mining, in order to achieve principal preservation. Secondly, the most criticized point of automatic market making platforms (AMM) like Uniswap is impermanent loss. The so-called impermanent loss refers to the arbitrage loss caused by the information gap (price) between the AMM platform and the efficient market. Here is an example: 1. Suppose there is an ETH/DAI liquidity pool on Uniswap. The price on Uniswap is consistent with the price on the market. The prices and quantities of the two assets are set as follows, and k=10,000 can be calculated. (Note: The Uniswap algorithm mechanism is k=x*y, k is a constant, and x and y represent the quantity of the two assets respectively) 2. Assuming that the price of ETH in the market rises to $110, then there will be arbitrage opportunities on Uniswap , Suppose the arbitrageur buys x ETH from Uniswap with y DAI, x and y will satisfy the following relationship: (1000+y)*(10-x)=10,000; 1000+y=110*(10-x). It can be calculated that x=0.465, y=48.81. After being arbitraged, the asset value in the hands of the market maker becomes 2097.62 US dollars. Compared with the simple holding currency (worth 2100 US dollars), the loss is 2.38 US dollars, mainly because of the arbitrageurs When trading ETH/DAI on Uniswap, the price calculation method (k=x*y) is different from the market price (ETH=110DAI). Uniswap impermanent loss information source: Bancor Observing the above calculation process, we can find that the impermanent loss is actually caused by the relative price deviation of the two assets from the initial value. The impermanent loss is called impermanent loss in English. The relative price of the asset returns to the initial state, so no matter how much fluctuation there is in the process, the loss will eventually disappear. However, it is worth noting that in many cases, the relative price of assets cannot return, and impermanent losses often turn into permanent losses. In this case, market makers began to consider reducing the relative price fluctuations of the two assets Resist the risk of impermanent losses, such as providing market-making services for synthetic assets (such as sETH/ETH) and stable coins (such as any transaction pair between DAI, USDC, and USDT). Therefore, stablecoins have great value and use cases in helping market makers resist impermanent losses, which is one of the reasons why stablecoins can capture the value of liquidity mining. According to TokenPocket Chen Da’s point of view, the reason why stablecoins represented by USDT can further develop in this round of DeFi boom is not only that stablecoins can resist impermanent losses, but also because stablecoins such as USDT are already relatively popular. Cryptocurrency users already hold USDT, so the corresponding liquidity pool will have a wider audience; in addition, most currencies participating in liquidity mining will form liquidity trading pairs with stablecoins, which is also because doing so is more important in pricing It will be more convenient, and the price will be more intuitive for users. In the conclusion, I have to say that stablecoins are a very good class of assets evolved in the encrypted world. When talking about payment scenarios, Bailey, the governor of the Bank of England, even directly denied the value of Bitcoin, and compared stablecoins with central bank digital currency (CBDC) ) on a par. Due to its price stability, stablecoins can play a certain role in risk hedging, whether it is in a black swan event in the market, or when the market is improving and speculative sentiment is serious. Stablecoins represented by USDT are becoming more and more popular, and they have indeed become a type of basic asset and the infrastructure of the encryption industry. And those stablecoins that rely on mechanism settings to ensure price stability, such as algorithmic stablecoins and over-collateralized stablecoins, can be separated from centralized control to the greatest extent under the premise of ensuring "stable prices", which is even more commendable. Of course, at present, it seems that few stablecoins can achieve "complete decentralization". Even DAI is adding more and more centralized assets to the collateral list. Note: The content-ethexc in this article is not intended as investment advice.

Tags：

Binance Apps