DeFi….decentralized finance. Always remember the
first part of that abbreviation, decentralization, because the evil centralized entities are going to
try and make you forget that is what blockchain is all about. Well we won’t let you ever forget.
You ready like bubbles for Tyler’s decent DeFi…..also know as, it’s time for Chico Crypto! Now, everyone should know about the project
who laid the groundwork for DeFi to evolve, expand & grow into what we know today.
Ethereum’s base layer of course, but there is another one….the first decentralized
and programmable stablecoin.
Makerdao & dai, which launched it’s initial contracts on the
mainnet, all the way back in December of 2017. So why is makerdao important? Well, with dai, it
was the initial lego pieces. Other DeFi protocols and projects were able to take form because of
Maker and dai, like Compound Finance. And then, as we know, defi is built to be compatible, many
others like Uniswap metamask, and even coinbase have built to connect together with ease. Dai, has
become a staple of almost every defi application, used in some form all the top dapps.
And because of this integration and use across this blossoming sector, since
launch, the dai trajectory has been up and up…crossing 100 million when it
was single collateral by November 2019 and since the change to multicollateral
dai, it has now crossed 2 billion dai today.
But many people argue that Dai was a better
stablecoin, when it was single collateral, only Ether could be used in CDPs, collateral
debt positions, which created the dai stabelcoin. Today, the basket of collateral is much larger,
with many erc20’s including permissioned assets & stablecoins. Going to daistats.com,
we can see luckily dai from ethereum collateral still makes up about 60 percent of dai creation,
but the next largest is usdc at 16.34 percent, a permissioned stablecoin. Then another
permissioned asset, wrapped bitcoin, at nearly 10 percent, then another permissioned
stablecoin, trueusd at 1.35 percent, then the next largest another permissioned
stablecoin, paxos at nearly 1 percent. I hope you get the picture, makerdao,
with the permissionless stablecoin dai, is slowly getting swallowed up by permissioned
assets….and I am critical of this too. I hold Maker, and I use dai…but if there is a
better option, I’m going to be eyeing it. What is that option? It’s the Unit protocol & it
launched back in December with more collateral options than Dai’s multi collateral, over 40 to be
exact, but going to the dapp,that list has grown, more erc20’s, more liquidity pools,
from curve, uniswap & sushiswap….
You see, the limit’s MCD, multicollateral
dai put out in the beginning, with an affinity towards permission stablecoins have
allowed a large growth of collateral control. Even Evan Van Ness, ethereum writer,
& well connected etherean researcher is public about this criticism, saying
back in December “I'm a fan of MakerDAO, but I think it's very bad that more than
50% of collateral is permissioned assets. Unit protocol by providing a multitude of
options, out the gate. Allows for a more even spread between collateral risk with one
pool. USDP, their minted stablecoin, has more options & those options aren’t predominantly
stablecoins, or stablecoin pools like Makerdao… ANd looky here, on DeFi Llama, TVL of Unit
protocol to MINT USDP has been surging. In just a few weeks it has crossed 50
million, and looking to break 60 million very soon.
This collateral TVL,
according to dune analytics, has allowed for the creation of over 14
million USDP in just a couple of months. Makerdao competitor, is bullish to
me in the long term…But the reason I see this doing well in the short
to medium term?? Is the collateral they have been adding. Going to this February
12th tweet, they specifically mention sushi, curve and yearn finance. Saying the borrowing
limits for these ecosystem collateral types. So this is important to me, because number 1,
sushiswap is apart of the yearn ecosystem. Why is Duck specifically increasing borrowing limits
for these two and their assets?But Curve? Why Curve? Well just last month, a goodgirlgonecrypto
on twitter replied to andre’s tweet about yearn and curve turning 1 year old. She asked “Any
special cooperation to celebrate the birthday of Curve and Yearn Finance ser lel?
What ever the freak that means….but the Andre Cronje replied “Yes.
currently. Should be live in next ~1-2 weeks” Now, what this is, is still to be seen, like
always a delay on it being live has happened. But for some reason, I think Unit protocol may be
involved. And this makes me think that. February 9th…the curve finance tweeted this. The
creation of a new metapool, for UDSP. And then the Unit protocol, all in the past couple
of weeks has been tweeting about curve, yearn, sushi and retweeting them on the regular. It seems
like something is cooking and quacking to me.. And yearn, got a big ole boost last week, February 10th. Grayscale Investment
trust filed for a yearn finance trust. But it didn’t stop there it went into the
yearn ecosystem with Sushi, that same day!!! So, if Unit protocol is involved with Yearn,
becoming part of it’s ecosystem.
Whoooowhee! But since Sushi is getting a look from Grayscale, you would think that would be bullish,
for that sticky bun, bao…who is confirmed to be a secured project within
Sushi, they stated that in their 2021 roadmap. And BAO, is not messing around. This medium
post got overlooked about the scope of BAO. February 3rd, the baoman posted “A Dumpling
vs Wall St: Why we need Synthetics. He said in the post “Incentivized synthetics allow you to
start building an open financial data markets. But once you have synthetics,
you own the financial data stream to anything because you can incentivize
liquidity to make it more accurate.
Those who own financial accuracy can then pick
any finance business they want to start. Goodbye Moody’s, Meridian, Experian,
Fannie Mae, and others. Hello BaoBanks.” The Baoman, has the vision of scalable, cost
efficient, which means market ready synthetics this year. He’s doing that with Layer
2, and xDai for now. Over the weekend, we got some great news about this…the migration
plans for xdai. That was february 13th….
Well, within 3 days, yesterday the 16th, it was
already moving. Baoman announced that baoswap had been migrated to xdai for alpha testing….this
was a surprise announcement, the put forward in the migration plans & it’s already here in
alpha. But going to the migration plan, the bao team said this regarding baoswap “Before we
announce the pools that will be on the xDAI chain, it is time for one of our two surprise
announcements. As you know our community has a partnership with Sushi to use their mainnet
LP tokens for our final synth products, and for this we decided we would not deploy our own
swapping protocol on the mainnet.
However we feel comfortable doing this deploy on other networks
where it is not competitive with Sushiswap, and given the lack of incentivized farms on
xDAI and our need to create swapping tools we felt it was worthwhile to deploy our own. So
Bao will create a Uniswap fork on xDAI called “BaoSwap” and that is here my friends…they
continue “BaoSwap will use the same smart contract source code as Uniswap and the core contract
and router are already deployed on xDAI. We are currently going through final testing of the UI
and will be releasing it prior to the migration. BaoSwap fee collection will feed into
a future Bao staking program (much like xSushi) which will require a governance vote to
deploy once ready sometime later in the Spring” This is much bullish for bao holders, the
feecollection of baoswap into the future bao staking program….but I want to rewind
to the beginning of what the team said. They explained “Before we announce the
pools that will be on the xDAI chain, it is time for one of our
two surprise announcements” So since Baoswap is here, are
we gonna get the announcement of the pools that will be on the xdai
chain??? Chico Crypto thinks so!! So, a stablecoin competitor, Unit
Protocol with USDP.
Connected to yearn? Connected to Sushi? That is to be seen…but, if
that is true. Could there be eventual connections between Unit and BAO since they are within
Sushi?? The world of DeFi is getting complex, but Chico will always try to stay
Decent…..Cheers I’ll see you next time!.