cmdefi

The 19% subsidy on borrowing from Compound has been ongoing for a while now, and there is still quite a bit of arbitrage space for borrowing.

It is basically suitable for all nested Lego strategies; just pay attention to the capacity of the lending pool, as once it is full, the interest rates will soar. Borrow slowly, and depositors will gradually add funds. It is suitable for medium to small DeFi users.

At this time, you can only play the mainstream of each sector; at least that's the case for DeFi. Attention is too scattered in this cycle, and alpha opportunities that rely on small investments to gain large returns have all been captured by memes, making it very difficult for smaller assets in other sectors to survive.

Unless it's a groundbreaking innovation, like the level of AMM during DeFi Summer, if you think there is one, feel free to discuss.

Many people have asked, the WBTC/WBTC Pool mining on Unichain has about 8% $UNI subsidy returns, what are these two WBTCs and what are the risks?

(1) First of all, initially there was only one WBTC native version that came from the Superchain bridge on Unichain, this version is closer to the mainnet's WBTC, but it must wait for a challenge period of 7 days to return to the mainnet.

(2) The other WBTC is actually WBTC0, a full-chain token version supported by LayerZero. The advantage is that cross-chain transfers are very fast and do not require a 7-day wait, but its security also relies on LayerZero, technically it can be equated with USDT0.

Currently, this version of WBTC0 is strongly supported by Unichain and plans to continue subsidizing it. The incentives for WBTC on the Superchain bridge will gradually decrease, and this WBTC/WBTC Pool is actually used for asset transition. Whether there will be long-term incentives is unknown, but according to the latest Gauntlet incentive plan, there are incentives for the next 15 days, with the amount slightly increased compared to before.

Plume is currently pushing many combinations of RWAfi and DeFi strategies. RWAfi involves depositing money into RWA Vaults, which differ based on the underlying asset composition, such as government bonds, private credit, oil and gas, and Crypto Carry Fund. Once deposited into the Vault, a new token is minted, which can then be paired with stablecoin on-chain assets, using $PLUME to incentivize this liquidity, representing a prototype of RWAfi + DeFi.

I haven't tried it personally yet, but I've observed that the yields indicated by the Vault are estimated values based on past performance. After exploring further, there is a certain discrepancy between this and the current APR, which may be due to yield fluctuations and changes in TVL. Additionally, it’s important to note that the funds in the RWA Vault have a lock-up period for redemption, so if you deposit, you should be prepared for a long hold. However, the incentives provided by $PLUME are relatively stable (with the trade-off being that Royco also requires locking up). If you can accept the lock-up and the systemic risks of RWA, the overall returns still seem to be higher than the current market yield levels.

DYOR

Plasma was秒了, as if saying the market isn't out of money, but rather the projects you are looking at just aren't being bought. 😂

Let AI help people mine in DeFi; I think this track is still too early.

With the current technology, identifying the most profitable mines is not a problem, but whether AI can better identify the risks of smart contracts is still questionable.

In the long run, this track is a trend, but when will it work? I think it will only come to fruition on the day that AI can replace auditing; otherwise, there will be mostly concepts and gimmicks.

The Aave Umbrella new staking module is now online. The current yield is acceptable, but the growth of TVL needs to be considered. Each pool has a target APR set, which simulates the yield when TVL reaches the estimated target. The target yield reference value for USDC is around 8%.

Total yield = Aave Yield + Umbrella rewards

The Umbrella rewards part is Yield outside of interest and comes from a portion of the protocol's income.

Let's calculate the account of Spark Points:

What is currently uncertain is how many $SPK will be allocated to the Points event.
The known data is as follows:

- Pre-Farming 1: 130M
- Pre-Farming 2: 14.48M/month, ~174M
- Aave: 7.24M/month, ~87M

The known distribution is 130+174+87=391M.
The total known allocation for the first year is 1.63B.
So what remains unknown is 1630-391=1239M.

Let's break it down:

There is still over 1.2 billion left, which is actually quite a lot, far exceeding the previous Pre-Farming mining. The question is how to balance between Pre-Farming and Points, after all, those who invested real money have been saving for 1-2 years. If a large proportion is given to Points, it is likely to be criticized, but if too little is given to Points, many people may be disappointed, as the current market expectations are quite high. It's time to test the actuaries at Spark.

(I personally think it's basically certain that this 1.2 billion will not all be given to Points; even if it is all given, new Points events will come out later to dilute it.)

A game of strategy among actuaries.

I found that some deposits of BTCFi are really quite high, but they have no presence in the market at all. Who is depositing, is it an information cocoon?

DeFi projects, in fact, the best way to promote is for the official team to share earnings and arbitrage opportunities. For veteran players, there are many such opportunities that are rarely discussed. It's impossible to rely on players to share, because the profit logic of DeFi is completely opposite to that of trading. In trading, everyone is willing to shout because it requires mutual support, but there are very few people willing to talk about the real profitable mining/arbitrage opportunities. However, for project parties, this is the best advertisement.

Stablecoin Bill and Its Relation to DeFi
Microstrategy on ETH Version
Feeling the market activity is increasing

Reflections on DeFi over the past week
( - /12)🧵

The Lending AMM model has already gnawed off a piece of meat from the red ocean of the DEX market:

The first to use this model, Fluid @0xfluid, has daily trading volumes that consistently rank among the top three alongside Uniswap and Curve. Euler @eulerfinance is also preparing to launch EulerSwap to join this battlefield, which is one of the few DeFi innovations seen in this cycle that genuinely change the trading environment and improve capital efficiency.

Ripple's $RLUSD subsidy is very aggressive. After quickly filling 150 million on Aave, it has started to distribute funds on Euler.

(The 150 million amount on Aave maintains an 8%-9% APR)

The $500 million valuation ICO of Plasma, from a background perspective, is worth this price, but if you ask how large the space is, there are too many uncertainties and variables.

Individuals might not invest, but if it explodes after TGE, I would consider chasing the price. Based on the following judgments:

1. Depositing to get a quota, if you don't put in a few million, according to this valuation, even if you get the quota, the sense of existence will be very low; this model is not friendly to small and medium-sized amounts.

2. Plasma focuses on zero-fee USDT transfers, which directly competes with the largest issuance network of USDT, TRON. TRON's transaction fees are actually quite expensive right now, so there is a market for this, but the problem it brings is how Plasma can profit with zero fees, as TRON comfortably relies on transaction fee income. There are pros and cons.

3. An advantage is that Plasma has the support of Bitfinex and Tether, which should provide sufficient resources for growth and expansion. I estimate many people are attracted to this, making it the biggest positive factor.

4. Another feature is that Plasma plans to utilize the security of Bitcoin, but it is still unclear how this will be utilized; this aspect is quite standard.

Overall, there are not many negative points, but many unknown factors, and it is indeed not cheap. However, if it truly becomes the next generation of stablecoin giants, it will definitely be worth more than $500 million; there are too many variables. From various perspectives, rather than locking large amounts into the ICO, I would prefer to wait after TGE. I believe this kind of project needs to develop, and there won't be a lack of opportunities to get in, even if it means chasing a higher price.

There are many pitfalls in custom interval Pool mining. The mining area for Binance Alpha assets on OKX wallet is strategically correct, but most assets in the Alpha sector are highly volatile, making it as difficult to manage intervals as it is to trade cryptocurrencies.

For newcomers to DeFi, the yield calculation similar to the Uni V3 model often presents mostly optimal values from the frontend, as the yield is determined by the interval, which strictly speaking is different for everyone.

The advice from veterans is:

1. The best choice is assets with low volatility but high trading volume, but such assets are rare, so typically, large holders are engaged in ETH, WBTC, or blue-chip assets.

2. If you want to deal with highly volatile assets, you need to have a good understanding of the asset and the ability to judge trends, but this difficulty is actually similar to trading cryptocurrencies and is only suitable for a very small group of special individuals.

3. If you have advanced technology, you can certainly automate interval adjustments, but this difficulty is also not low. Many projects have emerged in the market specifically for this purpose, but none have succeeded.

In the past few days, I have carefully tasted the Genius stablecoin bill again.

I have read many analytical articles, and macro-wise, the market consensus is similar. Micro-wise, the area I am concerned about is the impact on DeFi. If the general framework of this bill remains unchanged and is strongly promoted, from this attitude, I personally judge that regulation on DeFi may not be far in the future.

The problems and solutions encountered by Sui this time illustrate the current state of the industry. It must be acknowledged that there are many "pause buttons" in the current blockchain.

With the current level of technology, it is indeed impossible to achieve on-chain, solidification, and operate like a flawless perpetual motion machine. It requires contingency plans and corrective measures, but this does not change the ultimate goal of blockchain. If a chain cannot gradually move towards decentralization during the correction process, it will ultimately be eliminated.

Market Changes Under the Stablecoin Bill Genius:

(1) Most of the existing projects do not meet the requirements; this bill is prepared for new entrants in the market.

(2) What will happen to these stablecoins on the chain? They will undergo some turmoil, gradually finding their own transformation/settlement/exit.

(3) The demand for completely decentralized stablecoins still exists, such as non-USD pegged, censorship-resistant, and as a native pricing unit. But the path has become longer.

ETH Upgrade
RWA is cooking
DeFi giants band together for exclusive LEGO time

Reflections on DeFi over the past week
( - /10)🧵