Cross-chain & All — the Alchemy of new Top 20 DeFi Projects
On August 18th, Acala, Laminar, PolkaWallet, RenBTC and PolkaWorld co-hosted the “Haina River, adjacent to cross-chain” AMA , and invited multiple Defi projects of the Polkadot Ecosystem to communication. The following is the summary of this AMA .
Guests：Ruitao（ Co-Founder of Acala ）& Bryan（Co-Founder of Laminar） & Taiyang（CEO of Ren）& Fuyao（Founder of Polkawallet）
Hello, Renacas！I am delighted to host the Cross-chain & All — the Alchemy of New Top 20s. “New Top 20s” refers to a group of projects that are expected to enter the marketcap Top 20 just like Chainlink, and replace some obsolete projects which are still in the top 20. All New Top 20s have right directions, solid technologies, active and global communities, such as Polkadot, AAVE, REN, Loopring as well as the highly anticipated Acala Network, today we specially invited founders from REN, Acala, Laminar, and Polkawallet to talk about their allliance and amazing defi alchemy experiments on Polkadot.
Question for All（Ruitao，Taiyang，Bryan，Fuyao）：
- Can you breifly introduce yourself and your project ?
Ruitao：Acala will be a parachain running on the Polkadot network, we’ve positioned Acala as the “special financial zone” of Polkadot. Acala Network provides a set of financial primitives to enable DeFi on Polkadot, upon initial launch, the network will offer 3 core financial protocols built on chain level:
1, Decentralized stablecoin, aSUD is the de-facto standard stablecoin on Polkadot, fully decentralized and pegged to US dollar. aUSD will be the base currency for trading, circulating within the Acala shard and to other Polkadot Parachain via XCMP.
2, Liquid DOT, a trust-less staking derivative protocol, allow DOT/KSM holder to stake via a trust-less pool and mint LDOT token, a yield bearing token that is transferrable and redeemable. LDOT token can be also used as collateral to mint aUSD, allow traders to take out a loan without sacrificing staking return.
3, Built-in DeX, Acala has a built-in AMM DeX as a unified source of liquidity, not only the DeX will enable users to trade automatically, the liquidity can also be used to provide automatic swap transparent to the users, enabling much friendlier UX, e.g. renBTC users can pay renBTC as gas fee when transacting on Acala.
Beside the core protocols offered by Acala, the network itself is also a fully-pledged blockchain on its own, projects can build on top of Acala, e.g. renproject has deployed a remVM bridge, developers will also have the option to deploy smart contracts on Acala. Acala’s goal is to become the financial hub of Polkadot & beyond, a domain specific chain fine-tuned for finance.
Taiyang：Hi, I’m Taiyang the CEO of Ren. Ren is a multi-party computation (MPC) protocol we have been developing since late 2017. You can think of Ren as a distributed computer which is able to move BTC and other assets from one chain to another. Since our launch a few months ago, there has been over $250mil of volume generated by RenVM (the core protocol).
Right now, Ren is being used most on Ethereum, but we see huge potential for growth on other chains, especially Acala and the Polkadot ecosystem.
Bryan：Laminar will be a parachain of Polkadot, it includes two protocols: Synthetic Assets and Margin Trading.
Synthetic assets protocol allow people to generate any kind of high liquidity assets on Laminar baked by over collateralized stable coins. This will be able to bring new category of assets for crypto users.
Margin trading protocol allow trader to perform leveraged trading with various assets, crypto or not, on Laminar. This will provide more trading options for crypto traders at same time offer a new transparent and decentralized margin trading platform for traders in traditional finance markets.
Fuyao：Hello, everyone, I’m Fuyao Jiang, co-founder of Acala and founder of Polkawallet. I was committed to the establishment of the Polkadot community and ecological development, and held many Polkadot community activities. Polkawallet.io is the first mobile multi-functional wallet with Polkadot as its core, founded in 2018.
The project adopted React Native at the beginning, and now uses Flutter to refactor, and the code is always completely open source, providing strong support for the development of Polkadot’s ecosystem and the security of downloaded content. Currently, it supports the four Substrate chains of Polkadot, Kusama, Acala and Laminar, and is being re-modularized and committed to smooth access to other parachains. Functions include asset management, portable staking, The portable participation like Democracy, and financial services of various parachains. Supporting more Polkadot ecosystem chains will make Polkawallet’s business more and more diversified and user-operable content more diverse in the future.
As the first funded project of Web3 Grant, this project is still struggling to be on the first line of Polkadot ecosystem construction and expansion. The first significance of this wallet is to pave the way for more mobile wallets to integrate Polkadot ecosystem projects in the future. Explore new solutions for new innovative businesses.
Questions for Ren（Taiyang）：
1.Since the genesis of Bitcoin in 2009, 10 plus years on now, it has certainly become a legitimate and necessary asset class or hedge instrument for many people, it constantly made it to mainstream media, stir debates in mainstream finance world, and also made it into regulators arena. For DeFi specifically though, Bitcoin seems to be that liquidity fuel as we can see how much activities that tokenized BTC have generated on Ethereum.
This is a question to Taiyang (Ren). What do you think the barriers or challenges are(if there is any) to bring Bitcoin into DeFi? Also specifically, what’re the unique value proposition of RenVM and renBTC in solving those challenges.
Taiyang：The interoperability challenge has always been centered around how we allow liquidity to move between one chain to another. RenVM and renBTC have been designed for this purpose.
There are many constraints when building an interoperability layer for blockchains. Building a distributed network of nodes which can custody large amounts of assets is a big challenge and one we take seriously. All protocols in the interoperability space must align economic incentives and scalability to ensure usage but also safety of funds.
RenBTC is currently an ERC20 token that represents Bitcoin on top of Ethereum. It is currently the easiest way for users to access DeFi using their Bitcoin. Curve.fi (CRV) is a recent example allowing their users to deposit Bitcoin into the liquidity pool by using RenVM.
RenBTC can be used on multiple blockchains in the future (including Acala) and will be able to interact with any DeFi application.
2. Since Ren’s mainnet launched, you guys have grown tremendously. I saw on 7th Aug , 10,000 BTC were bridged to Ethereum — that was impressive. Can you reveal a little bit to us how you achieve such amazing results in just couple of months time? and what are your visions for Ren and future development roadmaps?
Taiyang：We have a great development team led by Loong Wang (CTO) who have been working on Ren since 2018. For over a year, we’ve been iterating and testing the RenVM protocol and during this time DeFi has increased a lot in value. The timing of RenVM’s release in May coinciding with the rise of DeFi’s popularity has led to large amounts of renBTC being minted.
We also put a large emphasis on user experience when designing RenVM (and the RenBridge portal). We believe DeFi is still unaccessible for the average user and all projects in this space must continue to innovate on user experience. An example of this can be seen in any application that integrates RenVM. Users can directly send BTC to a Bitcoin address and sign one additional transaction to mint renBTC, no additional actions are required. We believe this two step process is critical to our user experience and hopefully we can one day reduce this to a single transaction!
Finally, we have a strong community that has constantly tracked our progress and supported the network. This has helped with our adoption efforts and liquidity throughout the system. We will continue to innovate on the protocol by integrating new chains. Our integration with Acala will allow renBTC to move freely between Ethereum and Acala too.
3. In July , Ren and Acala co-annouced the collaboration , to integrate Acala Network/Polkadot in RenVM multi-chain API, and bring renBTC and potentially other isoloated asset classes onto Acala and the wider Polkadot ecosystem. During the 3rd season of the Acala testnet campaign, more than 1,300 renBTC were minted and is one of the most popular collaterals. Why did you choose to collaborate with Acala ? You could have built a parachain yourself.
Taiyang：We chose to collaborate with Acala as they have a strong team and are the leading parachain on Polkadot. Acala already has an established ecosystem and strong technology developed. If we were to create our own parachain we would be “re-inventing the wheel”. Combining our efforts is the most efficient pathway to success and we look forward to working together.
Question for All（Ruitao，Taiyang，Bryan，Fuyao）：
1、The Yield Farming mania has set off a DeFi boom — reminds me a lot of 2017, but the super high gas fee and congested network, making it inaccessible to individual users, but a whale-concentrated money-chasing to some extend FOMO game. But in your opinion, what is DeFI trying to achieve? and what are the most important or critical problems we need to solve to achieve that?
Ruitao：A well known secret is that, DeFi is a very whale heavy game, due to current performance limitation of underlaying network. For end users & retails traders, trading with small amount of capital on DeFi bring little return, with high cost associated. This contradicts the value proposition of decentralisation, to offer an accessible network that anyone can participate. To make DeFi truely grow to its full potential, we need to make DeFi less whale heavy and more accessible.
Acala is built on top of Substrate/Polkadot, in which Acala can take full advantage of the high performance PoS network. Trading on Acala is not only faster, but also cost a lot less in network fee. Acala also features innovative design such as allow paying gas fee in non-native token, e.g. renBTC, allowing a much smoother onboarding experience for bitcoin users. We hope Acala can evolve to a more accessible DeFi platform for anyone, not only whales, to transact & trade.
I also personally think the current DeFi space is getting a bit overheated, I think we should always focus on the fundamentals, such as number of users, liquidity pool size & trading volumes, other than just pure speculation.
Taiyang：In my opinion, DeFi is centered around building an ecosystem of more accessible financial products that range from trading to lending markets. Yield farming is only one aspect of DeFi and can be thought of as a bootstrapping mechanism for projects.
Compared to 2017, we now have many working products that many people are using in the DeFi space, rather than only speculating on a white paper. However, I would still be cautious when interacting with many yield farming protocols as the high yields we are seeing now are definitely not sustainable long term.
Two critical problems we need to solve with DeFi are scalability and privacy. Gas fees are currently too high for the average user to interact with many protocols so I am keeping a close eye on layer 2 protocols. Privacy is also an important problem to solve. Imagine if you were taking out a loan from the bank, and suddenly the entire world can see your transaction. This is the current state of DeFi.
Overall, I think DeFi has immense growth potential long term and can disrupt many traditional financial services
Bryan：In traditional finance sector, or DeFi market prior than early this year, the yield or a finance production is usually measured with APY (annual percentage yield) or APR (annual percentage rate), and >15% usually is a pretty good deal for a no-to-low risk product. But in some of the recent DeFi protocols, the return rate, or yield is measured using daily or even hourly rate with single digit percentage. This is simply unimaginable in a regulated finance sector, none of the regulators will ever allow this kind of products to exist. In one hand this shows the possibility of DeFi can achieve, on the other hand it also implies those kind of crazy return won’t be able to last long.
A sustainable finance product should be able to solve some real problems for people. Two protocols offered by Laminar will be able to bring a more diversified assets to crypto traders. This allow crypto users able to seamlessly tap into the traditional finance market, which is tremendously larger than the current crypto market cap. For traders in traditional finance market, Laminar offers a new permission-less, non-custodial, auditable margin trading platform. Traders will never need to worry about the platform risk anymore. In additional to that, with more integrated DeFi protocols, the capital efficiency of the funds can be further improved, and the additional profits will be distributed back to users, instead of taken by the platforms.
Fuyao：I think the mentality and field ethos issues that need to be resolved most. Some of the current DeFi products are actually FOMOs in DeFi sheep’s clothing, and the purpose of users who enter to play is also very clear，just RUSH FOR BONUS . Basically, it is the redistribution of funds from insiders. In 2017, relying on a white paper to crowdfund, now it has become an incentive to generate data and use data to crowdfund , so the routines of these projects are roughly the same as that of Luckin Coffee.
Therefore, if DeFi wants to truly develop, it must be patient to polish up several products with usage scenarios. There is real demand, not short-term bubble speculation. The Data of developing need be correct and real , and the data grows naturally. Only with this kind of development ethos and mentality can it break through the current bottleneck of DeFi and find a higher level of positioning.
Questions for Acala （Ruitao）：
1、In Acala’s latest testnet campaign , you invited Laminar and Ren to be part of the cross-chain trading competition. You also very interestingly have a 3-week long campaign, where week 1 user participate by trying out various aspects of the systems — minting renBTC, borrowing aUSD, staking, using aUSD for margin trading forex etc…
Week 2 is Trading Competition , week 3 is Black Thursday and Emergency Shutdown drill , and obviously the campaign is quite success generating lots traffic, and new uesrs… can you explain the thinking behind a campaign like this, why you chose to do it this way？
Ruitao：The goal to run the mandala festivals, is to simulate & test the Acala Network under real usage, and share our development progress with the community.Acala is going live on Kasama/Polkadot very soon, to have the network exposed to real traffic & load provide invaluable data & feedback for the development team.To cover all features of the network, we designed 3 different scenario across a 3 weeks span.To make sure the network is getting unitised as real as possible, we have to provide incentive for testnet users, it is also an appreciation event for all the Acala fans & supporters.
2、According to Subscan.io statistics, the current Acala Mandala TC4 testnet has 14,300+ new accounts and 136,600+ transactions. While it is only a testnet, we feel the heat and enthusiasm of your community, what do yo make of the results? what insights or lessons you’ve gained from it?
Ruitao：We are overwhelmed by the participation from the community members, since we don’t have a professional marketing team, all these community growth are organic. According to test data, the Acala Network performed as designed even under extreme load condition, at the 3rd week, during the emergency shutdown drill, the network liquidated all positions in a short amount of time.Some community members provides feedbacks on UI/UX improvement, which the team will be following & improve.
3、Just a few days ago, Acala successfully connected to Rococo — Polkadot’s parachain testnet, in a local network, being the first parachain to do so. And you also shared all the source code for converting to a parachain and a cross-chain token implementation to all parachain developer community. This is super exciting news. And probably also means it’s close to launch and parachain auction. Can you tell us a bit more on Acala’s initial parachain auction on Kusama and Polkadot; and also the next step/next phase of Acala’s development?
Ruitao：Initial Parachain Offering (IPO) sets a new paradigm to bootstrap a network.It is a loss-less form of participation to bootstrap a network, DOT/KSM holders stake their DOT/KSM to earn Acala’s native token(ACA/KAR), to provide a slot/security for the project.ultimately these DOT/KSM will be returned holders at the end of parachain lease, it is essential liquidity mining, DOT/KSM holders mine ACA/KAR using their tokens without any risk.We will be releasing our IPO campaign website with details very soon, make sure to follow us on our social channels to get the latest update for IPO from Acala.
Question for Laminar（Bryan） ：
1、We also accounted close to 4.8 million aUSD crossed over to Laminar chain for synthetic asset and margin trading. Can you tell us about the use cases of aUSD on Laminar, what it enables, and how Laminar provides synergy to Acala as well as wider Polkadot ecosystem?
Bryan ：During this trading event, we have 1201 accounts made 2690 margin trades. More than half of the are ETHUSD pair and about quarter are BTCUSD. The number long and shorts are about the name and obviously most of the tradings are using 10x leverage, which is the max value we enabled for crypto trading.
There are 241 liquidations happened for 202 accounts. All those liquidations are detected and triggered by off-chain workers, executed with high priority, to ensure the systematic security of the platforms.
For synthetic asset tradings, there are 953 trades made by 763 accounts, the number and volume are less than margin tradings. This makes sense as the goal for people are to maximize their return so high return high risk margin trading will be the preferred trading tool.
Question for Polkawallet（Fuyao）：
1、Now for Polkawallet, the first moble wallet in Polkadot Ecosystem, it is also an undebatble super-wallet with great UX in Polkadot DeFi ecosystem supporting Kusama, Polkadot, Acala and more… Fuyao, can you tell us a bit more on the cool features Polkawallet provides?
Fuyao：Polkawallet provide Cross-chain asset one-stop management, convenient staking and governance, the private key is self-owned.
In order to give users a more humane and more convenient experience, as the entrance of the polkadot network, the user is provided with more intuitive visual data and status change display to guarantee the user’s right to know and network participation.
Support Multi-asset of Relaychain and Parachain, receive, and view the transfer history and state. Have the visual asset change analysis chart, make it easier for users to analyze assets. Users are notified when they receive the asset and can view the transfer details data.
Polkawallet makes it easier for validators and nominal ators to make their contributions, by making the charts more intuitive and having a detailed history of each validators, for better analysis and research.
Provides a more intuitive and convenient entry point for participating in governance. If there is a new referendum/proposals, you can view the details. Users can governance directly. So polkawallet also improves public Referenda engagement.
Many new functions have been launched recently, such as the on-chain treasury, governance discussion area, account social recovery, offline signature, financial applications, etc.
Polkawallet will follow in Polkadot footsteps and continue to expand the cross-chain ecosystem, which is a module for the near future. It will quickly integrate suitable cross-chain applications, and we believe that it will be a colorful application.
Question for Laminar & Polkawallet （Bryan & Fuyao）：
1、Laminar and Polkawallet are both founding members of Acala. Can you both, Bryan and Fuyao tell us about how the two team met and got to work on Acala together?
And please also share a bit more on your visions, and future development plans for each project?
Fuyao：We got the Grant from the Web3 Foundation, and meanwhile, we are helping Acala Network and Laminar develop convenient mobile interaction. At the same time, we also applied for Kusama Treasury funding. In the future, as Polkadot ecosystem mobile terminal , Polkawallet will develop towards the accessibility and diversity ，and continue to polish good products. Recently, we are also rapidly updating and have become a well-accessible asset management tool.
Polkawallet and Laminar met during the Kusama 2019 hackathon. The values of the two parties are very similar and it is easy to come together and do things together. The facts have confirmed all of this. Our products were launched quickly. The two sides cooperated very well during this period, and were recognized by many top international institutions. We will continue to polish the product and enrich the details as always. I believe there will be more beautiful historical moments waiting for us.
Laminar：Fuyao and me are both early participant of Polkadot ecosystem. Back at 2018, there isn’t many Polkadot ecosystem projects and few contributors we are all familiar with each other, but due to geolocation reason, we did not had the chance to meet face-to-face. Until 2019, PolkaWorld organized the first PolkaWorld Hackathon, I had the honer to be invited as a judge, and first time meet the Substrate & Polkadot community in China. This is also the first time the Laminar team and Polkawallet team meet each other in person. We all are true believers of Web 3 and Polkadot, as well as DeFi sector. Also we have realized that there are two missing pieces in Polkadot DeFi ecosystem: stable coin protocol and staking liquidity protocol. Stablecoin is the foundation of most DeFi protocols, which also includes the two protocols that Laminar offers. Staking liquidity protocol is a critical piece for DeFi ecosystem build on top in PoS chains. It ensures the yield of DeFi does not direct competing with the stakes required to ensure security of the network. As a result, Laminar and Polkawallet decided to co-found Acala Foundation and Acala Network.
In my opinion, Acala will be the foundation of Polkadot DeFi ecosystem. On top of this solid foundation, people will be able to build innovative DeFi projects. Laminar will be able to leverage the aUSD offered by Acala, use it as collateral, to build Synthetic Assets protocol and Margin Trading protocol.
One more thing, although DeFi is getting a lot of tractions recently, it is still very early compare to traditional finance markets. One of the goal Laminar is able to break the barrier between crypto markets and traditional finance markets, bridging the liquidity between markets and allow capital to flow without frictions like laminar flow, hence the name Laminar. Once we helps the crypto market to tap into traditional finance markets, we will be able to bring the capitals into crypto market as well as bring benefits from blockchain technology to traditional traders. We all believe the future finance sector will be based on all the innovative technologies powered by Web 3 stack. We hope we will be part of this journey and helping make it a reality with our work.
About Acala
Acala is a first-of-its-kind decentralized finance consortium with a vision to bring financial stability, liquidity and accessibility to the mainstream. The Acala Network is a cross-chain finance hub for the Polkadot ecosystem and beyond. It offers a suite of financial primitives: a multi-collateralized stablecoin backed by cross-chain assets like Bitcoin, a trustless staking derivative and a decentralized exchange to unleash liquidity and power financial innovations. It is the go-to open platform for finance-oriented dApps to deploy to using smart contracts or built-in protocols with out-of-box cross-chain capabilities, security and financial optimizations.
About Ren
Ren is an open protocol that enables the permissionless and private transfer of value between any blockchain.
About Laminar
Laminar is a financial institute backed decentralized finance protocol company. It aims to create an open finance platform that will provide better access to trading instruments, and enable developers to build more open financial services. Laminar’s Flow Protocols bring both synthetic assets and margin trading on the blockchain. It helps solve the challenges of opaque pricing and price manipulation in current financial markets, bridges on and off-chain parties, and ultimately boosts on-chain trading liquidity, exposure, and variety.
About Polkawallet
Polkawallet provides one-stop management of cross-chain assets, convenient mortgage and governance as well as holding of private keys. It provides users with more user-friendly and more convenient experience. As the entry to the polkadot network, it provides the users with more intuitive visual data and state change display so as to ensure the users’ right to know and network participation.
