EOSREX with more locked positions than MakerDAO is not enough to announce the future of DeFi

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EOSREX with more locked positions than MakerDAO is not enough to announce the future of DeFi | DeFi Series

李雪婷

2019-06-05 08:22

本文约3843字，阅读全文需要约15分钟

It's just the on-chain reproduction of leasing.

Text | CiCi

Editor | Hao Fangzhou

Produced｜Odaily Research Institute (ID: o-daily)

Editor's note:

Editor's note:On DAppTotal's DeFi Lockup Value Leaderboard, EOS REX squeezed MakerDAO to the second place in more than 20 days. We are naturally curious about the reasons for its rapid increase. Behind this not only involves the operating mechanism of the two major public chain ecologies of EOS and ETH, but also has something to do with the actual needs of the two modes of leasing and lending.

Before understanding EOSREX, let's talk about the resource allocation mechanism of EOS.

EOS system resources are mainly divided into three types: network bandwidth resources (NET), CPU computing resources (CPU), and running memory resources (RAM). NET and CPU are occupying resources and can be released after use. RAM, on the other hand, is a consumable resource that decreases when used up. The acquisition of these three resources requires users to mortgage EOS tokens.

Therefore, EOS users and DApp developers first need to purchase EOS tokens and mortgage them to EOS system accounts to obtain the right to use NET, CPU, and RAM. The more EOS a user holds or pledges, the more resources can be called in the EOS system.

The original intention of the design of the EOS resource system is to realize the optimal allocation of resources and fulfill the promise of "reducing developer costs and making user transactions free" as stated in the white paper.

However, at the end of 2018, the continuous popularity of quiz and game Dapps led to frequent shortages of CPU resources. Under the shortage of resources, a large number of hoarding and speculation appeared in the market, which caused the price of CPU to continue to rise. For a time, ordinary users were unable to perform transfer operations, and even the accounts themselves were deactivated. They needed to be "recharged and restarted", and the EOS network was once paralyzed. At that time, according to DAppTotal's report: "Top 10 guessing games consume 84.15% of the CPU resources of the entire network."

In this context, in order to solve the problem of resource constraints, the REX concept proposed by BM in August 2018 was officially launched in May this year after a series of simplifications and reference to the actual situation of existing EOS CPU leasing.

What exactly is REX?

Essentially,

Essentially,REX is the income model of principal + interest. EOS holders can earn interest here, and Dapp developers can obtain CPU resources at a lower cost without buying EOS.

To make it easier for everyone to understand, we illustrate with an example:

EOS holder: Bob has 1,000 EOS and has no plans to sell it recently. In order to obtain lower-risk interest income, he exchanged the 1,000 EOS into REX tokens. Correspondingly, the resource usage rights of these 1000 EOS can be rented out to others on EOS REX;

EOS resource leasing parties (such as EOS Dapp developers): Alice currently only has 100 EOS, but he needs to use a lot of resources (CPU/NET) to develop Dapp, and needs about 1,000 EOS resource usage rights;

Now Alice has two options to choose from. One is to buy another 900 EOS to get enough 1000 EOS and corresponding resources; or if it is too expensive, go to EOS REX to rent Bob’s 900 EOS resources for 30 days, provided that Lease interest is not high.

After 30 days, Bob gets more than 1000 EOS (principal + interest), and for Alice, she can continue to use resources if she renews the lease.

In addition, the emergence of REX has multiple impacts on the EOS ecosystem and EOS holders:

The first is to improve governance on the EOS chain.

We know that EOS adopts the DPOS consensus mechanism. 21 block producers are elected by EOS holders through voting. As of June 4, less than 300 million EOS had exercised their voting rights, accounting for 28.76% of the total EOS (1.043 billion); more than 50,000 EOS accounts participated in voting, accounting for only 1.15 million EOS accounts 3.33%.

That is to say, EOS votes are dominated by large investors, which obviously lacks universality and incentives for ordinary currency holders.

For this reason, REX has set a hard rule: if EOS holders want to obtain income through REX, they must first vote for the node.

In this way, people are forced to participate in voting in order to pursue profits (locked positions), which can dilute the influence of large EOS users on node elections and enhance the security of the EOS main network.

Secondly, it is to reduce the circulation of EOS.

The more people who participate in REX, the more EOS will be locked, and correspondingly, the less EOS will be in circulation, which will further push up the price of EOS. Of course, the premise for EOS stock holders to consider locking positions is to obtain considerable benefits through REX. Once the income is attractive, external funds may also be attracted by REX and enter the EOS ecosystem.

From the perspective of data, REX has been online for one month, and its development momentum is rapid. According to DAppTotal data, as of June 4, 2019, 21 DeFi projects have locked up a total of US$1.2 billion, of which REX has locked US$630 million, accounting for 53.32%, becoming the DeFi project with the largest amount of lockup; MakerDao Locked up USD 430 million, accounting for 34.62%. Compound locked up USD 28 million, accounting for 2.38%; Dharma, Bancor, Augur, xDai and other DeFi applications accounted for a total of 9.68%.

The emergence of REX has shaken MakerDAO, which has continued to occupy the leading position in DeFi for nearly two years. (More real-time data about REX can also be found on the EOS Authority website）

We have summarized three reasons why REX has become the "dark horse" of DeFi:

1. Provide solutions for the industry. Compared with purchasing EOS, the leaser consumes a small portion of EOS to obtain the required CPU and temporary use rights of EOS, which can save money and resources.

2. Technological innovation. REX uses the Bancor algorithm to construct a series of actions such as storage-transaction-lease-end transaction. Users do not need to calculate the total amount of lease by themselves. The platform automatically calculates according to the real-time EOS/REX conversion ratio, and the logic is simple.

3. Risk management innovation. REX sets certain conditions for both parties to the lease to ensure the validity of the transaction, including that REX holders must participate in super node voting; after purchasing REX, it takes 4 days to unlock and sell REX; REX tokens are only used to determine The accounting unit of the rate of return is not affected by currency price fluctuations.

Although REX has been online for just one month, supporting the financial ecology of EOS on the supply side, the situation on the demand side is not optimistic.

According to the "settings", there are two types of REX users, one is DApp developers, and the other is DApp fanatics. However, judging from the data, the demand of these two types of users for renting CPU/NET is not strong.

The EOS community has implemented several mechanisms to improve CPU leasing. There are many projects that provide CPU leasing in the market, and some EOS wallets and trading platforms (such as Chintai) are also involved. The supply is sufficient, and DApp developers can have more choices.

DApp has not been popular for a long time, and the price of CPU has also dropped to a reasonable level. For a development team with funds in hand, they can directly mortgage resources in the system in exchange for CPU without going through complicated operation procedures.

From the figure above, we can see that the average EOS CPU usage in the past 23 days was around 209.32M, with only occasional peaks reaching 3.09B.

Therefore, from the perspective of supply and demand, EOS resources are currently oversupplied, and with the launch of REX, the supply and demand relationship will be more skewed.

Odaily Research Institute interviewed a number of EOS nodes and DApp project developers, saying that they would not choose to rent resources on REX.

Sun Yushi, co-founder of EOS Beijing, said that EOS nodes themselves do not have that much demand for resources, and the major demand is mainly for DApps. The price of resources is relatively cheap now. Taking CPU as an example, it often spikes in bursts at peak times. When they were doing EOSDOTA, they mortgaged more than 100,000 EOS. Now it is much more stable and the overall price is cheaper.

NEO, the technical director of EOS Joy, said that during the DApp development process, occasionally there will be a huge demand for resources, and when there is not much EOS on hand, he will consider temporarily renting some resources. There are many rental channels, not limited to REX, mainly depends on the price. And because resources are being restored all the time, CPU starvation only happens when you're consuming faster than you can restore them. In addition, because Snake is played every 3 minutes, compared with games like DICE, the CPU resource overhead per unit time is very small.

At present, there are not many DApp fanatics in the market. Although the number of DApps on EOS has grown, the largest DApps are mostly guessing games (the gap between real active users and superficial data must also be considered).

Gao Feng, the head of Meet.one, told Odaily Research Institute that the CPU is basically enough for the project parties developing DApps on EOS. Moreover, the development of DApp mainly occupies RAM, and the CPU is borne by users (ie players). Meet.one currently does not rent CPU, and can mortgage enough EOS to resource leasers.

Website Statistics According to Spiderstore Data, as of June 4, the 24-hour active users of DApps on EOS were 112,310. As shown in the figure above, only 4,969 accounts rent CPUs, indicating that there is still a lot of room for improvement on the demand side.

Standing higher, does the rise of REX mean that EOS is the most suitable public chain for DeFi?

The answer is not necessarily.

Currently, the DeFi market is divided between ETH and EOS.

Although, the unique resource usage mechanism and the innovation of the Bancer protocol endow EOS with inherent advantages. But in terms of development maturity, Ethereum still hosts the most valuable assets and has higher liquidity.

At the same time, the security performance of EOS has also been criticized. According to the statistics of the blockchain security company PeckShield, as of December 26, 2018, a total of 45 DApp security incidents occurred in the EOS ecosystem, with a total loss of nearly 740,000 EOS. Odaily Research Institute has analyzed security incident attack methods mainly include random number cracking, smart contract vulnerabilities, and the use of controllable random number seeds. These hidden dangers obviously limit the development of REX. After all, REX's fund pool stores a large amount of EOS, which will become the target of hackers.

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