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, Author: Minako Kojima, reproduced by Odaily with authorization.

Although the US Securities Regulatory Commission (SEC) once considered Ethereum not a security in a report in June 2018, relevant debates still often occur in the community, especially on the eve of the bull market. To some extent, what the SEC said is of course correct. Ethereum is naturally not a security in the traditional sense (this is also beneficial to her development), but it must contain certain security attributes.

In fact, for most cryptocurrencies (Crypto), they all have three attributes: commodities, shares, and currencies. The complexity lies in the fact that the attributes of each token are not the same. The attributes are not the same, and even the attributes shown in different environments are not the same.Further reading: "》

In order to better understand the "wave-particle duality" in cryptocurrencies, let's take readers to analyze the two main profit sharing algorithms, one from P3D, matured in various popular liquidity mining projects, and the other is dividends from Uniswap, Rex and yToken. The biggest difference between these two algorithms is that the latter will reinvest the profits generated during the user’s staking period.

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From Ponzi Token to P3D to UnipoolShockingly, the history of the application of divisible tokens is later than that of automated market makers. In June 2017, Professor Jochen Hoenicke, head of the software engineering department at Albert-Ludwigs University, published an articleinformal blog post

, to introduce a new Ponzi Token designed by myself. Simply put, this Ponzi Token is issued using the Bancor algorithm with 80% of the reserve fund, and uses an O(1) time real-time profit sharing algorithm, while the contract Profit comes from the transaction fees generated by users in Bancor.

Archaeological site -> Ropsten 0x2CB6ef99FbC78069364144E969a9A6e89E55035

However, since Professor Jochen Hoenicke is not an expert in contract development, there are many bugs in the original code. Someone directly deployed the above contract to the main network, resulting in at least 2000 ETH being hacked. Later, this mechanism was simplified and promoted, and was applied to the Powh project. The Powh project used Bancor with a 50% reserve rate, so the Bounding Curve is a slash, which is easier to calculate in the contract, and only needs to use a quadratic equation It is enough to seek the root consensus. Later, Powh Shadow Fork with higher fees appeared. These two projects were also attacked by hackers one after another. One month later, they were upgraded to P3D as we know it today.

—— Out of curiosity, I joined their discord group and took a look. Sure enough, it was in full swing. Because of the existence of brother 232, everyone seems not so sad. And soon someone discovered that the programmer himself threw 15ETH into it. It's even more fun. The currency circle is really optimistic and positive.

P3D is actually a milestone project in the history of Ethereum development. The reason is that the profits of all previous Ponzi projects come from this inner loop. Various zero-sum games are carried out among the contract participants, and the profit of P3D It comes from externalities, from "P3D ecology", which includes the famous Fomo3D. Therefore, what P3D Token represents is more like the equity of the development team. When the team works closely together and maintains a high degree of creativity, people's expectations for P3D will rise. However, the P3D development team did not make any promises to P3D holders, so the team was disbanded later, and some personnel migrated to TRON. Team Just, which migrated to TRON, also lost the vigor of the past. This is something.

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Later, this algorithm was used in Synthetix's Unipool to distribute project tokens and encourage users to provide LP. This is also the prototype of the liquidity mining algorithm used by almost all projects now.

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EOS CPU Bank and Rex

As we mentioned earlier, compared with the previous Ponzi Tokens, the biggest significance of P3D is that it makes the assets on the blockchain have externalities, so that it is no longer just a zero-sum game. The concept of "holding currency to earn interest" first appeared on EOS. Because of EOS's special CPU mechanism, users can lease EOS from the contract to obtain CPU when the EOS collateral is insufficient. When Dapps become popular, CPU costs rise and the demand for leasing is strong. , leading to the emergence of CPU banks, the representative of which is EOS Bank, the emergence of CPU banks, the first time that the original assets of the blockchain have the function of generating interest on the chain, and the popularity of similar things on Ethereum is still after the emergence of Compound. up.Later, BM proposed an official CPU Bank

, and then named it - Rex (Resource Exchange), and it was deployed and launched half a year later. This is the origin of Rex, the largest official DeFi project on EOS. Rex tokens are obtained by users staking EOS, and the price of Rex increases monotonically with the increase of income dividends.

#DeFi on #EOS: RAM market, Name auctions, Resource Lending exchange and that’s just the built in defi apps. I strongly support adding token symbol auctions and native support for issuing tokens without deploying native contract.

SourceTwitter

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Uniswap and yToken

Token dividends have actually existed since the birth of the blockchain. The mining fees of Bitcoin, the gas consumption of Ethereum, and even the profits of exchanges to repurchase platform tokens and destroy them can actually be regarded as a kind of dividends. Dividends do not necessarily need to be the same as the above. Every time the profit is sent to the user, as long as the value of the unit stock rises, the above-mentioned destruction is one way.

Another model of divisible tokens is the LP Token in Uniswap. For each trading pair, the Uniswap contract will issue the corresponding LP Token to the liquidity provider, and the LP Token will be used by the liquidity provider to redeem the principal in the future. Voucher, when the transaction generates a handling fee, the handling fee will be automatically transferred to the Pool. If the price remains unchanged at this time, it is equivalent to an increase in the principal that can be redeemed per unit LP Token. This method is used to complete dividends.

Among them, the price of divisible tokens is monotonically increasing compared with the collateral. The increased price is the profit generated by the contract. LP Token may be more complicated, and the collateral can be regarded as the target transaction pair. There are two types of synthetic assets formed in Uniswap, and it may be more complicated in Balancer and Curve, and the impermanent losses generated during transactions must also be considered.

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Comparison of Two Algorithms

• So in general we seem to have two algorithms for making divisible tokens.

• The first mechanism is the classic divisible token mechanism of P3D and Unipool. The method is to maintain a monotonically increasing profitPerShare, and then each account records the profitPerShare at the last profit sharing moment. This method is the most intuitive and is easily recognized by users. perception.

Of course, strictly speaking, the repurchase and destruction mentioned above is also a feasible mechanism, which is common in most exchanges and platform coins of project parties. Due to the gradual improvement of decentralized exchanges, this measure can now be automatically executed in contracts, such as YFII, but the disadvantage is that although it is a form of profit sharing in theory, it is closely integrated with market dynamics and is not intuitive enough , and easy to be front-running. In a broad sense, Bitcoin's miner fees and Ethereum's gas fees also belong to this mechanism, but this part of the profits is returned to the system to pay wages to the "enterprise" of Bitcoin.

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