Produced | Odaily

Produced | Odaily

Yesterday morning, "Reconstructing the Internet, Sodium is Different——DFINITY Sodium China Online Launch Conference" was officially held.

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The first roundtable forum, hosted by Odaily founder and CEO Mandy Wang Mengdie, invited four guests: Fenbushi Capital Partner Remington Ong, Polychain Capital Founder and CEO Olaf Carlson-Wee, Binance Investment Vice President Zhang Ling And Dominic Williams, the founder and chief scientist of DFINITY, discussed "the new ecology of the token economy, how Internet computers can lead the great revolution of DeFi".

Olaf Carlson-Wee said that DeFi needs to get out of the small circle and be understood by more people. "For those who want to launch various types of financial applications on the platform, the DeFi platform foundation has insufficient scalability; for developers, it is becoming more and more difficult to attract new applications with the help of the platform." People, users who want to interact with those applications have to pay higher fees. The second thing that hinders the development of DeFi is that now the market challenge is to let more people understand DeFi, we have used DApp or The term decentralized application, but in today’s crypto world, we’re already talking about DeFi.”

Zhang Ling believes that the current progress of DeFi is slow. I think there are several reasons: first, the lack of correct understanding and education on DeFi; Easy to master the introduction of DeFi; third, decentralization and autonomy is a double-edged sword, and a high degree of decentralization has also led to insufficient management and development sustainability of many projects, so it is necessary to strengthen the control of project quality. "Defi has a long way to go to build a healthier and more benign ecology on the road to a truly decentralized world"

Dominic said that DFINITY "Internet Computer" would be an excellent choice for DeFi. "1. Leave the right of independent choice to entrepreneurs and developers to decide where they want to do DeFi development, and Internet computers can simplify the user-side experience, and users do not need to manage wallets, tokens, etc. by themselves, so The user experience is very good; 2. Stable currency cycles are designed, which greatly reduces the volatility of cryptocurrencies; 3. Internet computers can make the systems created by people expand well, the cost is very low, and they are very reliable and have high performance. This all makes Internet Computers a great option for DeFi."

At present, in addition to DFINITY, many public chains including Binance Smart Chain are focusing on the concept of high performance and scalability. But we also see that developers and participants do not seem to have completely migrated from the "old" Ethereum. Why?

Remington Ong believes that the developer community is the key to the development of the blockchain network, and the network effect is strong, because developers have accumulated a certain amount of development tools, APIs, node facilities and other resources on the existing platform. If you want to convince application developers to abandon the existing development environment and develop applications based on the new bottom layer, the performance of the new bottom layer must be improved by more than ten times, or even a hundred times, or similar to the level of transfer from desktop computers to mobile phones. disruptive changes.

The following are round table forum speeches, organized by Odaily

Mandy: First of all, please introduce yourself briefly.

Dominic Williams：Hi everyone, I'm Dominic Williams, founder of DFINITY. DFINITY is a decentralized computing platform born in 2015, dedicated to building the world's "Internet computer". Recently, we also released the Network Nervous System (NNS), which is an open algorithmic governance system that controls the DFINITY network and acts as its brain. We also welcome your support.

Olaf：Hello everyone, I am Olaf Carlson-Wee, founder and CEO of Polychain Capital, an investment institution focused on the cryptocurrency industry.

Zhang Ling：Hello everyone, I'm Zhang Ling, and I'm currently in charge of Binance's investment. I'm very happy to participate in this forum.

Remington Ong: secondary title

Q1

Mandy: DeFi has ignited the entire encryption market this summer, and multiple dimensions such as the amount of locked positions on the chain, DEX transaction volume, and the market value of DeFi tokens have all increased by orders of magnitude. However, participants and developers also reported that there are many problems in DeFi, such as high transaction fees on the chain and network congestion. In your opinion, what are the difficulties in the current development of DeFi? Why do these problems occur?

Olaf：I think DeFi has touched many aspects of the cryptocurrency industry today.

For those who want to launch various types of financial applications on the platform, the foundation of the DeFi platform has insufficient scalability; for developers, it is becoming increasingly difficult for developers to create new applications with the help of the platform ; Users who want to interact with those applications also have to pay a higher fee.

In addition, the current market challenge is to let more people understand DeFi. We used to use the term DApp or Decentralized Application, but in today’s crypto world, we’ve started talking about DeFi.

I think one of the main reasons the market has changed is that these foundational platforms today can deliver image, text, and video content to the end user, so it doesn't feel like a web application, and people get the right user experience, instead Not just a person who uses financial products.

Therefore, I think this will be a good start, and will also catalyze and promote the development of DeFi. At the same time, I also think that developers will expand the scope of the types of decentralized applications built, and this will definitely be done in the future.

Dominic Williams：One of the advantages of the Internet computer is that it has unlimited capacity, and the cost of conducting transactions on it is very low, as long as a penny per transaction, while it can be as high as $50 per transaction on Ethereum.

Therefore, blockchain DeFi can learn from the user experience of the Internet and the underlying financial logic of traditional finance to achieve development.

I think that in the next ten years, DeFi will gradually replace traditional finance. The scale of DeFi will catch up with the scale of traditional finance, or even larger.

Remington Ong：I agree with the speeches of the previous two guests, but I would also like to add two more points.

First, when we talk about high fees, we don't just mean actual transaction fees, but also the running costs of some kind of complex code. With the current blockchain, even running simple logic, the running cost is very high. I think something like an "internet computer" will enable more complex applications.

Second is user experience. Although DeFi has received a lot of attention this year, some research data also show that its influence on the population is still limited, and it has not really reached a large-scale user group. One of the reasons is that the user experience is too complicated. If you have a complete set of development tools that allow any developer to build an excellent user interface that users are familiar with and easy to use, such a decentralized application does not have a high threshold, even groups like my parents can use.

Zhang Ling：Regarding the long-term development of DeFi, I have a different point of view. I think that DeFi and CeFi will coexist for a long time. At least in the near future, DeFi will not replace CeFi. But together with Cefi, DeFi and Cefi will jointly shape a new form of finance, fundamentally changing people's cognition and application of finance.

At present, DeFi is progressing slowly. I think there are several reasons:

One is the lack of correct understanding and education of DeFi. Many novices enter DeFi because they are lured into it by high returns such as liquidity mining, and their understanding of DeFi is still relatively one-sided.

The second is that the threshold of DeFi is relatively high. The entry process is too complicated, and many users who are accustomed to the CeFi experience find it difficult to adapt to DeFi. Fortunately, many projects we have seen so far are trying to solve this problem.

The third is that DeFi needs to strengthen quality control. Decentralized autonomy is a double-edged sword, especially the nature of decentralization, which brings many difficulties to project management and supervision. This has led to insufficient sustainable development of many projects, and many projects have quickly absorbed traffic and died quickly.

secondary title

Q2

Mandy: I ​​would like to ask Dominic and Olaf, an investor of DFINITY, the following question. At present, most DeFi projects are still concentrated on Ethereum, and its scalability and speed form constraints on DeFi. DFINITY focuses on high-performance technology, and has also launched its own flagship product "Internet Computer". What can Internet computers do? What are the application prospects in the DeFi field? What problems can be solved?

Olaf：DeFi will definitely attract a large number of users, and for me personally, the goal of DFINITY makes me feel that it is not limited to narrow competition.

In fact, we need to expand the reach of businesses as much as possible so that developers can build applications, and the concept of an "internet computer" that DFINITY has built enables this like never before.

It’s very much like going back to 2015, when there were a lot of cryptocurrency projects, but without really trying to compete with Bitcoin, these cryptocurrencies expanded the sphere of influence of cryptocurrencies.

In my opinion, DFINITY helps expand what is possible in the blockchain space. Many new applications can achieve unprecedented development in the larger monetary environment.

But today, you have DAO (Decentralized Autonomous Organization) models of on-chain governance structures that have substantially more complex application logic.

So I think the future is not just about lending financial services or decentralized exchanges, but also structures like DAOs, and ultimately a web application-like experience. These things, like social media networks, are hosted on end platforms with blockchain-based ownership structures behind them. It is the emergence of DFINITY "Internet Computer" that makes new business and technology suites possible.

Dominic Williams : Internet computers can solve many problems. First, we leave the right of independent choice to entrepreneurs and developers to decide where they want to do DeFi development. Moreover, Internet computers can simplify the user-side experience and do not require users to manage wallets, tokens, etc., so the user experience is very good. Second, we have designed stablecoin cycles, which greatly reduces the volatility of cryptocurrencies; third, Internet computers allow people to create systems that are well scalable, low-cost, very reliable, and have high performance, all of which make Internet computers have become a great choice for DeFi.

Also, we put a lot of effort into designing our token economy.

In simple terms, when the Internet Computer launches, the network will be governed by ICP tokens (formerly known as DFN). ICP tokens will be used in two ways: ICP token and cycles.

First, ICP tokens will be used to create new "cycles," the fuel that runs software on computers on the Internet, and these cycles will disappear after being used for computing. ICP tokens can be purchased on financial markets to create cycles and be consumed, which in turn leads to a decrease in their supply. The entire process is deflationary and balanced in this way, since spent ICP tokens disappear and cycles are consumed when users use them to fuel the software.

Second, ICP tokens can be used to participate in governance. The Internet computer network is controlled by an algorithmic control system called the Network Nervous System (NNS), and ICP token holders can lock their tokens within the Network Nervous System to create "neurons" that allow them to influence network operations vote on proposals and receive additional ICP tokens as voting rewards - we hope project supporters will benefit from long-term holdings.

secondary title

Q3

Mandy: I ​​would like to ask Zhang Ling and Remington the next question. At present, in addition to DFINITY, many public chains including Binance Smart Chain are focusing on the concept of high performance and scalability. But we also see that developers and participants do not seem to have completely migrated from the "old" Ethereum. Why? In addition to strong technology, you have invested in many public chains. What actions should other public chains take to find their own unique positioning?

Zhang Ling：I disagree slightly (developers nostalgic trend). Take the Binance Smart Chain as an example. Binance launched the Binance Smart Chain (BSC) in early September, and achieved significant growth in the first month of its launch. At present, there are more than 30 DeFi projects developed on it, more than 108k addresses have been created, and assets have exceeded 650 million US dollars. The transaction volume on BSC is roughly equivalent to 20% of that of Ethereum. This is only the result we have achieved in the first month.

The network effect of Ethereum is very attractive to developers, and therefore, ecological support is particularly critical for promoting developers to develop on new or early-stage public chains. For example, the Ethereum Foundation grants to Ethereum developers (Grants). Based on this, Binance also provides corresponding ecological support for early developers who choose to develop on Binance Smart Chain, such as BSC's seed fund, Binance Labs' investment, etc.

Remington Ong：The developer community is the key to the development of the blockchain network, and the network effect is strong, because developers have accumulated a certain amount of development tools, APIs, node facilities and other resources on the existing platform.

If you want to convince application developers to abandon the existing development environment and develop applications based on the new bottom layer, the performance of the new bottom layer must be improved by more than ten times, or even a hundred times, or similar to the level of transfer from desktop computers to mobile phones. disruptive changes.

secondary title

Q4

Mandy: In the past few years, the concept of token economy has been repeatedly mentioned, but related practices including STO have not caused much waves. What do you think is the value of token economy in the post-DeFi era? How can the token economy really play a long-term role in the ecological governance of the project?

Zhang Ling：I think the token economy is a great innovation for building a truly decentralized ecosystem, which greatly promotes the free flow of value. From the perspective of the project party, it fundamentally changes the way the project party seeks financial support and obtains early support in the early stage of project development, breaks the traditional geographical boundaries, and enables the project to obtain funds from different sources around the world at an early stage. The attention and support of supporters in the Tai area. From the user's point of view, it changes the way users participate in project ownership and management supervision in the early stages of the project. From simple financial support to deep governance participation. However, the current token economy is still in the stage of continuous evolution. To enter the next stage, some problems need to be solved urgently:

The first is a more scientific token economic design. Judging from many current projects, the design of the token economy is still relatively short-term, generally taking two to four years as the initial cycle, lacking long-term design and persistence in the token economy.

The second is that the use scenarios of tokens are very limited. The most common application of most tokens is the transaction itself. It has not been further implemented in the real world, nor has it created more value and scenarios.

Third, in order to maintain the sustainable development of the token economy, a more benign and reasonable governance model is needed. The governance method and concept should be gradually iterated with the different stages of project development. MakerDAO is a good example.

Remington Ong：To put it simply, the token economy is the use of tokens to incentivize certain behaviors. In fact, the simplest form of token economy is Bitcoin mining. In the past 10 years, many people have been encouraged to run mining machines 24 hours a day to maintain the security of the Bitcoin network, so it has been proved that the token economy is feasible. In addition, some projects have also succeeded in incentivizing some short-term behaviors, such as motivating users to lock up funds through liquidity mining in order to provide liquidity on certain platforms, but because of the design of the token economy, a But when the incentive is over, the liquidity disappears immediately.

Currently, there are also many interesting tokenonomic trends. The first is about how to design the token economy to incentivize some behaviors that are beneficial to the platform in the longer term. The second is about how to stimulate other types of behaviors through the token economy, such as encouraging users to use a certain APP or create high-quality content on social media.

And one of the key things about governance is that people are incentivized to vote and participate. As Dominic said earlier, allowing tokens to participate in voting automatically means that people can participate in network governance without effort.

Olaf：I think there are currently two breakthroughs in the token economy.

The first breakthrough is to give tokens real ownership. In the past, we have always been confused, why everyone buys Bitcoin, and why does the encrypted economy become so valuable? This is hard to answer, usually the explanation is the consensus, but it sounds false.

Now, we see Compound governance token COMP, MakerDAO’s token MKR, this type of token allows you to become a partial owner of an application or financial service on the chain, representing its ownership and governance rights.

So you hold these tokens and it feels like you're becoming a shareholder in a for-profit company, but actually the business itself is all on-chain, as is the economic structure, the form of capital, and the management.

Therefore, I think this is the first layer of breakthrough. On the basis of generating real income, tokens are given real ownership in business processes or business logic.

The second breakthrough is to increase the value of the basic tokens and transfer profits to users.

If you pay attention to some DeFi platforms, you will find that tokens and smart contracts will eventually have a certain abstraction or parasitic nature, so they will not actually drive the demand for native assets. In the short term, tokens and smart contracts will require DeFi users to pay a large amount of gas fees. As a result, funds will flow directly to miners, so these miners are the biggest beneficiaries in the DeFi system. In the end, you may have some ether speculators harvesting system value.

But we've also seen platforms like DFINITY design more complex cryptoeconomics, the more activity on the system -- like every time a developer rolls out a smart contract or launches a new token -- the underlying token holds Those who have will benefit more.

In effect, the DFINITY platform is increasing the value of the underlying token more directly in a way that is not purely speculative (which is theoretically forbidden).

These are the two key breakthrough points in my mind based on the design of the encrypted economy.