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Chain News ChainNews (ID: chainnewscom)

Chain News ChainNews (ID: chainnewscom)

• , Author: Andre Cronje, founder of yearn.finance, Compiler: Perry Wang, published with authorization.

• In a world where decentralized finance is not made up of corporate structures, what do the terms M&A, alliances and partnerships mean, and what can we learn from our interactions so far?

• Let's start with the term definitions:

• Merger: The merging of two entities, especially a corporation, into one.

Acquisition: An asset or subject is purchased or acquired.

Alliance: Two or more entities form an alliance partnership.

• Collaboration: The act of joining forces to create something.

• All of the interesting definitional descriptions above point to ownership in some way. What does ownership mean in a decentralized ecosystem?

• Take Ethereum as an example, who owns Ethereum? Take a look at the participants:

• Miners (they decide whether software upgrades or not)

• Developers (they build software for miners to use)

ETH holders (they are users of the system, but do not drive choice)

Founder Vitalik (absolute thought leader)

Ethereum Foundation (they help fund the ecosystem, but how much say do they have?)

It's hard to determine who owns Ethereum, isn't it? But I'm personally inclined to say that the combination of developers and miners is the real master. Now let's look at how Yearn interacts with Ethereum.

Pickle

Yearn is built on top of Ethereum, so that means combining two things. Yearn has a connection to Ethereum, yearn and Ethereum work together to produce something. Yearn and Ethereum could be a partnership, an alliance, or, to a lesser extent, a merger. Why is it considered a merger relationship? Just because ethereum developers build is not driving yearn, and yearn builders have no influence over miners.

Now let's look at the governance protocol. Governance can be seen as miners, who decide whether to upgrade the protocol. But what if the agreement doesn't change in any fundamental way?

Cream

Let's look at a recent merger as a case study.

There is a high level of developer agreement between Pickle and Yearn. Both teams are working on farming yield strategies. Often the same strategy is used, so development is duplicative. From a development team integration perspective, the merging of the two protocols is logical. Pickle core developers can focus on policy, and Yearn provides additional security, peer review, audits, and discussions. The two development teams merged. Now we share the same groups, integrate the same discussions, and focus on bringing the ecosystem together stronger. Pickle and Yearn remain separate brands, but development resources have been consolidated.

Talent merged.

Cover

Strong synergy with Yearn. Yield farming and Money Markets work well together. Currency leverage can be used to increase yield farming. Currency markets are inherently leveraged. But there are often differences in vision between the two entities. We have seen that currency markets often have completely different target client groups. Protocols such as Aave and Compound could be called lending marketplaces that focus on providing lending products to end users. And the DyDx protocol also offers loans, but for the purpose of leveraged trading, so although they are a currency market, the core interest is to allow users to use this market to trade. Synthetix can also be seen as a lending marketplace, but with a core driver of synthetic assets. Alpha Homora is a lending marketplace, but with a focus on leveraged returns. And all of these are lending markets.

• While development teams do merge and leverage each other, this type is best categorized as two teams working together looking to achieve a common goal of protocol reservations, protocol-to-protocol reservation services, reducing the The role of the loan provider. This design helps other protocols such as Aave, Compound, DyDx, Synthetix, and Alpha Homora get more funding without limiting their resources. The focus is on improving capital efficiency rather than targeting the traditional lending market.

• So let's classify the integration with Cream as a partnership and an alliance. This is true even when development teams do merge.

• For the insurance agreement Cover, I would like to conclude that there are four areas of focus;

• Core insurance products, fixed-term products denominated in stablecoins, linked to a series of agreements (specifically variable).

A protocol prediction market that predicts the perceived risk that a protocol could be exploited.

Insurance as a service, offering any token to be the backing of its own ecosystem, allowing tokens to mimic the products in 1 and 3, with its own token as a catalyst.

in conclusion

While Yearn provides security, review and audit channels for all 4 projects mentioned above, it is particularly focused on the cooperation of 3 and 4, because 4 makes YFI its own insurance ecosystem, and 3 makes Smart Pool get the fee from the proceeds. Insurance, no need to occupy users' fees in advance. Returns are reduced, but risks are hedged.

The same is true for the cooperation with Cream, which is closer to the consistency of goals and results, sharing development resources.