Robert C. Merton, the winner of the Nobel Prize in Economics, said in a public speech that the world today is experiencing a new wave of financial innovation, among which new payments and cryptocurrencies have attracted much attention, and derivatives are the backbone of financial innovation Power has always attracted the attention and favor of investors. Among them, the volume of derivatives in the traditional financial field is usually 40-60 times that of the spot market, and the derivatives in the encrypted market only account for 40.32% of the overall market. This huge potential market has attracted top capitals such as Polychain and Pantera in the circle.
Polkadot is currently one of the largest PoS blockchains with a market value of $30 billion+. As of March 2, about 63% of DOTs are pledged in the network. It requires not only a sound DeFi infrastructure, but also high liquidity sexual derivatives. Acala, as the Polkadot ecological DeFi center, not only has basic decentralized financial products, such as stable coins and DEX for over-collateralized loans, but also has a very distinctive Staking derivative service (Homa protocol), which releases asset liquidity on the chain At the same time, it also makes DeFi gameplay more diverse. Acala's addition of Staking economy to DeFi will also become an emerging programmable innovation paradigm, sparking more different sparks.
Polkadot uses NPoS (Nominated Proof of Stake) as the mechanism for selecting the validator's battery, and sets up two roles of validator and nominator in the network to maximize the security of the chain. The Polkadot network encourages DOT holders to participate as nominators. Validators, as the role of producing new blocks in the network and verifying the operation and maintenance of parallel chain blocks, can be selected by nominators. Each nominator can freely choose to support multiple verification people. The Polkadot Staking system will reward all validators equally, and after deducting the validator's own assets, it will be distributed to nominators in proportion. Therefore, the nominator will choose a validator with a relatively low Stake in order to obtain a relatively large amount of rewards during distribution. This mechanism will also make the DOT/KSM supported by the validator as evenly distributed as possible, creating an equal Stake validator node pool.
Polkadot Staking Economic Mechanism
Polkadot uses NPoS (Nominated Proof of Stake) as the mechanism for selecting the validator's battery, and sets up two roles of validator and nominator in the network to maximize the security of the chain. The Polkadot network encourages DOT holders to participate as nominators. Validators, as the role of producing new blocks in the network and verifying the operation and maintenance of parallel chain blocks, can be selected by nominators. Each nominator can freely choose to support multiple verification people. The Polkadot Staking system will reward all validators equally, and after deducting the validator's own assets, it will be distributed to nominators in proportion. Therefore, the nominator will choose a validator with a relatively low Stake in order to obtain a relatively large amount of rewards during distribution. This mechanism will also make the DOT/KSM supported by the validator as evenly distributed as possible, creating an equal Stake validator node pool.
secondary title
Acala Staking Derivatives Homa Financial Protocol
Although the centralized development of the Matthew Effect has been avoided, the dilemma still exists objectively.
The biggest contradiction lies in the contradiction between network security and DOT/KSM liquidity. With the continuous development of the network, the price of the secondary market fluctuates 7*24 hours. During the staking period, users will lose part of their income if they unlock in advance. However, too few or too concentrated pledged assets will affect network security. DOT/KSM liquidity has become an urgent problem to be solved. The problem.
The Acala Staking service Homa financial protocol strips off the right to use the network and the right to earn money, and uses the native application services on the Polkadot chain to solve this dilemma. DOT/KSM holders can obtain the liquidity of pledged DOT/KSM through the Homa agreement. After depositing DOT/KSM, they will be transferred to the parachain fund pool. The parachain will nominate DOT/KSM verifiers through on-chain governance.
As shown in the figure, taking the Mandala test network as an example, assuming that the ratio of DOT to LDOT in the current pool is 1:8, then the user deposits 10 DOTs in the Homa protocol, and the parachain address will give the user 80 L-DOT as the only Income certificate, L-DOT can be understood as a bond certificate. Assuming that the Homa income pool obtains 10 DOTs for Staking at this time, then when the user uses 80 L-DOTs to retrieve DOTs, he will get 10.01 DOTs according to the weight, of which 0.01 DOT is Earnings during the pledge period. (Acala Pioneer Network Karura will give L-KSM as the only certificate) L-DOT will be used as a freely circulating asset and can be traded in Acala DEX or other markets at any time, which also solves the problem of the liquidity of pledged assets.
Among them, the DOT/KSM deposited by the user will enter the Homa income pool, most of the DOT/KSM in the Homa income pool will be bound to the validator node, a small part will be used by the user at any time, and the other part will be in the solution Binding cycle. In addition, assuming that the current exchange ratio between L-DOT and DOT is 10:1, when redeeming DOT, 10.01 DOT will be obtained after adding the Staking income minus the handling fee.
Homa Protocol On-Chain Governance
Homa Protocol On-Chain Governance
In addition to being free to flow, L-DOT will also become an asset certificate for participating in chain governance in the Homa committee. Homa committee members are elected by ACA holders and processed by the same Phragmén election process. After putting inactive and passive node roles into the validator's blacklist, they are held by L-DOT in all Polkadot validator available pools People voted to select 16 validators. In the future, with the continuous development of the network, the number of nominated validators will be gradually increased through proxy accounts.
Why use the Homa Protocol
Why use the Homa Protocol
The basic protocol + staking derivatives protocol model provided by Acala will greatly improve the poor trading experience and insufficient liquidity of traditional DeFi, and will also achieve:
Trust-less: As a decentralized financial service platform, Staking derivatives through smart contracts release liquidity while abandoning the asset operation mode of the previous centralized derivatives market. It is a Trust-less pledged derivative based entirely on substrate.
Liquidity of Staked DOT: Staking derivatives will become the financial market for emerging blockchain bonds. The increase in Polkadot's parallel chains and scenarios will bring new traffic and users.
Best equal distribution across validators to achieve best block reward: After the introduction of on-chain governance, the community will jointly select the best validator node, instead of the previous single management and maintenance method, to help obtain more block rewards.
Facing the risks and uncertainties of the financial market in the secondary market, Acala, as the DeFi center of the Polkadot ecosystem, has also introduced the AMM model and income farming gameplay, which will bring more combined income to users through loans and synthetic assets with Acala Chance. Imagine that in the future, the L-DOT obtained by putting DOT into the Homa protocol on Acala can also be integrated into various DeFi applications of Acala. I believe this will greatly satisfy the high liquidity and high utilization rate of Polkadot ecological users. demand.
