There may be tens of millions of cryptocurrency holders, but less than a million people actually play DeFi. How can this penetration rate of less than 10% be improved?
Cook Protocol (Cook Protocol), a team member born out of start-up projects of Google, Fidelity and other companies, thought of using the familiar fund form to solve the problems of DeFi not being able to play and new project research thresholds for beginners. The solution is to provide various funds for it.
Where do these fund managers come from? It may be a "scientist (DeFi high-level player)" who is playing dozens of platforms at the same time, or it may be a professional trader, or even a senior investor who believes in value investment.
By creating decentralized funds, these fund managers can not only effectively manage their own investment portfolios, but also open up to receive commissions and a sense of accomplishment. And novice investors can "free ride" and invest in this high-risk and high-reward industry in a more professional form.
March 10,Cook Protocol Announces DuckDAO Investment. March 17,Cook received another strategic investment from Block Dream Fund, an investment institution under OKEx, and become a member of its ecosystem. It is understood that financing funds will be used to accelerate product development. Odaily learned that the project will conduct IDO on DuckDAO and Poolz in the near future, and start liquidity mining. If you want to participate, you may wish to follow us to learn about this project.
01 Pain points that Cook Protocol wants to solve
Blockchain technology is the first to be applied in the financial field. Compared with traditional finance, this technology brings a complete paradigm shift, gradually replacing centralized finance with decentralized open finance.
This substitution has actually happened in human-machine transactions, lending, mortgage bonds, etc. In more fields, there are still some aspirants working hard to develop a solution that is completely different from traditional finance. For example, the Cook Protocol, a decentralized fund platform we are going to talk about today.
According to Cook CSO Kun, the name of Cook originated from Captian Cook (Captain Cook), a well-known British navigator in the 18th world. At that time, the New World was gradually connected and ocean commerce was in the ascendant. Employed by others, they carried out activities such as long-distance shipping, herring fishing, whaling and colonial trade.
The high risk and high rate of return of the spice trade made the government and the consortium begin to release investment, thus giving birth to the East India Company, the world's first joint-stock company with equity financing, and opened up the financial revolution. prologue.
So far, the financial system that has been developed for more than 400 years has matured, but it is also quite large, cumbersome, inefficient, and difficult to inclusive.
The following mechanical device is often used by people as an analogy to financial facilities, which means that it is cumbersome and inefficient.
As mankind enters the information revolution, finance is also undergoing profound changes. In 2013-2014, when the mobile Internet was just emerging, many people could not imagine that cash would disappear from our lives, but the world would change a year or two later. Now, the open financial solution brought by DeFi is likely to bring us greater innovation.
"For Cook, we will be like Captain Cook who pioneered the financial market. The long-term vision is to provide a solution for decentralized fund raising and management. The current traditional financial system is still stable on the surface. But the process of penetration will be gradual, and we will be the first navigators to embrace the blockchain and DeFi.” Kun believes.
In this gradual process, in the short term, Cook will provide crypto investors withDiversified and decentralized fund platformstart.
Cook targets two groups of people, novice investors and professional traders.
For novice investors, the problem they are currently facing is that the current DeFi operation interface is still relatively "punk", there is not enough functional packaging for fools, and various interactions are relatively primitive. Secondly, in addition to English-speaking countries, people from other language regions in the world (such as a large number of Chinese investors) are faced with language barriers and other problems. Furthermore, the transaction fee for a transfer is easily 400-600 yuan, which is a bit unbearable for "Xiaosan". From this, it is conceivable that for novice investors, the threshold for screening projects and practical operations is relatively high, which also brings constraints to the scale and expansion of the industry.
For professional "scientists (DeFi high-players)", after playing on enough platforms, they also need a platform that can realize investment portfolios in one stop.
This is the problem Cook wants to solve -One-stop asset management, the front-end is user-friendly, as simple and easy to understand as traditional Internet products, and the back-end uses a common technical architecture to link major DeFi products, including transactions, loans, and income.
Some friends may have doubts when they see this. Isn’t this what income aggregators such as yearn.finance (YFI) do?
In this regard, Kun believes that revenue aggregator products such as YFI usually have a clear positioning (such as an efficient machine gun pool) and a single strategy. Cook is a platform for formulating and executing strategies. It can not only provide YFI-like mining products, but also allow community professionals to customize strategies and raise funds for their funds for everyone.
To sum up, Cook will make a more complex and flexible DeFi Lego. Here, professional DeFi traders or investment novices can obtain personalized investment allocation tools or investment targets.
What Cook wants to do also reminds me of the track of "smart investment advice". Regarding the difference between the two, Kun said that many robo-advisory products only provide investment advice, or operate a few investment portfolios according to strategies. In comparison, Cook, which is positioned as a decentralized fund investment platform, will have a wider coverage .
When talking about the space of this emerging market, Kun believes that it can be calculated by analogy with the traditional fund industry, such as dividing the market size of stock fund companies by the market size of the entire stock industry, and the share of stock funds can be obtained ( permeability). Similarly, Kun believes that the imagination space of decentralized fund management platforms is equal to the management scale of these platforms divided by the entire crypto market. Molecule is a fund platform, and it is still in the stage of infrastructure construction, and there is still a lot of room for development; while the cryptocurrency market is currently only a little over 1 trillion US dollars, compared with the scale of hundreds of trillions of stocks, bonds and derivatives markets, There is also a lot of room for expansion.
It is precisely because of the gap in the market and the potential of the track that Cook has officially established the project since the second half of last year.
02 COOK's product design and development process
It is reported that the launch of Cook products is close at hand.
Kun told Odaily that Cook’s next milestones include: issuing crypto index derivative tokens of mainstream currencies on Ethereum, then launching the Heco chain, and launching the Heco index (with the assets on the Heco chain as the investment target index), adapting to the Heco chain The Cook contract is being audited.
Cook chose the Heco chain as a "test field" for more complex platform functions, which cannot be separated from the consideration of "usability".
According to Kun, the current cost for users to trade on Ethereum is already high, and the cost is even higher if they want to implement investment based on a certain strategy. He also gave an example, if you want to create a new asset on a derivatives platform such as Set Protocol, the handling fee after a set of procedures will be 4,000-5,000 US dollars.
Therefore, the Cook team believes that even if such a platform is technically realized, the economic benefits will be greatly reduced due to the problems of the underlying platform, and it will not be able to achieve the goals mentioned above.
"DeFi applications and protocols like ours are very easy to implement from a technical point of view. Only simple and efficient products can use Ethereum. Higher-level building blocks like ours also require users to enter some personal information (such as investment preferences), setting up address whitelists, blacklists, etc., requires receiving a large amount of information, so the contract becomes complicated and bloated, a bit like the Internet in the 90s, only typing, and sending a picture requires A few minutes."
So, Cook decided to try Heco, an active new ecology.
As for why he started with index products, Kun also answered. Index funds, also known as passive funds, usually invest in the constituent stocks of the index. To put it simply, they buy or adjust stocks according to certain algorithmic rules, without human factors. The same is true for investing in mainstream tokens.
Because index-type products have no human factors, and the frequency of operation does not need to be too frequent, it is more suitable as a water-testing product for the platform.
According to Kun, the product is mainly obtained by the Cook team based on the market value of the component tokens. It is somewhat different from the mainstream cryptocurrency indexes of other platforms in the market. However, you can compare the specific configuration when the product is launched.
By the second half of this year, Cook plans to connect with more DeFi protocols, build an ecological online governance system, deploy to Polkadot, and launch NFT games, etc. Additionally, Cook expects to implement features that support the creation of decentralized fund products.
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Product Concept Map
In terms of operation, Cook will strictly screen fund managers in the early stage, and consider issuing funds by himself as a fund manager. When the market has a certain degree of acceptance, it can be opened to fund managers. However, in order to protect the interests of investors, the platform has also made some rigid settings for funds. For example, when a fund manager A defines a fund as an interest-earning deposit based on a lending agreement at the beginning of creating a fund, then its authority to use funds has been fixed as an investment and lending agreement, and cannot transfer funds to trading mining, etc. form. Of course, a DAO is also set up on the platform. If A needs to apply for new permissions, he needs to initiate a proposal and the community votes to decide.
Special funds are dedicated, funds cannot be unlocked within a short period of time, and can only interact with specific addresses... Such settings will protect the user's funds.
For investors, buying funds also involves redemption and trading. Kun said that the redemption of funds on the platform can be done in real time, but the buying and selling will only be for relatively large funds. If the medium and long-tail funds are only tens of thousands of dollars in size, it is difficult to build a dedicated liquidity pool.
In addition to these product logics, risk control measures are also very important for an asset management platform. In this regard, Cook follows risk control principles such as strict auditing, purchasing insurance, screening fund managers, and setting pledges and permissions.
The audit process is long but indispensable. In terms of code security, team members with strong technical backgrounds are used as "quality control guarantees."
According to the official introduction, most of the team members come from universities such as Stanford University, UC Berkeley, and Cameron University, as well as companies such as Google, Fidelity, and YouTube, and have many years of experience in the blockchain industry.
Of course, it is difficult to ensure 100% safety under a multi-pronged approach. In order to deal with this risk, the platform will consider providing insurance for the fund. "The fund can choose an external one. In the future, when the community becomes active, it will directly open an insurance pool for a certain fund internally."
In general, Cook's positioning and functional design of the platform are more in line with the needs of the market and target users. How about the specific product experience, we might as well experience it after its launch in April.
03 Future plans and understanding of its own moat
Cook's long-term plan will also support multi-chain and cross-chain, such as adding support for Ethereum, BSC and Polkadot ecology, and realizing cross-chain through Heco's cross-chain bridge.
"The Parachain of Bocaine has not yet been officially launched, but we have already started to hire some technicians who understand the Rust language to study it. This is not a particularly common language in the Internet world and the encrypted world, and requires a dedicated person to be responsible." Kun told Odaily.
In terms of cross-chain, Kun said that he is already communicating with the Heco chain development team to obtain technical support.
After understanding such products and routes, let's take a lookToken situation。
As we mentioned above, Cook has recently received investment from Block Dream Fund, an investment institution under OKEx, and DuckDAO, a digital asset incubator. In addition to consultants, financial resources and marketing assistance, the latter will also serve as one of the IDO platforms for Cook’s token COOK , another distribution platform is also Poolz, a popular asset distribution platform recently. After IDO, COOK will be launched on Uniswap and start liquidity mining. About the latest plan of IDO, Cook officialRecently announced that an IDO will be held on Poolz on March 30th。
According to the official white paper, Cook's token distribution rules are as follows:
60% is used for mining rewards to encourage more people to participate in the Cook agreement;
10% will be used for community building incentives and airdrops to motivate initial community building;
10% will be used for early community members’ recognition, whether this part has been recognized;
10% will be used for ecological development, and this part of tokens will be used for marketing and business cooperation;
The last 10% is allocated to team members to motivate the founding team and future employees, and continue to promote project progress and innovation.
At the same time, Cook proposed a different set of token-holder-friendlyToken unlocking mechanism。
According to the white paper, in order to improve the market supply and demand balance of COOK tokens, COOK in the early community will be unlocked according to the market price and time. The specific rules are that the time-based unlocking mechanism will unlock 1/12 of each month to ensure that the token price can be unlocked within 12 months even if the token price does not reach the target. The part of the team will be unlocked according to the market price after being locked for 90 days (3 months). "If the price does not reach the target, it will not be unlocked."
After talking so much, at the end, I asked Kun, "Where do you think Cook's moat is?"
Kun summed up two points, one isSolid background of team members, has worked in large technology companies and financial technology companies, and has many years of experience in the encryption industry. "Such a diverse background and a deep understanding of finance make our innovation sustainable."
Secondly, most of the founding teams are in Silicon Valley,Close contact with foreign DeFi circles is conducive to the generation of ideas, mutual reference and progress. In fact, Cook has already cooperated with many well-known teams in the industry. In addition to the above-mentioned DuckDAO and Poolz, there is also the AI-enhanced public chain Velas. The founder of the public chain also founded CoinPayment, the world's first and largest cryptocurrency payment platform with over 3 million users.
"In the past two weeks, we will also announce a cooperation with NFT head players. We may consider using funds as characters and pets, and then gamify them, so that NFT also has assets behind it, and DeFi itself also has a secondary line. Playable." Kun talked about the next plan with great interest.
Perhaps everyone can feel from the above that Cook is a team with clear positioning, solid background and practical ability. No matter how effective the implementation is, we look forward to more teams like this, continuing to expand their territory in the new moonland of DeFi.
