Deri Protocol Monthly Report for March
Financial derivatives are a function of a certain underlying asset such as stocks, commodities, currencies, indexes, bonds, etc. Futures, options, and swaps are common types of derivatives. The economic purpose of financial derivatives is to conveniently and accurately obtain risk exposure about a certain asset with a lower capital cost.
Back to derivatives, risk trading is the core function of finance, and it has always existed in the crypto world, but it is mainly done by centralized exchanges. However, the main mode of operation of a centralized exchange is a semi-centralized solution for off-chain matching and off-chain settlement. This is the reason for the existence of decentralized derivatives trading agreements.
At present, DeFi financial derivatives have achieved very good development. For example, Uniswap, Synthetix, etc. are all familiar products. Ofcourse, there are still many new decentralized derivatives platforms that are rolling out the old and new, hoping to get a userbase.
Deri Protocol embodies what a decentralized derivatives exchange should look like from many aspects, specifically in several aspects:
Real DeFi: DeriProtocol is a smart contract developed based on Ethereum, Binance Smart Chain and Huobi Ecological Chain. All transactions are carried out on the chain. At the same time, Deri has also developed a cross-chain bridge to support multi-chain swap of its native token (DERI) between all three supported chains i.e ETH, BSC, and Heco.
A true derivative: Deri Protocol’s liquidity pool uses the combination of on-chain oracle smart contracts and off-chain oracle servers to obtain prices to ensure accurate PnL of positions. At the same time, margin trading is implemented to provide inherent leverage.
Composability: Deri innovatively introduces NFT to represent positions. When the liquidity pool processes an order, it will cast a Position token (PToken) to the trader’s address. This NFT records the direction and quantity of positions, average transaction price, pledged margin and other information, while PToken is a non-homogeneous token that can be transferred and traded, and can be liquidated, increased or decreased through interaction with the liquidity pool. Add or withdraw margin, etc. The introduction of NFT increases composability, and PToken can be used as a basic component by other DeFi projects in any scenario that requires corresponding risk exposure.
Openness: Anyone can start a liquidity pool based on any functional currency (usually a stablecoin) with any transaction object as the subject. Deri Protocol does not force users to use any specific “collateral”.
The transaction process is similar to Uniswap, but the liquidity provision (liquidity mining) is much simplified compared to the liquidity pool for performing spot transactions. Uniswap’s liquidity pool needs to hold a pair of tokens in the liquidity pool that performs spot transactions, and traders can exchange them. In Deri’s liquidity pool, only the functional currency of the derivatives needs to be held.
Current progress of Deri Protocol
Deri Protocol is obviously a product that is still being polished, and many of the functions that everyone expects are still being improved. Since the launch of Deri Protocol this year, it has achieved good results. On February 9th, the liquidity pre-mining and TVL competitions were opened, which officially opened a new chapter. Since March, many aspects have been improved, functions have been continuously improved, data has been steadily improved, and the community has continued to grow.
A. Related data
1. TVL: As of March 30, the TVL of each Deri Protocol pool is the highest in the BAC pool (ETH chain), reaching $9.8 million. Next is the USDT of the ETH chain, reaching $4.7 million followed by BSC’s BUSD pool of $2.8 million, and Heco’s HUSD pool of $368,000. TVL also reflects the current popularity of DeFi public chains to a certain extent.
2. Three-chain liquidity mining APY: On the whole, Deri Protocol’s liquidity mining APY is relatively balanced, basically around 98%.
B. Product dynamics
1. Open BSC, ETH mining rewards extraction
On March 4, Deri opened BSC and Heco chains for users to withdraw their mining rewards, giving users two more choices.
2. Deri Protocol cross-chain bridge is online
At present, the Bridge function of Deri’s official website is available. It will be officially launched on March 15. It supports ETH<>BSC, ETH<>Heco, BSC<>Heco conversion and three-chain interoperability, which is convenient for users.
3. Deri Protocol LOGO optimization update
On March 18, Deri Protocol updated the project LOGO, a new LOGO, a new journey, the same original intention, and a clearer direction.
4. Optimize the mining rules and shorten the extraction time
The original mining reward extraction cycle of Deri Protocol was 7 days. On March 22, it was changed to 8 hours. Users can withdraw rewards at least once every 8 hours, making it more flexible.
The continuous change of products reflects the team’s work attitude. Good products cannot be made overnight and need to be continuously improved.
C. Market dynamics
1. Launch perpetual contract and start contract trading competition
On March 14, Deri Protocol launched 4 coin-based liquidity pools based on USDT, BUSD, HUSD, and BAC, leading with a 7-day contract trading contest.
2. The first proposal of DAO governance is completed to improve the DERI token economics model
Deri Protocol’s token DERI plays many roles in the ecology, such as DAO governance, mining rewards, etc.
On March 19, the first proposal for DAO governance was passed. The proposal was mainly aimed at the improvement of the DERI token economic model. The final result of everyone’s vote was: 20% of the transaction fees earned are given to the DAO Foundation, and the funds will be will be used to repurchase and burn DERI in the secondary market.
The contract trading is the basic function of Deri, and going online means that the basic function has been perfected. The adoption of the governance proposal means that decentralized governance has achieved initial results. Both events are milestones.
D. Community building and activities
Deri held 6 AMAs this month, with special sessions in Chinese and English. AMA is an effective way to promote projects and expand communities.
ii. The size of the community
At present, there are 1500+ Chinese community users, 2500+ English community users, Twitter following 1.7k, and French, Japanese, and Thai communities. The size of the community is expanding.
A Decentralized derivatives protocol are definitely in demand. It is one of the infrastructures for a new generation of financial derivatives. Deri Protocol is one of the emerging representatives. The design is fully in line with everyone’s desire for decentralized derivatives exchanges. Deri Protocol officially set sail this year. It is currently improving functions, expanding the market, and expanding the community. The future is worth looking forward to!