At MEXC TW Space Talkshow, we invite guests from different fields and regions to give users more market insights about newly-listed projects through open discussion.
Hello everyone, welcome to our MEXC Talk Show. On an impressive talk show the other day, we discussed The future of SocialFi.
Tonight let’s turn our attention to the most exciting topic:How to Improve Your Asset Efficiency in a Bear Market? We have invited Michael Kisselgof, co-founder of Popcorn, to provide our audience with more insights on DeFi through an open discussion.He is an experienced blockchain community practitioner.
Since the second half of 2020, decentralized finance (DeFi) has achieved unprecedented development, and the total value locked (TVL) has continued to soar. Various types of DeFi applications such as mining, lending, synthetic assets, and stablecoins are emerging one after another.
In order to lower the threshold for users to use various DeFi applications, DeFi aggregators came into being. DeFi aggregators not only reduce users’ operating costs, but also improve users’ profits. So, what exactly is a DeFi aggregator? How does it improve users’ profits? What are the risks of users putting funds into DeFi aggregators? Today we are going to discuss these issues together…
Q1: First of all, Michael, can you explain to us what DeFi aggregators are and what are the general mechanisms behind these aggregators?
A1: To put it simply, A yield aggregator is a set of smart contracts, or a protocol that pools users funds, and deposits them into yield-generating products or services. These yield-generating products use traditional finance mechanisms such as lending, borrowing, and leveraging to generate yield.
Q2: We know that DeFi aggregators not only lower the threshold for users to use these DeFi applications, but also increase users’ profits, so where do the profits provided by aggregators come from?
A2: Profits come from the process of generating yield on crypto assets , or “yield farming”, Basically a yield aggregator is a smart contract-based fund manager, whose strategies are pre-programmed and automatically executed
Yield farming relies on other building blocks in the DeFi stack such as
Lending platforms, which enable lending and borrowing of on-chain assets with interest rates programmatically set by smart contracts . So essentially, funds are pooled together to be borrowed by other users that want to take out a loan in a specific asset. Suppliers of loanable funds receive interest over time, borrowers pay interest. And the way interest is accrued in a given market is through market-specific, interest-bearing derivative tokens
Yield farming also relies on
Automated Market Makers that algorithmically provide liquidity by pooling funds and determining asset prices. In a liquidity pool, reserves of two or more assets are locked into a smart contract. So, there’s two core functions of the AMM:
- First, theres the liquidity providers, who add funds to the pools and in return, they receive LP tokens proportionate to their liquidity contribution as a fraction of the entire pool. These LP tokens can be redeemed anytime the LPer wants to get his funds back.
- The second core function is trading, or traders who swap in and out who essentially set the exchange rate, and thus the price of an asset. AMM’s charge fees for trading and these are collected.
Now the cool thing about DeFi is that there are protocols that automate fee derivation into yield generating products, which is what we do at Popcorn. Liquidity mining programs where protocols offer native tokens in exchange for transacting with the protocol is also another source of yield.
Q3: Are there risks to users putting funds into DeFi aggregators? If so, how can users avoid these risks?
A3: Yes, there is always smart contract risk, thus you need to do your research before depositing, meaning investigating the team, whether the protocol is audited, who audited them, what other protocols they’ve integrated, and you can ultimately look at the code since it’s open source. This is unfortunately difficult for non crypto savvy users and hence the reason why Popcorn makes an effort in being completely transparent and easy to understand when communicating all of the above.
Q4 In DeFi, a very important point is “how to find the best offer for users”. At present, there are many DeFi protocols in the market. Different protocols have their own unique algorithms. Can you tell us what kind of protocol Popcorn is?
A4: We create novel asset strategies, plain and simple. For example, the underlying protocols used by our yield optimizers include Set Protocol for managing the underlying basket of tokens, Curve’s AMM and gauge system which is the source of the yield, and Yearn which functions to automate yield accrual. Our yield optimizers automates yield farming associated with a basket of tokens determined by PopcornDAO.
An important thing to understand is that market downturns can in fact increase yield on some of our products as the fees accumulated from swapping on AMM’s that Popcorn aggregates can actually be greater as traders sell or swap out of pools on AMM’s. In fact, some of the greatest yield that we’ve seen have happened on red days.
Q5: Compared with mainstream DeFi aggregator projects such as Zapper, Pickle Finance, Harvest Finance and Yearn Finance, what are the advantages and features of Popcorn?
A5: Our USP is that we automate a portion of the fees that you would typically pay on another DeFi protocol and the PopcornDAO collectively determines which nonprofits and social impact organizations to fund on-chain and now, you can use Popcorn to optimize your stable coin yield using several of our products and also farm POP, which is required to participate in governance by lock staking to receive vlPOP. We’ve baked in philanthropy into the protocol and at no additional cost to the user.
Q6: Users who currently use Popcorn smart contracts will get the POP tokens. What are the utilities of the tokens in the Popcorn ecosystem?
A6: POP is required to participate in beneficiary governance and grant elections, essentially having influence on Popcorn philanthropy. We drew inspiration from Curve to implement venomics into the protocol, meaning you will need to lock stake POP in order to participate in governance. vlPOP, vote locked POP, can also be used to
- Vote on which products receive POP emissions
- Vote on how much POP is directed towards products
- Earn staking rewards (trading fees)
- Earn boosted rewards on products depending on a users voting power
- Receive Airdrops
Q7: Can you tell us about Popcorn’s recent roadmap and future plans?
A7: THis year we released two novel asset strategies, or yield optimizers, for usd and non-usd denominated stablecoins, which you can use mint a derivativie to then stake and farm POP. In the very near future we’ll be releasing more single asset vault strategies where you will be able to deposit a wider range of stable and non-stable coins into automated yield strategies, or what we like to call Sweet Vaults.
Q8: Last question, we noticed that Popcorn is doing some public welfare activities that have a positive impact on society, such as using part of Popcorn’s proceeds to address global environmental challenges. Can you share this with us?
A8: Exactly, we have over 1,300+ verified beneficiaries that we know that can accept crypto and all are eligible to become a beneficiary of Popcorn. The more users transact with Popcorn’s smart contracts, meaning the more people use Popcorn to generate yield on their crypto, the more we can donate to these beneficiaries. To kickstart our philanthropic efforts and honor the social contract of being the noble DeFi protocol for good, we just completed a campaign with Bore Ape Yacht CLub
Closing and Airdrop
Thank you for the in-depth explanation and professional analysis, and thank you all for the support and positive interaction. This concludes today’s MEXC TwitterSpace. Welcome to join our community MEXC Englishhttps://t.me/MEXCEnglish and share your thoughts; there are many MEXC events and prizes waiting for you. For those who participate in our gleam task, you can type the password Popcorn in the gleam to win the prize.
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