101TOLK: HOE Special H Online Conference was a complete success

At 20:00 on September 13, 2021, 101TOLK successfully held the HOE special H online meeting on Tencent Conference. When the HOU fund issues element coins, it will evaluate the elements. The higher the rarity, the smaller the number of issuances. With the gradual issuance of different elements, different elements can be synthesized to produce different substances for collection. For example, one O and two H can synthesize HO2, so the subsequent gameplay will be richer. In the next five years, with the growth of blockchain users, NFT is bound to become mainstream. We also firmly believe that everything can be NFT.

HOE is a commercial platform built on the Quorum architecture that meets financial-grade security requirements.

What is the role of decentralized finance?

To better understand DeFi, we should first look at how traditional finance came about. It feels like money has always existed since we were born, but this is not the case.

Humans originally bartered for the purpose of exchange. But as human societies formed and developed, our economies evolved along with them. We invented money to make the exchange of value easier. Subsequently, money helped introduce new innovations and higher levels of economic productivity. However, progress does not come without a price.

Historically, central banks have issued the currencies that underpin our economies. Central banks and financial institutions manage and regulate the supply of money in circulation. As our economies have grown in size and complexity, central authorities have gained more power as more people have placed their trust in them.

We trust central banks not to print more money overnight. You trust banks to store your money safely. And, when it comes to investing, you place your assets in the hands of financial institutions. By handing them control of your money, you hope to make a profit. But looking at financial systems around the world, the sad truth is that the power that comes with this trust is not always rewarded.

We often have little say in how companies handle our investments, or even how the institutions that run the economy manage them, and in most cases, investors receive only a portion of the rewards for the risks those institutions take.

DeFi tries to build something different

Decentralized finance aims to build a financial system that is open to everyone in the world and minimizes people's dependence on centralized financial institutions. Technologies such as the Internet, cryptography, and blockchain provide tools to jointly build and control financial systems without centralized financial institutions.

There is a saying in the blockchain space: “Don’t trust, verify.” Because using a blockchain network, you personally can verify all transactions that occur on the blockchain.

DeFi enables everyone to take control of their finances

Almost all DeFi applications are built on the Ethereum blockchain, the world's most popular programmable blockchain. Ethereum is a blockchain network that maintains a shared ledger of digital value. Instead of a central authority, the participants that make up the network control the issuance of the network's native cryptocurrency, Ether (ETH), in a decentralized manner.

Developers can write applications on Ethereum to create, store and manage digital assets (also known as tokens) on the blockchain. These are called smart contracts or decentralized applications (DApps). They are contracts or agreements executed by the Ethereum blockchain. Or, applications or scripts that are programmed to run only on the Ethereum network. You can build complex irreversible agreements without the need for middlemen.

Decentralized finance has the opportunity to build a more resilient and transparent financial system. Anyone with an internet connection can access and interact with smart contracts built on the Ethereum blockchain. Many smart contracts are built to be open source and interoperable with existing smart contracts. Therefore, users can verify the code of the smart contract and choose the service that best suits them.

DeFi is like Lego blocks

With LEGOs, you start with a pile of small bricks. It's up to you to decide how to piece the LEGOs together into something new. The same is true for smart contracts. With every new project, product, or service launched on Ethereum, there's an extra money LEGO in your collection. By piecing together the existing components of DeFi, money can be autonomously combined, modified, or created through multiple layers of smart contracts to create powerful new financial tools.

1. Low trust cost

Since the protocol that DeFi relies on is completely developed based on blockchain, it can follow the characteristics of blockchain technology itself, which is highly transparent and cannot be tampered with. Therefore, anyone of us can see the specific situation of these protocols and the flow of funds, and you can clearly know that the protocol cannot be modified at will. Therefore, whether we are C-end users or project parties, when we use DeFi protocols, we don’t have to worry about the evil of centralized institutions.

2. Low transaction costs

DeFi's natural openness is characterized by no need for access, open source and free combination, so everyone can directly connect their own tokens with multiple protocols, and we don't have to support DeFi, that is, centralized finance, and the many high costs of centralized exchanges we are familiar with. Now, including in traditional finance, a big point of financial infrastructure is that when we want to do an operation, the threshold is too high and the transaction cost is too high. In many banks, we have to wait for more than three days to open an account. For the whole, it is a very obvious transaction cost, including some handling fees, which are all handled very well in the DeFi world.

3. Censorship resistance

Censorship resistance mainly refers to the fact that once the debt settlement agreement on the chain is opened, it will automatically run and continue to run 24 hours a day. Neither the government nor any related institutions have the ability to stop or terminate it. This is also the characteristic of blockchain technology itself. Then the user completely controls the assets through the wallet and freely decides its corresponding circulation.

4. Security

DeFi is an open source protocol. Although there have been many hacker attacks in the past period of time, hacker attacks, whether in DeFi, in the traditional Internet, or in the DeFi field, as long as it is a program, it will definitely face the possibility of being hacked. However, from past history, we can see that open source code is generally more secure than these closed source software because many people come to find its bugs and problems, and then help it to optimize accordingly. Because of the characteristics of blockchain, we put everything in our own wallets and have full control over it, which is also more secure.

5. Ecological

When talking about DeFi, everyone may talk about the term DeFi Lego. What does it mean? It means that each debt-to-equity agreement, such as a loan agreement, a transaction agreement, is like a building block, and these building blocks can be freely combined accordingly, and then pieced together a variety of new financial agreements. And the embodiment of its ecology is actually its ecology. We can imagine that when more and more basic financial agreements appear, you can call them at will like APIs or simple interfaces because they are also open. So from what we just said, the DeFi protocol can be fully implemented at present. Whether it is technically or logically, it is feasible. After it is implemented, compared with the traditional financial infrastructure, it provides trust, low cost, low transaction cost, anti-censorship, security, and ecology. Several very important features, so based on this, we can make a judgment, which is also the fact that is happening in the industry, all financial facilities will be redone.

DEFI's application ecology

DeFi has emerged in the blockchain and has a wide range of applications. In terms of quantity, there are said to be more than a thousand DeFi projects, almost all of which are concentrated on Ethereum. In terms of types, they include decentralized exchanges, stablecoins, atomic swap protocols, insurance products, lending platforms, trade finance platforms, custody platforms, venture capital platforms, etc., covering almost all major areas of traditional finance.

NFT Market Segments

In terms of functional attributes, NFT can be divided into: infrastructure, project creation, transaction circulation, and derivative applications. NFT transaction volume is concentrated in the top projects.

Infrastructure: including the underlying public chains for issuing NFTs (ETH, Matic, Flow, Wax, etc.) and IPFS storage.

Project creation: Currently focusing on three areas: digital collectibles, game assets, and virtual worlds.

· Digital collectibles and digital information: including but not limited to collectibles, game props, identity authentication, electronic evidence, etc. Multimedia content with specific cultural imprints and artistic beauty, such as NBA Top Shot - NBA star short video collection NFT; game assets emphasize usage, such as the card NFT of the blockchain card game Gods Unchained can be used in actual game battles; virtual worlds can auction plots and special items, such as the plot NFT in Decentraland, users who own the NFT can build and transform the corresponding virtual land.

· Trading and circulation: Comprehensive trading platforms, led by OpenSea, provide users with a stable and convenient trading experience for multiple types of NFT assets. OpenSea, known as the "Amazon of NFT", supports NFT asset trading on multiple project platforms, and users can upload data content to mint NFTs for free. Digital art trading platforms, led by Nifty Gateway, focus on serving artists and art lovers, and solve the pain point of the lack of trading entities in traditional digital art works through the combination of NFT and digital art, bringing a new digital art trading model.

· NFT+Defi: It is expected to iterate quickly, with the main directions including lending and NFT index. Lending is done by users pledging high-value NFTs to lend corresponding tokens, but this has problems such as lack of liquidity of NFTs, large price fluctuations, difficulty in meeting users' financial needs or high financing costs. The NFT index is designed to divide high-value NFTs into a large number of low-value tokens to facilitate the circulation of assets and lower the investment threshold of NFTs, such as the NFT index fund platform NFTX. In terms of exhibition applications, there are mainly online display platforms and virtual galleries, where users can watch, auction and trade their favorite works of art without leaving home.

· Virtual Worlds, Metaverse: Currently, the Metaverse is in its very early stages, and there is no single Metaverse that will take years to develop. There are many Metaverse platforms trying to attract users, each with its own idiosyncrasies, while some are more focused on games. Some of these games include Decentraland, The Sandbox, Cryptovoxels, and Somnium Space, among others. Many have already partnered with popular NFTs. Virtual land is an important aspect that has quickly become popular in NFTs. Many video game companies are working on developing their own Metaverses and have enough budgets and experience to push their own versions into reality. For example, the most prestigious game production team, Epic Games, the creator of Fortnite and Gears of War, just received $1 billion in funding from Sony and other technology companies to effectively build the next evolution of the Internet, the Metaverse version of games. Another well-known game developer, Activision Blizzard, is also developing its own Metaverse.

In terms of content, NFT includes artworks, games, domain names, insurance, virtual worlds, metaverses, etc. According to statistics from NonFungible, the top three application areas in the global NFT market are virtual worlds, artworks, and games, accounting for 25%, 24%, and 23% of the global NFT market in 2020, and the corresponding market sizes are US$140 million, US$129 million, and US$129 million, respectively.

FT Project Examples

artwork

OpenSea, Rarible, Superare, MakersPlace, KnownOrigin, LinkArt, JoyWorld, Cryptograph, Cryptopunks, Meebit

game

Enjin, Chiliz, Sorare, CryptoKitties, League of Kingdoms

domain name

Ethereum Name service, Unstoppable Domains

Insurance

Yinsure.finance

Virtual world, metaverse

Decentraland, The Sandbox, Cryptovoxels, Somnium Space

In the next 5 years, as the number of blockchain users grows, NFTs are bound to become mainstream. Although NFT sales have fallen for two consecutive months since May 2021. However, some dapps, such as axis Infinity, R-Planet and Dark Country, experienced their best month of the year. These dapps are not based on sales of $1,000, but on NFT sales of $10 to $300. We can consider these cheap NFTs. These sales are very important for long-term growth because they create a greater opportunity to attract the masses to enter the industry.

Recently, a term “Staking economy” has become popular in the industry, which means pledge economy.

This should be another new term that has emerged after the "token economy". Compared with the token economy, the pledge economy actually has a much greater interest in ordinary investors.

The staking economy is essentially a form of mining, but it is different from what we usually call Bitcoin mining and Ethereum mining.

Bitcoin, Litecoin, Ethereum, BCH and other digital currencies are all based on proof of work (POW). Therefore, under this mechanism, the generation of new currencies is a competition of computing power, so there are various mining machines. The most popular and the one with the highest market share is the mining machine of Bitmain.

When we want to participate in the mining of these digital currencies, we usually go to the market to buy mining machines, and then find a computer room ourselves or entrust the mining machines to large mining farms for operation. The coins mined by the mining machines every day after deducting electricity costs and operating expenses are the net income.

“Staking” is another way of mining. Usually, digital currencies based on proof of stake (POS) and delegated proof of stake (DPOS) use this mining method.

In this mining method, the nodes in the blockchain system do not need too much computing power, but only need to pledge a certain number of tokens. After running for a period of time, new currency can be generated, and the new currency generated is the income obtained through staking.

This is equivalent to depositing money in a bank and getting a certain amount of interest every year.

In fact, in the beginning, only the accounting nodes could receive rewards for the consensus mechanism of DPOS. Because the accounting rewards for the nodes were very generous, the election of super nodes was extremely fierce. In order to canvass for votes from each other, the nodes distributed the node rewards to supporters. Since this was in the interests of most people and in line with the spirit of "blockchain is open source and everyone can participate", this practice of voting to return coins also became popular.