CEX Mining Guide: Whose DeFi is the most valuable?

Nuclear Finance Original 2020-09-11 16:07 Popularity 1870

Since June, the wealth effect stimulated by DeFi mining has continued to push up market sentiment.

An obvious trend is that more and more people are beginning to learn how to use the wallets of public chain projects such as Ethereum and Tron to perform on-chain operations. The same question that major cryptocurrency trading communities often receive is: How to participate in liquidity mining?

Entering September, the pace of centralized exchanges in deploying DeFi is no longer limited to simply launching projects, but taking the initiative to open up new coin mining and DeFi mining. On this basis, Huobi, which was the first in the industry to launch platform coin mining, became a pioneer among centralized exchanges. After Huobi, a number of centralized exchanges also began to imitate and launched similar gameplay based on their own platform coins.

On September 11, Huobi launched the third DeFi new coin mining activity, launching three new coin mining projects in three consecutive days. Huobi's speed is really amazing.

So among the DeFi games launched by Huobi and Binance, which one has the highest return? Compared with decentralized exchanges, what advantages do DeFi launched by CEXs have? This article will reveal them to you one by one.

Users can become "farmers" with zero threshold

The DeFi craze first emerged in overseas communities. Simply put, it is a process in which users pledge their digital assets to liquidity pools on DEX through a series of on-chain operations to obtain returns. Overseas communities call this group farmers, which is what domestic users call miners.

However, compared with the emerging traders who rushed into the market to "pick up money" as early as June, ordinary users have to face tedious practical problems such as network congestion, manual transfers, and high gas fees when participating in DeFi mining on decentralized exchanges. Many old-timers in the currency circle who are interested in DeFi mining have said that they "don't understand".

Complicated operations have become the main factor preventing new users from entering DEX mining. On centralized exchanges, this process has been completely liberated.

On September 7, the first phase of Huobi DeFi liquidity mining was officially launched. The first batch provided blockchain assets equivalent to 10 million USDT for liquidity mining. All the rewards generated by mining were returned to users who locked HT and HPT. The reward was in the form of the local currency (CRV) obtained from liquidity mining. For this process, participants only need to click one button on Huobi’s official website.

At present, the annualized rate of return of locked HT for participating in liquidity mining is about 50% to 300%, and all locked HT will be automatically unlocked upon expiration, and the coin-based risk is zero.

On the other hand, Binance's liquidity mining rules are relatively complicated. On Binance's liquidity mining page, users can choose three trading pairs: BUSD/USDT, USDT/DAI, and BUSD/DAI, with corresponding annualized returns of 20%, 21%, and 18%. If we only look at the rate of return, Huobi's first DeFi liquidity mining performed better.

The top platforms have different strategies

The big firms’ impact on DeFi is not just simple “copying”.

In addition to opening the liquidity mining entrance that made DEX shine, Huobi also integrated DeFi gameplay into the asset side. On September 7, Huobi’s official website announced the launch of “New Coin Mining”. On the day of the announcement, HT rose against the trend, with the highest increase of nearly 10%.

At 8 o'clock that evening, the ACH (Alchemy Pay) of Huobi's first "New Coin Mining" project was launched, and users snapped up the new coin mining quota by locking up the platform currency HT. The first DeFi new coin was snapped up in just 50.4 seconds.

After the opening of trading, ACH rose to 0.06 USDT, a 1500% increase compared to the opening price of 0.004 USDT. Some industry insiders predict that after the IEO new game, DeFi mining will become a must-fight for centralized exchanges, thereby boosting market sentiment.

Two days after Huobi launched its first coin mining campaign, Binance also followed suit on September 9, launching the first coin mining campaign of Bella Protocol (BEL). Different from Huobi’s online trading rhythm, Binance’s coin mining cycle lasts for 30 days, and the opening trading time of the new coin is scheduled for September 16. This means that Binance users cannot cash out the mining rewards they have received within 15 days of locking up BNB for mining.

However, if calculated based on the BEL private placement price of $0.75, a Binance user's $10,000 investment would only yield about $2.85 per day, a daily rate of return of 0.0285% and an annual rate of return of only 10.4%.

On the other hand, Binance's slow pace contrasts sharply with Huobi's fast mining and fast listing. The rule that mining income cannot be cashed out after being locked for 15 days is not user-friendly. What it reflects may be investors' long-term anxiety about the risk of a market crash.

Attacking DeFi and reshaping the ecosystem

The hot DeFi market has taught a lesson to the top exchanges represented by HBO, and also made the giants see the huge potential of the market. Take Huobi as an example. The three phases of new coin mining and the two phases of DeFi mining activities, which were launched less than a week ago, have accumulated 26.3 million HT locked.

Market analysts said that according to the current lock-up rate, the newly added HT lock-up this month is expected to reach 50 million HT. Combined with the Huobi Pool HT lock-up mining, the pool has locked about 50 million HT, and the actual circulation of HT has been locked up by nearly 50%.

On the other hand, the fight between big firms never ends off-chain.

As we all know, cross-chain assets are an important requirement in the DeFi track. Simply put, assets between different public chains cannot interact in real time on the chain. In this regard, Binance creates a 1:1 asset target on its own smart chain, such as BTCB, which is a BEP2 token anchored to Bitcoin. Huobi issues HBTC on Ethereum, which is an ERC20 token anchored to Bitcoin.

Judging from the current situation, the outside world seems to be more accepting of Huobi’s proposal. On September 10, the official Twitter account of the stablecoin exchange platform Curve announced that it had officially added a new HBTC/WBTC fund pool, which had also passed the weighted vote. Users can exchange Bitcoin-pegged coins HBTC and WBTC on the Curve platform.

After all, Binance Smart Chain is just a network that has been running for less than a month, and behind it is Binance’s own technical team, while HBTC issued on Ethereum owns the entire Ethereum community.

In general, the DeFi business lines of centralized exchanges are not synchronized. Huobi was the first to launch the platform coin DeFi mining gameplay, and the upcoming third phase of the project SUN has also been made public. Binance is closely following, while OKEx has only added a tool to connect to the decentralized lending protocol Compound on its own platform, which is slightly behind.