Manufactured in China Defi could be the correct way to open financial Lego

DeFi was previously a niche concept in China. On the list of countless WeChat groups based on cryptocurrencies which can be setup every day, few people use DeFi while the theme. Even yet in these activities, you will find hardly any cases of posting, chatting and throwing red envelopes.

The specific situation is significantly diffent now. In view of the recent enthusiasm for agricultural production, DeFi has suddenly become "the hottest wool". These tiny WeChat groups are growing every day, attracting businessmen, miners and investors. They now wish to know: How do you get "farm income"?

This week's soldier may have an in-depth knowledge of the real history and players of the Chinese DeFi community, and propose future development guidelines.

Imported Defi

DeFi isn't just niche, nonetheless it is really a bit too intellectual for the Chinese currency circle. For the general public to comprehend how DeFi works, they need to be experienced in complex financial products, smart contracts, and fluent English.

"From the early days, the data asymmetry between East and West in DeFi still exists. " Tina Zhen explained that she started creating DeFi products and services in 2018 through hackathons and continuous flash companies. "It took China three months to meet up with the newest DeFi innovation in the West. "

This information asymmetry has produced a small number of core developers, such as for instance Yang Mindao, who's the co-founder of dForce (now considered the uncrowned DeFi prince), and other developers, from 0x, MakerDao and Compound, etc . I saw DeFi in the project. However , almost no one really wants to jump in to the ocean of DEFI.

In the past, capital was also scarce. Most crypto investment capital companies have set their sights on low-risk projects that can get immediate returns. Not just is DeFi still a new concept, but you will find no proven examples, let alone profitability.

Zhen said: "There was a turning point when Uniswap announced its acceptance of Paradigm's investment in April 2019. Many Chinese cryptocurrency investors, media and thought leaders started initially to seriously consider DeFi. "

Rapidly localized Defi

Once DeFi was legalized, China saw a wave of entrepreneurial activities and quickly followed Western flagship products and services. DForce is really a classic example-it directly adds Compound's V1 code. Yet another example is MCDEX, a DeFi project that recently released the initial decentralized ETH Perpetual. So that you can follow the farm's production trend, MCDEX may also release an exchange token called MCB, allowing users to be involved in the trend of liquid mining.

But this is not the greatest goal of MCDEX. What we see in the DeFi field in China is that entrepreneurs are utilizing Western technology to resolve local dilemmas. The real agenda of MCDEX is always to provide financial services to Chinese customers that have yet to obtain global benefits.

Although China plays a number one role in developing a cashless economy, the financial market is still immature. Domestic investors rarely have access to high-yield products and services, such as for instance US stocks, bonds and other stocks. Because of this, many people have dedicated to increasingly frothy real estate, loss-making stocks or poorly managed financial instruments.

MCDEX hopes to fill this gap by providing services to immature retail investors and become the Robin Hood of China. Specifically, it is launching MCfund, where users can deposit assets and choose existing trading strategies and never have to trade on their own. Similarly, MCDEX has not made a technological breakthrough. It has borrowed Western concepts and used DeFi as something to serve Chinese users.

Flow entrance-wallet

The latest trend in providing services to retail consumers through encrypted wallets is developing.

DeBank is really a one-stop DeFi wallet that connects DeFi products and services to retail consumers. DeBank will not act as a centralized custody, it is just an aggregation layer that helps users manage their investment portfolios.

DeBank founder Tang Hongbo explained, “We realize that many Chinese investors don't trust DeFi because they believe that most wallets are still intermediaries and therefore the risk is high. ” “We desire to transfer investors' trust in us to their locations. Investment products and services. Consequently , we are not engaged available of handling user assets. We are a paradise for Web3. 0 and Dapps. "

Yet another example is Tokenlon, which is really a DEX project built on the 0X DEX protocol. The reason behind its great success is that it embeds imToken, China's largest crypto wallet. "Our goal is always to bring decentralization in to the conventional. " Lucas Huang, Tokenlon's head of growth, explained.

Tokenlon's competitors are not other products and services of DEX, but centralized exchanges. There's absolutely no better way to achieve decentralization than to engage in a centralized entity that serves the majority. In addition , Tokenlon also created imBTC to inject BTC liquidity into Ethereum's DeFi ecosystem. Although imBTC was both a victim and an inducement of dForce hackers, Tokenlon was one of the first companies to bring much-needed liquidity to Ethereum.

Finally, Loopring, the Ethereum scaling solution using zkRollup, allows users to seamlessly send ETH and ERC20 tokens. Likewise, expanding Ethereum is not the greatest goal of Loopring: there is an encrypted wallet on its product roadmap. According to its chief operating officer, it's going to make Loopring the Alipay of Web 3. 0.

Legoland at Defi

If DeFi is really a group of Lego bricks, the addition of Chinese indigenous DeFi products and services adds more bricks to the present ecosystem. It's as if the global toolbox suddenly has more tools.

Let's face it, inspite of the madness of DeFi, it is still a show hosted by a giant whale. On Compound, about 20 addresses received nearly half of Compound tokens. To the disappointment of numerous people, DeFi has not attracted external capital and is still a game title in the crypto ecosystem to date.

For DeFi to play a significant role in the global economic climate, it must surpass a small number of giant whales and crypto intellectuals. That is where Chinese DeFi entrepreneurs might help.

China features a huge audience, that will bring liquidity, transaction volume and many more innovation to the global ecosystem. The Chinese business community is found involving the East and the West. They have to borrow the very best Lego bricks in the global DeFi ecosystem and bring them to the Eastern audience.

For local Chinese tech giants like Alibaba and WeChat, that is a classic trick. They adopted Western innovative technologies such as for instance e-commerce and digital payment, and expanded their scale by 100 times. More specifically, they started initially to build their own technological empire outside China. Now, Chinese entrepreneurs work hard to create their own Legoland in China. We could only imagine what size it will be.