ThunderCore Ecology — DeFi Services Upgrade
Tags: Tt, Research, Thundercore, Defi, Ecology

In the DeFi ecosystem, the control of assets is transferred from financial institutions to customers. The surge of interests and the growth of market are remarkable. We will start with ThunderCore Hub and DEX to gradually upgrade ThunderCore’s DeFi ecological services to meet the new demand of users to participate in DeFi. This paper will further explore and share the basic knowledge of DeFi. Come on, join us!

What is the value of DeFi? Why is it called the second breakthrough in the history of cryptocurrency?

Since the birth of Bitcoin, token transaction has formed a huge value field. Actuals, futures, options, contracts and OTC are perspective terms and also the most familiar fields for ordinary users; token application is most active in games. Almost all public chains have developed the largest quantity of this kind of DApp, and the user base is also extensive; token application in the financial field, especially asset management, is dominated by DeFi. In the short term or in the long term, token transaction, game entertainment and DeFi will be the core modules of blockchain value application.

DeFi is the abbreviation of “Decentralized Finance”, also known as “distributed finance” or “open finance”. Generally, it refers to crypto assets, financial smart contracts and protocols based on smart contract platforms (e.g. Ethernet, ThunderCore). DeFi is aimed at building a transparent financial system that is open and permission-free to all and not dependent on any third-party institution to meet financial needs.

In the existing financial system, financial services are mainly controlled and regulated by the central system, whether it is the most basic deposit, withdrawal and transfer, or loan or derivative trading. DeFi is expected to build a transparent, accessible and inclusive point-to-point financial system through distributed open source protocols, to minimize trust risks and make financing easier for participants.

Generally speaking, the industry regards the birth of BTC and various digital currencies as the first breakthrough of cryptocurrency. Value transfer free from any third party is achieved through proper application of cryptography, consensus mechanism, P2P network and incentive mechanism.

However, decentralized currency issuance and storage provides a point-to-point settlement solution, but is not enough to support rich financial business. DeFi has the potential to further build an open financial system in blockchain world, which is seen as the second breakthrough in the history of cryptocurrency. Although it is not as influential as Bitcoin at present, it has begun to take shape and has the potential to grow.

Noticeably, DeFi is a financial application and a transparent protocol that uses blockchain’s distributed technology to automatically run through smart contracts, rather than a blockchain system. Hence, its core logic is not TPS, but security.

How is today’s DeFi?

DeFi is a relatively broad concept. It now involves such business areas as currency issue, currency transaction, loan, transaction in assets, investment and financing. According to incomplete statistics, DeFi’s storage value (locked) is about 34.8 billion, and its loan value is about 10.8 billion. Its storage value accounts for only 1.33% of the global aggregate market value.

DeFi was born after the emergence of programmable Ethereum blockchain. From the perspective of distribution, most of the DeFi projects are concentrated on ETH, along with EOS, TRON, ThunderCore, etc.

From the perspective of product modality, current DeFi already includes a decentralized trading platform, decentralized borrowing and lending, Staking, stablecoins and other infrastructure, and the whole ecology is improving.

ThunderCore’s DeFi business now covers decentralized exchanges (TTSwap), Staking (super nodes, equity pools, mining activities, etc.), cross-chain interactive token bridges (TokenBridge), decentralized oracle machine (Oracles) and so on.

At present, there are many well-known DeFi protocols. The following are for reference:

1) Debit and credit (MakerDAO、Compound、Dharma)

2) Derivatives and prediction market (Synthetix、Augur)

3) Decentralized transaction (Uniswap、TTSwap、Bancor)

4) Payment channel (xDai)

5) Asset management (Set Protocol、WBTC、Melon)

Since DeFi means interaction between users and a series of smart contracts on blockchain, people can take advantage of its transparent and permission-free characteristics to earn profit. For example, optimal price is realized through DEX aggregation; optimal interest income is achieved through the aggregation of loan protocols.

DEX is important infrastructure for DeFi business development

DEX is short for “Decentralized Exchange”. As a matter of fact, before the concept of DeFi was born, decentralized exchanges had been developing silently for many years. For example, the decentralized exchanges in single public chain like ETH, EOS and ThunderCore are well realized and able to support P2P transaction between digital assets with the same technical standard in a single public chain.

DEX is essential for a really decentralized financial closed loop. For DEX transactions, capital is kept in the user’s wallet or smart contract of transaction, and completely controlled by the user. When the user initiates a transaction, the exchange performs the smart contract to complete the transaction. The asset transfer is completed on the chain. Transaction record can be viewed on the chain. It is open and transparent.

DEX has gradually developed into three modes: on-chain order sheet mode, off-chain order sheet mode and repository mode. The on-chain order sheet mode is completely decentralized, but the transaction cost is high and the efficiency is low. In order to improve the transaction speed and reduce cost, people begin to adopt the mode of “off-chain matchmaking + on-chain settlement”; under the repository mode, the repository provides capital to support transaction, which directly skips the matchmaking link and is more efficient.

TTSwap is a typical DEX deployed on ThunderCore. It can achieve automatic exchange transaction between TT and TT20. It uses the constant product market maker algorithm to create a single liquidity reserve for each digital asset issued on ThunderCore (e.g. TT-USDT) and ThunderCore transaction pair. The reserve pooling model is adopted to achieve on-chain matchmaking and on-chain clearing.

ThunderCore Ecology — DeFi Service Upgrade

Overthrowing the traditional financial system, DeFi brings more vitality to blockchain technology . On the one hand, DeFi has become the focus of the whole blockchain industry, and the number of users involved in DeFi projects is on increase; on the other hand, most blockchain networks run on their respective ecosystem, so that their assets form value islands among each other. It is difficult to realize multi-asset interoperability.

ThunderCore will upgrade its DeFi services on the basis of the original scattered products to help developers and users better integrate into innovative and thriving DeFi ecology.

The “DEX” bar has been added to ThunderCore Hub’s bottom main menu to facilitate users to experience ThunderCore’s DeFi projects; ThunderCore is promoting its ecological developers to enhance DeFi brand awareness by clearly defining the DeFi business area in the name (or slogan) of each DeFi product, so that users are better informed; DEX will further develop cross-chain interaction. The business will be further expanded on the basis of decentralized trading in tokens inside ThunderCore to cover cross-chain transactions of all currencies (e.g. ETH, BTC and their on-chain tokens) ; We will subsequently integrate DeFi related products in ThunderCore ecology, so that users can experience diversified DeFi products and services on a relatively centralized page; We will optimize the user interface together with developers to create humanized visual interaction for DeFi products; We will focus on deploying borrowing & lending and the issue, transaction and asset management of cross-chain derivatives.

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