More Than Uniswap: Six Hard-Core Features of Zyro — A DeFi Project on Zilliqa
On September 2, decentralized exchanges (DEX), a key adoption application in DeFi field, processed a total transaction volume of $1.37 billion in 24 hours. Among them, Uniswap accounted for $990 million, representing a 20+ times increase compared to $68 million 100 days ago. The influence of the DeFi revolution extends far beyond people’s imagination.
DeFi is Nothing Like a Beachhead Competition
The massive wealth-building pace of Uniswap has led to the emergence of various “swaps”, and what followed was upgraded technical risks. However, DeFi is nothing like the original and violent beachhead competition. It has its own revolutionary logic behind it.
With a brief check on Top 10 DeFi DApps around the world, you will realize that lending and DEX protocols represent an overwhelming percentage. The reason is that their decentralized and transparent technology has solved the pain points of the lending and exchange markets.
As for a lending scenario, debtors will have to apply for collateral debts, which always requires collateralizing mainstream cryptocurrencies in exchange for a certain amount of stablecoins or other assets. The whole collateralization process, including the debt returning and penalty charging, are all set by the smart contract. Throughout this process, either party is able to misuse the collateral. Once the debtor violates the smart contract, his or her collateral will be automatically liquidated. So there will never be a deadbeat on these platforms.
DEX tackles the problems of trading under the table and virtue trading. Meanwhile, it gives the traders more decision-making power when it comes to listing as well.
However, DeFi is not simply a pile of financial tools. It requires a solid underlying technical foundation. Currently, most leading DeFi developers choose to build upon Ethereum, due to its stability and security. But the congestion and high GAS costs are widely criticized by the DeFi community.
Core members of the Zilliqa community developed the decentralized protocol Zyro upon Zilliqa public chain and gained great support from the Zilliqa Foundation. Zyro also attracted considerable attention from different parties. In today’s article, I’d like to analyze some of the hard-core features of Zyro.
Hard-core Feature №1: The Underlying Layer of Zswap is the Natural DeFi Public Chain — Zilliqa
According to the Zilliqa Foundation, as a leading public chain project globally, Zilliqa is planning on launching its own DeFi ecosystem in the near future. Zyro will function as the core of this ecosystem, with ZYRO as the native token of ZSwap — the decentralized exchange in Zyro protocol.
Put it straightforward, in order to tackle the performance and costs challenges, a DeFi public chain needs to be fast and cheap. From this perspective, Zilliqa is a natural public chain for DeFi projects. Zilliqa is not strange to seasoned crypto users and it has been widely recognized thanks to its high throughput and sharding capacity.
Here I’d like to talk more about this unique public chain.
* Excel while maintaining the balance between security and performance
The TPS of Zilliqa now stands at a stable level of 2800+. When Zilliqa was designed, its structure maintained a great balance among security, decentralization, and scalability. Meanwhile, Zilliqa has its original safe-by-design smart contract language Scilla, which has immensely guaranteed an application-level of security for the smart contract platform.
* Scale with the network
Thanks to the realization of the network sharding, Zilliqa divides the network into multiple shards and every shard has the capacity to process transactions simultaneously. For example, if there are six shards with 600 nodes in each shard, they together will be able to process 2828 transactions every second. The network structure also allows the platform throughput to increase linearly with the scaling of the network.
* Low GAS fee
For traditional blockchains, the lack of scalability directly affects the transaction fee paid to the network. The surge in transaction fees is closely related to network congestion and transaction backlogs. However, thanks to its sharding technology, Zilliqa realized high scalability and has very low Gas fees, which has laid a suitable foundation for frequent but small transactions.
Low transaction fees are vital to DEXes. According to the DeFi Report for January to June 2020 by TokenInsight, among the Top 20 DEX worldwide, Loopring, launched in February this year, attracted considerable attention. The reason is that it is built based on ZKRollup, whose Layer 2 solution has greatly reduced the transaction fee. Every transaction on Loopring only costs $0.0233, which is still 1000 times what costs on Zilliqa.
* PoW+PBFT consensus mechanism enables fast transaction approval
Every transaction on Bitcoin and Ethereum has to go through multiple approvals to become validated and recorded in a new block. Thanks to its consensus mechanism, once a transaction is processed by Zilliqa, it will have the highest approval pace.
In comparison with Ethereum, Zilliqa provides higher performance to solve the current problems of the high transaction fees and low speed, which makes Zilliqa a natural DeFi public chain.
Hard-core Feature №2: Zilliqa will provide the strongest support to Zyro
According to Zilliqa Planet, the biggest DApp on Zilliqa, it will be renamed as Zyro Wallet in order to assist the launch of Zyro. In the future, Zyro Wallet will function as the local wallet and provide users with asset management and governance supervision functions. Users will be allowed to hold and manage all ZRC2 tokens and ZIL assets in their Zyro Wallet. Zryo will become the most important and core section in the whole Zilliqa DeFi ecosystem.
（Source: Zilliqa official website）
In terms of market positioning, the Zswap on Zilliqa will inevitably conduct direct competition with Uniswap on Ethereum. Zilliqa will strive to provide Zswap with traffic and community foundation with the help of the whole ecosystem and community. Zilliqa Planet, a popular DApp with more than 40,000 monthly active users, will also inject seed users to Zswap, potentially increasing the conversion rate of token holders.
Hard-core Feature №3: Support for Zyro from a mature and vast asset system
For any asset platform, stablecoins play a unique role that is different from other digital assets. A stablecoin is a measurement, trading media, as well as an asset reserve tool for especially a decentralized platform.
From this point of view, Zyro has some natural advantages, thanks to its strong stablecoin brothers and sisters. XSGD first comes to our mind. XSGD is an SGD-pegged stablecoin issued on Zilliqa, which has already been used and promoted in many real-life scenarios in Singapore. Binance also issued its stablecoin BUSD on Zilliqa.
As a regular approach, Zswap will issue its own ZUSDT on Zyro protocol, and lock assets like ZBTC and ZETH into the related asset platforms. All these additional values will provide great support for Zyro in the future.
Hard-core Feature №4: The Whitelist and Insurance mechanisms on Zyro protocol
Risk alerts are ringing in this DeFi frenzy, as someone once commented: “DeFi is a typical Pyramid scheme and the scheme is approaching its final stage, as demonstrated by analytic models and the overall trend.” SlowMist co-founder Yu also expressed that Kimchi founders have excessive rights and they can mint tokens as they want.
The early DeFi field created a huge gold rush and is full of projects and investors who want to become overnight millionaires. However, opportunities always co-exist with risks, and those potential risks have led to much criticism of DeFi.
So, how to greatly protect the community’s interest, balance yields, and risks, and make the technology more scalable is some of the key challenges for Zyro to solve. Zyro proposed two solutions: Whitelist and Insurance mechanisms. The Whitelist mechanism can greatly reduce the chance of vicious actions, while the Insurance mechanism is able to protect users against a shrinking asset.
（The TVL of derivatives in the last two years. Source: TokenInsight）
The two mechanisms utilize technology and finance measures to make Zyro a new financial derivative, which is a unique project in DeFi field. Currently, various derivatives in DeFi ecosystem have a healthy competition among each other and have achieved growth together, as demonstrated in the TVL explosive increase. The ETH-based protocol Opyn has insurance option products, which provide great support for all DEXes and other protocols in the whole Ethereum ecosystem. Zyro will also launch a similar type of insurance products in the future.
Hard-core Feature №5: Application more friendly for mobile
The picture above is the data analysis for Zyro Wallet, which functions as a traffic entrance to Zyro. The 40,000 monthly active users make Zyro one of the most popular DeFi products.
Unlike cross-chain wallets like imtoken, Zyro wallet will focus greatly on Zilliqa DeFi ecosystem, and inject more vigor into various Zilliqa DeFi projects, including Zswaf (DEX), ZUSDT (Stablecoin), NFT, derivatives, etc.
Hard-core Feature №6: More ways to mine
The incentive mechanism on Zyro protocol was not only created for liquidity provision, but also for trading, promotion, and holding. In essence, liquidity is not only about volume, it also has the following aspects:
Transaction pace: the higher the pace of transaction, the better the market liquidity;
Trading price: the closer the price of the transaction is to the fair market price, the smaller the transaction slippage and the better the liquidity;
Market depth: market depth can be used to measure the market price stability. The greater the depth, the better the liquidity;
Trade elasticity: it is the speed of the price returning to the fair price after it deviates from the equilibrium level. The better the liquidity, the faster the price recovery, which is a result of good liquidity.
In terms of transaction speed, Zilliqa ecosystem has a certain degree of advantage. In terms of market depth and price, Zyro added trading mining and node mining on top of liquid mining, which is different from most ETH-based DeFi protocols. As a result, it will lock a certain degree of liquidity and increase the frequency of trading, while introducing the node governance to the community.
According to Zyro developers, Zyro will create DAO, where ZYRO holders will be able to vote on the proposals submitted by the community members with their tokens. Participants will mine ZYRO tokens by providing liquidity to Zswap, trading on Zswap, promoting Zyro, or merely holding ZYRO.
Many people believe DeFi is a crypto Lego, which composes various financial tools together. I think this is a great metaphor, but there is something behind that cannot be missed: we all know that building Lego requires drawings, which is the most ingenious design of the whole system.
In the future, the finance world will see the birth of one after another great DeFi Lego works. And there is a group of ambitious and ingenious designers behind.
Zyro — A DeFi Project in Zilliqa Ecosystem
Developed by core members from the Zilliqa community, Zyro is a decentralized protocol based on Zilliqa public chain, with ZYRO being its native governance token. ZYRO holders are able to participate in future planning and asset management for Zyro. Users are allowed to mine ZYRO by providing liquidity and trading on DEXes. They can also get ZYRO through successful referrals and becoming nodes. The underlying public chain Zilliqa adopted by Zyro greatly increases the transaction speed and reduces transaction fees, enabling a frictionless trading environment and the best battlefield for frequent traders.
Official website: https://zyro.finance
Contract address: https://viewblock.io/zilliqa/address/zil1ucvrn22x8366vzpw5t7su6eyml2auczu6wnqqg