Lightning mergers and acquisitions of three agreements, YFI founders interpret mergers and acquisitions, alliances and cooperation in the DeFi field (www.blockcast.cc)

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YFI founder Andre Cronje explained the recent merger and cooperation with Pickle, Cream and Cover agreements.

Written by: Andre Cronje, founder of yearn.finance Compiler: Perry Wang

In a world where decentralized finance is not composed of corporate structures, what do these terms such as mergers and acquisitions, alliances and cooperation mean, and what can we learn from the interactions so far?

Start with the definition of terms:

  • Merger : Two entities merge into one, especially a company.
  • Acquisition : The purchase or acquisition of an asset or subject matter.
  • Alliance : Two or more entities form an alliance partnership.
  • Cooperation : The act of working together to create something.

The interesting definitions described above all point to ownership in some way. What does ownership mean in a decentralized ecosystem?

Take Ethereum as an example. Who owns Ethereum? First look at the participants:

  • Miners (they decide whether to upgrade the software)
  • Developers (they build software for miners to use)
  • ETH holders (they are users of the system, but do not drive choice)
  • Founder Vitalik (absolute thought leader)
  • Ethereum Foundation (They help fund this ecosystem, but how much power do they have?)

It’s difficult to determine who owns Ethereum, isn’t it? But I personally tend to say that the combination of developers and miners is the real master. Now let us look at the interaction between Year and Ethereum.

Yearn is built on top of Ethereum, so this means combining two things. Yearn is connected to Ethereum, and Yearn and Ethereum work together to produce something. Yearn and Ethereum can be a cooperation, alliance, or a relatively low degree of merger. Why is it considered a merger relationship? Just because the construction of Ethereum developers does not promote the development of the year, and the builder of the year has no influence on the miners.

Let us now look at the governance agreement. Governance can be seen as miners who decide whether to upgrade the agreement. But what if there are no fundamental changes to the agreement?

Let’s look at the recent merger as a case study.

Pickle

There is a high degree of developer agreement between Pickle and Year. Both teams are studying farming revenue strategies. Usually the same strategy is adopted, so that the development forms duplication of work. From the perspective of development team integration, the merger of the two agreements is logical. Pickle core developers can focus on strategy, and Year can provide additional security, peer review, auditing, and discussion. The two development teams merged. Now we share the same group, integrate the same discussion, and focus on combining the ecosystem to become stronger. Pickle and Year are still independent brands, but development resources have been integrated.

Talents have been merged.

Cream

There is a strong synergy with Year. Income farming and Money Markets can work well together. Currency leverage can be used to increase income farming. Money markets are inherently leveraged. But there is usually a difference in vision between these two entities. We have seen that currency markets often have completely different target customer groups. Protocols such as Aave and Compound can be referred to as the lending market, which focuses on providing lending products to end users. The DyDx agreement also provides loans, but for the purpose of leveraged transactions. Therefore, although they are currency markets, their core interest lies in allowing users to use the market for transactions. Synthetix can also be seen as a loan market, but it has the core driving force of synthetic assets. Alpha Homora is a loan market but focuses on leveraged income. And all of these are the loan market.

Although the development teams do merge and use each other, this type is best categorized as two teams working together, looking forward to achieving a common goal, that is, the agreement reservation, the reservation service between the agreement and the agreement, and reduce its The proportion of the role of the loan provider. This design helps other protocols (such as Aave, Compound, DyDx, Synthetix and Alpha Homora) to obtain more funding without limiting their resources. The focus is on improving capital efficiency, rather than targeting the traditional loan market.

So let us classify the integration with Cream as cooperation and alliance. This is true even if the development team is really merged.

Cover

For insurance agreement Cover, I would like to summarize four areas of focus;

  1. Core insurance products, fixed-term products denominated in stablecoins, are linked to a series of agreements (specifically variable).
  2. The agreement predicts the market and predicts the perceived risk of the agreement being exploited.
  3. Perpetual contract (or as I personally call it: Lazy Contract) insurance serves users and agreements who simply want to set aside a portion of their reserves to hedge their risks.
  4. Insurance as a service, providing any token to become the support of its own ecosystem, allowing tokens to imitate the products in 1 and 3, using its own token as a catalyst.

Although Yearn provides security, review and audit channels for all 4 projects mentioned above, it is particularly focused on the cooperation between 3 and 4, because 4 makes YFI its own insurance ecosystem, and 3 allows the machine gun pool to get the cost from the proceeds Insurance, no need to occupy the user’s expense in advance. The return has been reduced, but the risk has been hedged.

The same is true for the collaboration with Cream. This collaboration is closer to the consistency of goals and results, sharing development resources.

in conclusion

After I was lucky enough to participate in the relevant negotiations, I have to say that as for whether these actions are mergers, acquisitions, alliances or cooperation, I can’t get accurate answers like everyone else. The simple answer is: every joint is similar. The merger of teams, mutual use of agreements, coordination of all team members and sharing of vision are what I think is different from previous practices. Decentralized finance allows us to cooperate and coexist while still remaining independent individuals.

I don’t know what to call these joint operations, but I am absolutely very excited about it.

Source link: andrecronje.medium.com

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