If the items, places, and messages from those building DeFi are any indication, DeFi is certainly a wonderful place to look for investment opportunities. Maybe you’ve heard of individuals getting rich on early investments in Bitcoin and Ethereum, receiving over ten percent interest using DeFi lending protocols, or developing their own unique investment opportunities using various DeFi legos.
If you’ve ever been interested in terms like staking or decentralized lending or wondered what kind of tokens the DeFi community finds useful, we’ll cover the fundamentals of DeFi investment opportunities and so dive into the do’s and don’t’s of investing with DeFi. But to remember, it’s information purpose only and not financial advice.
Oikos, An Initiative to Bring Key DeFi Applications to the Tron Network
Oikos is a decentralized synthetic asset issuance protocol built on Tron. These synthetic assets are collateralized by the Oikos Network Token OKS which when locked within the contract enables the issuance of synthetic assets or Synths.
This pooled collateral model enables users to perform the conversions between Synths directly with the smart-contract, avoiding the necessity for counterparties. This mechanism solves the liquidity and slippage issues experienced by DEX itself. Oikos currently supports synthetic fiat currencies, cryptocurrencies long and short, and also commodities.
OKS holders are incentivized to stake their tokens as they’re paid a pro-rata portion of the fees generated through activity on Oikos Exchange, based on their contribution to the network. it’s proper to participate within the network and capture fees generated from Synth exchanges, from which the worth of the OKS token comes. Trading on Oikos Exchange doesn’t require the trader to hold OKS token.
Synth Pegging Mechanism
The Synth peg is critical to a well functioning system because traders require both liquidity and stability between a Synth/s and other crypto-assets so as to require profits from trading. Some of Synths trade on the open market, so it is possible for them to fall below par with the assets they track. Incentives are required to confirm that deviations from the peg are minimal which actors are motivated to correct them.
There are three methods to keep up the Synth peg like the Arbitrage. OKS stakers have created debt by minting Synths, so if the peg drops they’ll now profit by buying sUSD back below par and burning it to scale back their debt, because the Oikos system always values 1 sUSD at 1$ USD.
Then also the sTRX liquidity pool on Oikos Swap. Each week, every a little of the OKS added to the overall supply through the inflationary monetary policy is distributed as an award to people providing sTRX / TRX liquidity on Oikos Swap. This has incentivized liquidity providers to collectively create the most important liquidity pool on Oikos Swap at the time of writing, allowing traders to get Synths to begin trading or sell Synths to require profits.
And last but not least OKS auction. Oikos is currently trialing a brand new mechanism with the dFusion protocol from Gnosis within which discounted OKS is sold at auction for TRX, which is then wont to purchase Synths below the peg.
Oikos has already delivered one of the foremost complex and useful protocols built on Tron thus far. But the potential for censorship-resistant synthetic assets continues to be largely untapped. Further improvements to the mechanism yet as functional upgrades and new Synths are going to vastly increase the utility of the platform. The movement to a decentralized governance process will reduce systemic risk and increase the long-run viability of the project.
- My Bitcointalk username: Batx_9999
- Link to Bitcointalk Profile: https://bitcointalk.org/index.php?action=profile;u=2264046
- Telegram: t.me/jtaccount2