Fundamental Insights Weekly
Infrastructure
Aurora announced that it was integrated Chainlink Price Feeds into its Layer2 EVM solution. The integration of Chainlink Price Feeds will allow developers to connect their smart contracts with high-quality price data and support for DeFi use cases. The result is Ethereum based DeFi projects will be able to migrate onto NEAR blockchain seamlessly and keep using the oracle infrastructure that they already trust, and benefit from the low gas fee on Aurora.
Aurora is an Ethereum Virtual Machine on the NEAR blockchain. It offers a solution for developers to operate their DApps on an EVM-compatible, high-throughput, scalable, platform, with low transaction costs. One of the most crucial things of infrastructure needed by DApp developers who build applications on Aurora is a secure and reliable connection to off-chain data and resources, particularly price data for DeFi. Chainlink is the industry leader in secure oracle solutions. By integrating Chainlink Price Feeds into Aurora, Ethereum-based dApps currently using Chainlink Price Feeds can be deployed on Aurora without any modifications. Meanwhile, Chainlink Price Feeds will be able to update at a higher frequency due to Aurora’s high throughput and low fees. The integration will make it easy for Ehtereum users to enter the NEAR ecosystem.
DeFi：
Credit-lending is the holy grail of the lending sector in DeFi industry for its high capital efficiency. Capital efficiency is the eternal theme of finance. However, most DeFi protocols apply to the over-collateralized mechanism to make sure of security, for it is difficult to avoid default events in on-chain environment. It sacrifices capital efficiency.
The largest obstacle for credit lending projects is that it is difficult to set up a credit system based on address. People may have multiple addresses and it is easy to drop an address when people take a loan on it. However, NFT has the characteristic of exclusive instead of the address. It seems not impossible to build a credit system based on a particular NFT.
Apparently, ENS would be the best choice to be the ID of the credit system. It is not only extremely readable but also can be bound to the address easily. In fact, as long ago as Apr of 2020, someone borrowed money firstly with the collateral of ENS. It is a very good test.
The credit loan sector is still weak at this moment. We look forward to a large and long-term development in this sector.
Gamefi
DeFi has experienced explosive growth over the past two years, and the entire DeFi ecosystem now has a TVL of over $270 billion. DeFi has achieved two important things in the past two years. One is the completion of the decentralized financial infrastructure, which provides a reliable base component for other kinds of DApps. The second is that liquidity mining has achieved early distribution of project Tokens while completing the cold start of the project through Token incentive.
While liquidity mining enables Token distribution scenarios, Token consumption scenarios are rare in DeFi. Generally speaking, Tokens in the DeFi protocol are mostly used to governance protocols and are not consumed much, so usually, after a project finishes liquidity mining, the price will be adjusted back significantly.
Games are a consumption-oriented field in the traditional Internet era, and most players play games for the purpose of consumption and amusement. From the perspective of the Token usage scenario, DeFi can realize Token distribution and the game can realize Token consumption. Therefore, the future volume of Gamefi, as a combination of game and DeFi, is much larger than the existing DeFi, which decentralizes the financial infrastructure of Gamefi and provides a more secure and reliable underlying facility for games. NFT enables the real privatization of assets in Gamefi, and provides the possibility of composability of games.
In short, Gamefi will create a bigger market after combining various elements such as games, DeFi, and NFT, and will really open the door to Web3.0 and Metaverse.
