Thread: Why The $DEUS/ $DEI Ecosystem Is One The Most Exciting And Ambitious Projects In Defi
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Its very possible you haven’t heard of it… but some major gigabrains are quietly building something quite astounding on Fantom…
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Its very possible you haven’t heard of it… but some major gigabrains are quietly building something quite astounding on Fantom…
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This is what I’ll refer to as the $DEUS/ $DEI Ecosystem, though that designation doesn’t do it justice.
Think of it more like $TERRA/ $LUNA + synthetics + oracles, all on a supraphysiological dose of defi testosterone.
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Think of it more like $TERRA/ $LUNA + synthetics + oracles, all on a supraphysiological dose of defi testosterone.
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I will be honest that a lot of the math and tech behind it is beyond me… and its very possible this thread + #FrenchChart might have some mistakes in it... but I wanted to do a very in-depth thread describing it all as best as I could.
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To start, the whole thing appears to primarily be the brainchild of @lafachief though he also seems to have assembled quite a team of smart folks alongside him…
At the foundation of the ecosystem are $DEUS and $DEI.
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At the foundation of the ecosystem are $DEUS and $DEI.
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$DEI is a partially-collateralized algo-stablecoin, utilizing 80% USDC and 20% DEUS. So essentially $DEUS is burned/printed when $DEI is minted/redeemed.
This is roughly similar to $LUNA and $TERRA ($UST).
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This is roughly similar to $LUNA and $TERRA ($UST).
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$DEI and $DEUS are at the heart of the ‘Deus DefiX’ (“decentralized financial information exchange protocol”)… which serves as a foundation layer money-lego, where all sorts of synthetic assets can be created/traded/collateralized/used for building/etc.
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Utilizing the ecosystems infrastructure requires the use of $DEI/ $DEUS, creating a use case for the two tokens beyond just serving as a stablecoin and governance token.
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The idea is that eventually all sorts of third parties will build upon this foundation layer, interacting with Deus DefiX and the rest of the ecosystem.
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Right now a connected project (also by Lafa and co), @dsynths, is the primary protocol utilizing the infrastructure.
@dsynths is a synthetic trading platform where you can buy and sell synthetic versions of popular stocks, commodities, and even other cryptos.
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@dsynths is a synthetic trading platform where you can buy and sell synthetic versions of popular stocks, commodities, and even other cryptos.
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Long-term followers of my account (well, since I started it in December) will know that I am VERY bullish on synthetic platforms… and think they and stablecoins will be the next two big ‘themes’ that dominate crypto.
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Some other synthetic platforms I really like are Mirror Protocol, Float Capital, and Gains Network.
They each have very different and very interesting ways of achieving the trade of synthetic assets that are helpful in understanding @dsynths by way of comparison.
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They each have very different and very interesting ways of achieving the trade of synthetic assets that are helpful in understanding @dsynths by way of comparison.
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To really simplify it...
-Mirror essentially relies on LP’ing, paying farming rewards to people for holding/farming various synthetic assets.
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-Mirror essentially relies on LP’ing, paying farming rewards to people for holding/farming various synthetic assets.
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-Float Capital uses a really cool system where each asset can be longed or shorted, and depending on demand, one side will pay funding costs and the other will receive those funding costs as APR.
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-Gains Network is a leveraged synthetic trading platform that I did thread on last month, which essentially relies on lev traders averaging negative returns, plus internal rules/gigabrainage built into the protocol to avoid excessive losses (cont.)...
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...with rewards paid out in $DAI coming from the burning/minting of the protocol token $GNS.
Of the three, I would say that @dsynths appears to be most similar to Gains Network (though they’re still very different).
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Of the three, I would say that @dsynths appears to be most similar to Gains Network (though they’re still very different).
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@dsynths requires users to open positions using $DEI, and also uses $DEI to pay out profits.
In this way opening a trade is fully collateralized (I pay $100 in $DEI to open a $100 gold long or TSLA short, etc), and if I lose money on the trade then (cont.)...
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In this way opening a trade is fully collateralized (I pay $100 in $DEI to open a $100 gold long or TSLA short, etc), and if I lose money on the trade then (cont.)...
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...I just don’t get back all of my $DEI when I sell it (e.g. if my trade goes down 10% I’d only get $90 $DEI when I sell it).
If I make a profit then I’d get more $DEI than I put in.
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If I make a profit then I’d get more $DEI than I put in.
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So, the main danger is that some trader makes a massive, gigantic profit, and ‘bankrupts’ the protocol. However it appears that this is prevented by- to really dumb things down- a wicked smart super-computer/algorithm thing meant to ensure this can’t happen.
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Essentially the @dsynths backend constantly scans all open positions in real time, constantly stacking them on top of one another in terms of liquidation order.
Here are some quotes from the whitepaper (link at end of thread) (+ screenshots from the whitepaper embedded):
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Here are some quotes from the whitepaper (link at end of thread) (+ screenshots from the whitepaper embedded):
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“A purely peer-to-peer version of bilateral agreements allows for digitized derivatives to be cleared directly between one party and another in a trustless way. Decentralized threshold-signature-based oracles provide part of the solution by verifying the agreement...
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...at any given time by economic-driven third party market observers."
..."We propose an n-dimensional “request for Quote” based marketplace…. Anything with a data point can be traded.”
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..."We propose an n-dimensional “request for Quote” based marketplace…. Anything with a data point can be traded.”
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...“A global “peer-to-peer Bilateral Agreement System,” based on the name of its traditional finance predecessor, “Bilateral OTC derivatives.””
All of the above brings us to the final piece of this fascinating ecosystem, which is @muon_net.
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All of the above brings us to the final piece of this fascinating ecosystem, which is @muon_net.
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@muon_net is the custom oracle system that @lafachief and co built, which has been spun off as its own protocol with its own token.
Muon is what constantly checks all the various data sources to determine what is worth what and everything else.
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Muon is what constantly checks all the various data sources to determine what is worth what and everything else.
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