It was not until this week that the BCH community issued a message that "BCH will support the first DeFi application."
With the explosive growth of the number of DeFi protocols, the public chain has once again realized that the biggest opportunity for the public chain is still the application. In the wave of DeFi, the response speed of the old public chain is fast or slow.
When the Ethereum ecological DeFi project is growing rapidly, the community impact, user ecology, and infrastructure construction that DeFi can bring is very eye-catching. In this case, the combination of BCH and DeFi seems to add a sense of helplessness.
Since 2020, BCH has experienced halvings, standoffs, forks and other events. The performance of BCH, once known as the "Prince of Bitcoin", is not dazzling in the market.
At the same time, for most public chains, 2020 will not be considered unsuccessful.
(Data source: coinmarketcap)
"Declining Nobles" BCH
BCH in 2020 will not be too frustrating.
As early as February this year, the BCH community disputes sounded again.
The long-standing controversy surrounding BCH development funds also broke out publicly after BCH ABC announced an "IFP plan" (Infrastructure Financial Plan).
This plan requires miners to share 8% of their income to their technical team as a development fund, intensifying conflicts between overseas communities, and the response is strong. Subsequently, under the leadership of the early BCH developer Freetrader, the new camp BCH Node was quickly established.
The contradiction has fermented several times, and the fork is inevitable. On November 15th, BitcoinCash (BCH) conducted a semi-annual fork, and finally moved towards a hard fork due to disagreements in the community.
After the concept of "forked coins" was once again put in place, the community discussed this fork fiercely, but the market ultimately showed mediocre response to the market value of BCH. BCH rose by only about 6% the day after the fork. At the same time, LTC rose 24% in these two days, and its market value directly surpassed BCH.
Another benefit of BCH 2020 that the community is looking forward to is the "halving". At the beginning of the year, the halving concept was once a smash hit in the community, which bears the expectations of many people for the new year of BCH.
The community ushered in the first halving of BCH tokens on April 8, 2020. In this halving, BCH once rushed to 280 U, but then there was a wave of decline, and the overall performance did not fluctuate much. In contrast, BSV, which also has the concept of halving, soared by 20% in a short period of time and exceeded 200 U, which seems to steal the limelight of BCH.
In the second half of 2020, DeFi entered the entire industry with a very strong posture, and DeFi applications on Ethereum began to explode, which caught most public chains including BCH by surprise. When the top exchanges have embraced DeFi through the "means" of the public chain in turn, the well-known established public chains have been slow to "get on the car".
(Data source: defipulse)
Not to be outdone, BCH participates in DeFi
This week, there was new news from the BCH community.
The latest information from BCH enthusiast BruceLee from overseas stated that BCH’s first DeFi application, detoken, will be launched soon. The application is called "a Dex with automatic market making". The white paper for the application was officially released around December 20 .
When encountering the concept of DeFi with its own heat, many people regard this as the reason why BCH has exceeded 20% recently.
In the conversation between Blocklike and BCH enthusiast BruceLee, he put forward this point of view: "BCH develops DeFi not to simply pursue hot spots, but to avoid backwardness and enhance competitiveness. DeFi has a long way to go, and everyone is now just started."
Frankly speaking, BCH's follow-up speed in the DeFi field is relatively slow. BruceLee explained this: "Because it is more difficult to develop smart contracts on the UTXO-based blockchain. This is just like 2018 when the BCH community negotiated Develop the Token function, and many people say that IXO is cold, what is the point of developing this. But we see that Token has become a standard feature of almost all new chains. Although BCH is late, after two years of development, Token transfers have become one of the biggest applications of BCH".
"BCH is a UTXO-based blockchain. Unlike ETH, you can develop any function you want. But BCH's DeFi also has its own unique advantages," he mentioned.
The sight has returned to the technical level of the BCH public chain. From this perspective alone, BruceLee still carefully elaborated on Blocklike some of the potential advantages of BCH in DeFi:
First: high security.
On a blockchain with an account structure, such as ETH, all funds are placed in the same smart contract, and all users (including hackers) can perform various interactive operations with this smart contract. This model has great security risks. In addition, because all players' funds are stored in one contract, the larger the amount of funds, the more it can attract the attention of hackers, and the stronger the motivation for attacking.
And anyhedge is based on BCH deployment, using the advantages of BCH's UTXO architecture. Every anyhedge smart contract has a dedicated address (it looks similar to a multi-signature address), and each contract is independent of each other and has no relationship to each other. This will directly prevent everyone from concentrating all funds on one address, which will arouse hackers' interest. If there are loopholes in the contract code, nothing will happen, and ordinary users can transfer funds to the new contract address (security patch).
Since only the two parties in each contract can use the funds in it, even if the hacker knows that your contract has loopholes, he cannot take the funds. Unless, your contract counterparty happens to be a hacker, and even if he succeeds, the affected contract will only occupy a small part of all contracts.
Second: lower handling fees.
When ETH was popular in DeFi before, everyone saw a handling fee of several dollars and dozens of dollars, while the handling fee of BCH was less than 1 cent.
Third: Good liquidity.
As the top mainstream currency in market value, BCH is listed on almost all exchanges, so it has good liquidity and is very suitable for DeFi.
Obviously, this kind of favor for DeFi's "lateness" is very optimistic in BruceLee's eyes:
"BCH's DeFi application is the result of years of hard work in the BCH community. DeFi is a broad concept, but most defi applications involve the problem of obtaining off-chain asset quotes (that is, oracle). Bitcoin was not able to do it initially. At this point, BCH added op_checkdatasig, a powerful opcode in the November 2018 upgrade, so that BCH can read oracle data, and has since laid the foundation for BCH’s DeFi. Then after two years of development, we I was able to see the first DeFi realized by BCH.
(White paper published on November 18)
He also said: "I am very optimistic about BCH's first DeFi application, anyhedge, because this application can help BCH implement closed-loop payments. As we all know, BCH's signature is peer-to-peer electronic cash, which focuses on payment. But it is promoting payment. In the process, the development is very slow. The biggest obstacle is that although many merchants accept BCH payments, on the user side, non-investment users will not hold such highly volatile coins for daily payments (all cryptocurrencies) All have this problem). And the design of anyhedge allows users to completely eliminate the risk of price fluctuations. For example, you deposit $100 worth of BCH in the anyhedge contract, no matter how the price of BCH fluctuates, you can always come up with $100 worth of BCH. In this case, the obstacles of BCH on the user side are completely eliminated."
However, some community enthusiasts still seem to have insufficient confidence in BCH. Some commented that "the white paper is only now, and it is estimated that it will be a few months after the actual launch."
Others think: "BCH is not saved by a DEX after two forks."
After the ``first year of the public chain'' 2018
According to defipulse data, as of December 25, the lock-up amount of DeFi applications reached USD 13.43 billion for the first time.
Although Ethereum is also considered to have an urgent need to solve the expansion problem, after years of accumulation, its complete chain financial system has gradually formed a DeFi barrier.
Looking back at the entire year 2020, the entire DeFi sector has jumped out of the framework of the old project competition, opened up new markets outside of the digital currency and public chain themes, and more pioneering smart contracts have been created. This wave of DeFi has undoubtedly created new challenges for the public chain projects that fired in 2018.
Because DeFi also has higher requirements for community consensus, network infrastructure, and ecology. Despite the slow progress and obvious shortcomings of some public chains, they still choose to try in the direction of DeFi one after another, and the reason is sometimes simply that they cannot fall behind.
Has the era of established public chains passed?
A more rational view of a developer from the community is: "Whether the public chain era has passed, we still need to see whether the cross-chain breakthrough. The choice of a project: A joins ETH to make DAPP; B joins Polkadot to make parallel Chain. At present, it seems that their shortcomings are as follows, of course, they are all evolving and cannot be said to be dead. The shortcomings of A: cannot control the cost of using GAS; the shortcomings of B: increase the threshold for users. For example, you are a developer, Which chain would you choose to develop your application?"
What can be seen at present is that the "First Year of DeFi" in 2020 may have surpassed the "First Year of Public Chain" in 2018. As the industry continues to iterate, traditional institutional funds enter the market and the public chain track Whether the old stars of China can use their own advantages to seize new opportunities in the new stage, we still need to observe and wait together.
some articles quote to:
https://cointelegraph.com/news/bitcoin-cash-hard-fork-battle-who-is-winning-the-hash-war
https://github.com/diegorod/WillMcAfeeEatHisOwnDick/issues/6