PRESS RELEASE
Published on August 21, 2023
Since the birth of DeFi, we have been discussing decentralization and security, and Satoshi Nakamoto’s hopeful phrase, which embodies the spirit of blockchain, has gradually become a reality as DeFi has steadily grown. Ultimately, however, DeFi has always been about making profits and making most of the liquidity profitable. This is the main practical problem that DeFi is currently facing.
After the DeFi summer, users are no longer crazy about altcoins that promise exceptionally high returns. To achieve this, true DeFi projects need to have massive liquidity and provide significant and stable revenue. It’s more akin to traditional financial investing, where top projects can yield over 20% annual returns to billions of dollars. This is the kind of profit model that DeFi is known for and people accept.
But in today’s environment, where large projects continue to fail and liquidity continues to dry up, without the existence of aggregators, many small projects would have little chance of surviving, let alone generating significant returns. The market also seems to have given these projects little chance of recovery. In such a situation, DeFi is now deep in financial distress.
As a decentralized or even blockchain business card, there is no doubt about the importance of DeFi. Of course, there are countless projects that make improvements and fixes. This article will change the perspective and use the L7 DEX decentralized perpetual contract platform to scale from established projects to new ones. Let’s see how these emerging derivatives are tackling the problem and solving the DeFi liquidity crisis in their own ways.
Start from the roots and optimize liquidity.
There are many reasons for DeFi liquidity to dry up. From an outside perspective, yields on traditional financial assets such as US bonds and stocks have risen steadily over the past two years, at times topping a 5% yield curve, which has led to more assets being moved back into the real world for profit. From an internal perspective, the shrinking returns of DeFi itself should not be underestimated. According to data from DeFi Llama, DeFi yields have fallen to a record low of 2%, which is even lower than bank deposit rates. For most participants, this is almost unprofitable. Therefore, by their very nature, users are no longer willing to take more risks and get lower returns compared to traditional financial assets.
The key to solving this problem lies in restoring user trust, increasing their enthusiasm to participate, and providing them with more viable and reliable profit models. To achieve this, L7 DEX has pursued a three-pronged strategy: Leveraging NFTs and an efficient economic system to ensure a continuous source of liquidity and create deeper liquidity pools; Continuous innovation of mechanisms to ensure stable growth of platform and user profits; Extending the platform by leveraging liquidity and IEO to encourage diversification of revenue streams.
NFT+ economic system that ensures a continuous flow of liquidity
DeFi liquidity depends on the deployment and collaboration of participants. To encourage global participation, L7 DEX does not adopt the traditional community management and organizational structure used by traditional DeFi projects. Instead, a more creative approach is taken, aligned with current Web3 user habits: combining NFTs with an efficient economic system.
In the early stages of the project, L7 will use DEX NFTs as pass cards and deployment tokens. Users who own NFTs automatically become part of the early community. These NFTs are also key elements for earning rewards early. After staking the NFTs, users can make profits. Due to the deep integration with the economic model, users using NFTs will also receive LSD platform tokens based on time weighting and NFT attributes. This is an important way to acquire L7 DEX platform tokens in the early stages.
Combined with an effective community recommendation mechanism, this system of goals, revenue generation and community engagement has brought a significant amount of liquidity to L7 DEX and has become an important support for its development.
Technological innovation, stable profits
“Making money” cannot be separated from technological breakthroughs and product innovation, especially for a decentralized derivatives platform. As L7 DEX continues to develop its community, it also focuses on technological refinement and the innovative introduction of low slippage, high aggregation, and a more stable PvP AMM mechanism as key elements for perpetual contracts. This successfully avoids and solves the current problems in the DEX market with perpetual contracts, such as: B. Difficulty placing orders, shallow depth, poor stability and inconvenient operation.
The established community will be the first to use contract products. This can not only solve the problem of lack of early users that most new projects face, but also provide a better testing environment for the product. In addition, significant transaction fee income will be generated in the initial phase of product launch, which ensures that the three parallel product lines can provide a more stable revenue stream for the platform and users. At the same time, innovative products will attract more users to join the community, ushering in a new development path.
Aggregate Assets, Strengthen Web3
The platform tokens of most DeFi projects are used almost exclusively for governance and lack functional and effective applications. In L7 DEX, this phenomenon is changed by Liquidity + IEO, making LSD a truly application-oriented and valuable aggregate asset, thereby solving the current problem that DeFi assets lack effective value support.
In the mid-term development of the platform, users have earned a significant amount of LSD through NFT wagers and Liquidity wagers. At this point, various methods such as project buybacks, stake governance, and leveraging the economic model itself have effectively achieved LSD deflation. However, this does not solve the problem of the continued increase in the LSD circulation, nor can it add any more practical value to LSD.
To solve these problems, L7 DEX first focuses on liquidity and cooperates with existing high-quality Web3 projects in the market to set up farm mining pools. This deepens collaboration and provides users with more profitable opportunities. In order to participate in these projects, users must use LSD as a core asset and add it to the liquidity pool. The cooperation projects themselves also have to pay or use more LSD in order to obtain further expansion opportunities. This combination not only greatly improves the circulation efficiency and utilization of LSD, but also naturally achieves effective depletion of LSD in various practical applications.
One way to truly tokenize LSD and maximize its distribution is through the IEO (Initial Exchange Offering), which involves investing in and promoting a large number of quality Web3 projects. This helps maximize the spread of LSD through continuous investment and efficient turnover, making LSD a platform asset like ETH and BNB. This approach aims to maximize consensus and liquidity, and also solves the problem that users cannot earn high returns with DeFi.
Waiting for a bull market isn’t the only solution.
Viewed from the outside, different narratives emerge and different hot topics come and go, seemingly suggesting that there is no other way to address DeFi’s woes other than waiting for a bull market. However, through a simple understanding of L7 DEX, through continuous innovation of various derivatives, we can still break through one by one in terms of user, product, scalability, and yield combination, transforming this DeFi defense battle from passive to active. The core meaning of DeFi’s existence is to generate revenue for users, especially the majority of users. Under this goal, projects that are no longer separated from users and no longer idle will build a real Web3. Further projects like L7 DEX will take the hope hinted at in “The Times 03/Jan/2009 Chancellor on brink of Second Bailout for Banks” no longer into the distant but into an attainable future.
media contact
Company Name: L7 labs
Contact person: Lucas
E-mail: Send e-mail
Country: United Arab Emirates
Website: www.l7dex.finance
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