How does Daniele conquer the DeFi world? Let's take a look at the "Daniele Trio."

Original Title: "The 'Daniele Trio' Conquers Three Major Scenarios in DeFi"

On January 4th, Rune Christensen, the founder of the decentralized stablecoin application Maker DAO, expressed some anger on social media, publicly accusing the popular blockchain Terra (LUNA) supported stablecoins UST and MIM of being a "Ponzi scheme." This statement sparked intense discussions within the crypto community.

Some voices believe that the market capitalization of the UST and MIM stablecoin projects threatens MakerDAO's DAI's leading position in the stablecoin market, which led to Christensen's harsh remarks. UST, as a stablecoin on the Terra chain, is already well-known in the market. But could the less than one-year-old MIM also pose a threat to DAI?

According to Coingecko data, the current market capitalization of UST is $10.3 billion, MIM is $4.5 billion, and DAI is $9 billion. UST's market cap has surpassed DAI, and MIM has already captured half of DAI's market cap.

As a stablecoin generated within a lending protocol, MIM has not yet shown its prowess compared to UST, but Christensen's comments have drawn market attention to this stablecoin created in May 2021, whose founder is Daniele Sestagalli, known for creating multiple DeFi protocols and being active on Twitter, mostly discussing DeFi-related topics.

In 2021, Daniele built several DeFi applications, as indicated by his Twitter signature "Occupy DeFi," conveying the intent of "occupying DeFi" through his actions. These applications include the DeFi yield manager Popsicle (ICE), the lending application Abracadabra Money (SPELL + MIM), and the algorithmic stablecoin Wonderland (TIME).

According to the data aggregation site DefiLlama, the total value locked (TVL) in the Abracadabra Money application is currently $6.15 billion, placing it among the top 15 DeFi applications listed on the site. The treasury managed by Wonderland has a fund size of $850 million, while Popsicle manages nearly $200 million. At its peak, the three applications managed over $10 billion in assets.

These three projects are referred to as the "Daniele Trio," covering three mainstream scenarios in DeFi: lending, asset management, and stablecoins. This issue of DeFi Hive will outline Daniele's representative applications in the DeFi field, giving a glimpse of how he conquers territories in the DeFi world.

LP Asset Yield Manager Popsicle Finance

Introduction

Popsicle Finance (ICE) is Daniele's first DeFi project, initially built on the Fantom and BSC chains, classified as a cross-chain yield optimization application, commonly referred to as a "yield farm." It has since been deployed across multiple chains, operating on Ethereum (ETH), Fantom (FTM), Binance Smart Chain (BSC), Polygon (MATIC), and Avalanche (AVAX), with plans to support other Ethereum Virtual Machine (EVM) compatible blockchains in the future.

Currently, the coexistence of multiple chains has spawned various DeFi applications. For users earning yields by providing liquidity, funds need to switch between different applications on the same chain, and sometimes even cross chains. This cumbersome operation, coupled with high on-chain transaction fees, creates significant friction costs. Users urgently need an application to enhance liquidity reward earnings across different chains.

The team led by Daniele has pinpointed this pain point and built the cross-chain yield optimization application Popsicle, allowing users to provide liquidity on any chain at any time to improve the yield and capital efficiency for liquidity providers. It analyzes DEX liquidity pool data across multiple chains to identify the liquidity reward pools with the highest yields, then automatically allocates users' LP funds to the most profitable liquidity pools to maximize their profits.

Providing cross-chain liquidity is not the ultimate goal of Popsicle; its ambition lies in enabling users to access various DeFi applications across different chains through the platform. Whether users are active on Ethereum or BSC, the application serves as the endpoint, aiming for users to focus on yields rather than chains.

Popsicle Official Website

Operational Mechanism

After receiving liquidity providers' assets, Popsicle automatically compares the liquidity pools of different AMM mechanisms across multiple chains to select the optimal yield strategy for users, then automatically deploys users' LP funds into the best-performing liquidity pools.

The component that enables automatic deployment is called Sorbetto, which is a yield optimizer. Users only need to deposit their crypto assets into it; thereafter, these assets will be allocated to various DEX liquidity pools for pairing, forming LPs. Sorbetto will monitor the yield rates in the liquidity pools and adjust these positions to maximize yield and capital efficiency.

Sorbetto mainly consists of two products: the V3 optimizer "Sorbetto Fragola" and the multi-chain optimizer "Sorbetto Limone."

• V3 Optimizer Sorbetto Fragola ------ This product is primarily developed for Uniswap V3 liquidity providers, addressing the issue of users needing to set and choose LP price ranges based on yield strategies themselves. Users simply need to choose to store their LP funds in Fragola, and the tool will optimize the LP price range based on historical asset volatility, set strategies, and adjust LP fund yields, simplifying the user's rebalancing actions, saving GAS fees while achieving optimal yields.

  Additionally, after depositing LP assets into Fragola, users will receive a PLP certificate, which reflects their position in the Popsicle application.

Popsicle V3 Yield Optimizer's Asset Yield Status

• Multi-Chain Optimizer Sorbetto Limone ------ Essentially a liquidity aggregator, it can automatically maximize the trading fees earned by liquidity providers. Users only need to deposit crypto assets into this tool without manually checking the trading fee rates and rewards of DEX liquidity pools. Limone will automatically calculate and set strategies to help liquidity providers earn trading profits.

ICE is the governance token of the Popsicle application, with a total supply of 67 million, primarily used for voting on community proposals. Currently, users can stake ICE to receive nICE, as the yield optimizer Sorbetto will distribute a portion of the product profits to nICE holders.

In the future, Popsicle will also launch a lending product called Gelateria, which will support LP Tokens or PLP Tokens from liquidity providers as collateral to borrow other assets for additional earnings. In this way, Popsicle has derived a DeFi application that integrates "asset yield management" and "lending" by optimizing LP funds in DEX liquidity pools.

Lending Application Abracadabra Money Born for Yield-Generating Assets

Introduction

Abracadabra Money (SPELL) is a multi-chain lending application created for yield-generating assets. Initially built on Ethereum, it has now been deployed across multiple chains, including BSC, Arbitrum, Avalanche, and Fantom.

Abracadabra Money Official Website

"Yield-generating assets" can be simply understood as those assets that can generate interest income in DeFi applications, typically derived from the locking of native application assets. You can think of it as a deposit certificate or receipt obtained from locking native assets, and some refer to it as the tokenization of "yield bonds," such as:

• nICE ------ It is obtained by locking ICE in the Popsicle application, and holders of nICE can receive a share of the profits from the Popsicle platform;
• xSUSHI ------ It is obtained by locking SUSHI in SushiSwap, and holders of xSUSHI can receive periodic dividends from SushiSwap trading fees;
• yvVault assets ------ It is a collective term for yield-generating assets like yvYFI, yvUSDC, yvUSDT, yvWETH, which are the locking certificates for the liquidity pools of YFI, USDC, USDT, WETH, etc., in the yield farm application Yearn V2. Holding yvVault allows users to earn yields from the corresponding liquidity pools on Yearn V2.

Before the launch of Abracadabra Money (hereinafter referred to as Abracadabra), holders of yield-generating assets could only periodically receive income dividends from locked assets or exercise voting governance rights. However, since yield-generating assets do not support market circulation or trading, these locking certificates could only sit in users' wallets, unable to be utilized efficiently.

The Abracadabra application aims to "release the liquidity of these yield-generating assets," helping holders of yield-generating assets improve the utilization of their assets.

Operational Mechanism

Users can deposit yield-generating assets into the Abracadabra application and then use these assets as collateral to mint the stablecoin MIM (Magic Internet Money). MIM is a stablecoin pegged to the value of the US dollar and can be exchanged with other stablecoins like USDT, DAI, and USDC in various DeFi applications.

The amount of MIM obtained depends on two factors: the value of the collateralized yield-generating assets and the maximum allocation assigned to that yield-generating asset.

For example, if Xiao Ming has yield-generating assets yvYFI worth $10,000 and urgently needs $1,000, but believes the price of YFI will rise in the future and does not want to disrupt the yield from yvYFI on Yearn, he can collateralize yvYFI in the Abracadabra application to mint 1,000 MIM, and then exchange this 1,000 MIM for $1,000 USDT on a stablecoin exchange protocol like Curve. Once his funds are back in order, he can redeem the 1,000 MIM debt and retrieve the original amount of yvYFI. If he does not repay, the Abracadabra application will deduct an equivalent amount of yvYFI from his account.

By allowing users to collateralize yield-generating assets to borrow the stablecoin MIM, Abracadabra expands their use cases and releases the liquidity of yield-generating assets.

Abracadabra has issued the application token SPELL, with a maximum supply of 21 billion. Users can stake it in Abracadabra to receive sSPELL. Holders of sSPELL can vote on which yield-generating assets can be listed on the application and can also vote on the application's lending rates, liquidation rules, etc. Of course, like many yield-generating assets, holding sSPELL also allows users to receive income dividends from the Abracadabra application.

The liquidity released by Abracadabra is likely a source of TVL for many of Daniele's DeFi projects.

A Basket of Algorithmic Stablecoins Wonderland

Introduction

Wonderland (TIME) is the first decentralized reserve currency application on Avalanche, aiming to create a freely floating reserve currency TIME supported by a basket of crypto assets through a specific algorithm.

Wonderland is actually a fork of another algorithmic stablecoin OlympusDAO (OHM) and is part of a series of projects by Daniele and his anonymous team.

Wonderland Official Website

Due to the high volatility of BTC and ETH assets in the crypto market, the US dollar-pegged stablecoin USDT has become an important component of the crypto market. Although users have become accustomed to trading with stablecoins, the fact that the US dollar is controlled by the Federal Reserve means that a depreciation of the dollar also implies a depreciation of the stablecoins pegged to it, which means a decrease in the purchasing power of crypto users.

Wonderland attempts to create an algorithmic stablecoin TIME that is not pegged to the US dollar, making it an algorithmic reserve currency supported by other decentralized assets. Regardless of market fluctuations, this algorithmic stablecoin aims to maintain its purchasing power, similar to gold, by regulating its price fluctuations through supply and demand.

Operational Mechanism

The price of TIME in Wonderland is not anchored to any asset; each TIME is supported by a basket of crypto assets in the Wonderland treasury, including single tokens and LP token pairs.

Among them, single token assets include MIM and wAVAX (wrapped AVAX, the native token of the Avalanche protocol); LP token pair assets include TIME-MIM, TIME-AVAX, etc.

Wonderland's rules stipulate that each TIME is supported by 1 MIM, rather than being pegged to it. At this point, the Wonderland treasury needs to reserve MIM to support TIME, keeping the price of TIME at 1 MIM. When the price of TIME falls below 1 MIM, Wonderland will buy back and burn TIME to reduce its supply, bringing its market price back to 1 MIM; when the price of TIME exceeds 1 MIM, Wonderland will sell TIME at a discount to increase its circulating supply, causing its price to drop back to 1 MIM.

You might think that the intrinsic value of TIME is 1 MIM, or around $1, and its secondary market price should fluctuate around $1. However, in reality, Wonderland's algorithm dictates that the actual price of TIME is determined by market supply and demand, fluctuating freely, with the current price of 1 TIME being $2,798.

Currently, there are two ways to mint TIME: one is to mint it using MIM as a single token, and the other is to mint it using LP assets. In other words, users can obtain TIME from the Wonderland application at a discount using either MIM or LP assets.

Minting TIME

Additionally, users can lock TIME to receive a certificate MEMO, which will automatically compound based on the current yield rate; users can also wrap MEMO into a yield-generating asset called wMEMO, which can be used as collateral in Abracadabra.

Users can profit from Wonderland in two ways: one is to stake TIME and earn more TIME through automatic compounding; the other is "minting," which involves providing LP assets (TIME-AVAX, TIME-MIM LP) or single assets MIM, wAVAX to mint TIME at a discount, profiting from the market price difference.

It should be noted that Wonderland's code has not been audited, and the price of TIME is subject to fluctuations, so users should be cautious about fund safety.