What are the two innovative DeFi projects, Whitehole & Pacman, that Arbitrum is about to launch for IDO? (Part 1)
Whitehole Finance aims to create a fair ecosystem for platform users.Author: veDAO Research Institute
On April 25, Arbitrum has begun to fully distribute the initial ARB allocation for DAOs within its ecosystem. Recently, Dune data showed that the total number of transactions on the Arbitrum One official cross-chain bridge has surpassed 1 million, reaching 1,002,597 transactions, and the current total amount of ETH bridged to Arbitrum One has reached 2,428,922 ETH, valued at over $4.4 billion at the current exchange rate of $1830. The number of unique users bridging assets also reached 635,810.
Moreover, various projects within the Arbitrum ecosystem have been launched one after another, whether it’s the on-chain liquidity and incentive protocol WINR Protocol that surged at launch; or the decentralized exchange Camelot (Excalibur) that created a 15x opening increase, as well as the GMX copy trading system Perpy, and the on-chain asset management platform Factor DAO, among others. Each IDO of these projects signifies more opportunities for users to create wealth.
We see the Arbitrum ecosystem thriving.
This time, the veDAO Research Institute brings you an analysis of two upcoming DeFi projects in the Arbitrum ecosystem that have not yet conducted an IDO. As one of the hottest sectors in 2023, every IDO on Arbitrum deserves our close attention.
Whitehole Finance: A Multi-Asset Lending Protocol in the Arbitrum Ecosystem
Project Introduction:
Users can conveniently deposit, borrow, and utilize NFTs and crypto assets on this platform. Whitehole Finance aims to create a fair ecosystem for platform users and allow them to earn fair returns by utilizing the platform's features.
The platform token for Whitehole Finance is GRV (Gravity Token), and it has been confirmed that Whitehole Finance will start its IDO on its platform from April 25 at 11:00 UTC (19:00 Beijing time) for a duration of 3 days, ending at 11:30 UTC on April 28 (19:30 Beijing time), with an initial IDO price of $0.03.
There are five types of participation roles on the Whitehole Finance platform:
Deposit Provider: Crypto asset owners can deposit their assets into Whitehole Finance and set their own lending and liquidation terms. Depositors can earn interest from their deposits, which includes governance reward interest paid in GRV and deposit margin interest paid in cryptocurrency.
Borrower: Borrowers can participate by accessing various virtual assets through Whitehole Finance. Borrowers provide crypto assets as collateral and can borrow other crypto assets that suit their needs through the platform. As the cost of borrowing, borrowers need to pay interest, but at the same time, this action will also earn them official GRV token rewards. Currently, the Whitehole Finance platform supports deposits and borrowing of six crypto assets: ETH, WBTC, DAI, USDT, USDC, and ARB. The total amount of stored loans is $1,124,591, with the highest deposit yield (WBTC) at 110%; borrowed amount is $470,450.
NFT Holder: NFT holders can collateralize their NFTs on the Whitehole Finance platform to borrow KLAY (presumably the Klaytn token, a South Korean metaverse development platform). Users can re-farm the borrowed KLAY on Whitehole Finance, earning farming rewards while also receiving GRV token rewards to offset interest. Currently, Whitehole Finance only supports the collateralization of two types of NFTs: Smol Brain and LilPudgys, and the entire NFT market has only 0.988 ETH in TVL, which is negligible compared to token lending. Thus, it can be seen that NFT lending will not be mainstream for Whitehole Finance now and for a considerable time in the future.
NFT Auction Bidder: When the collateral value of an NFT borrower decreases and triggers liquidation, the user's NFT will be liquidated through auction. Other users can purchase the NFT at a lower price.
GRV Staker: By locking up GRV, users can exercise voting rights and earn staking interest.
How Does It Work?
Deposits and Interest Settlement: In Whitehole Finance, all interest earned during the addition of cryptocurrency to the lending pool appears in the form of gToken. When GRV first goes live, the exchange rate between gToken and Token is 1:1, and thereafter, interest income will accumulate and immediately reflect in the token's value.
For example: When GRV first goes live, if User A deposits 10 ETH, the relationship between their principal and interest is: ETH:gETH=1:1, and User A receives 10 gETH.
After some time when GRV is live, if User B deposits 10 ETH, the relationship changes to ETH:gETH=1:1.5, and User B receives 15 gETH.
When the depositor withdraws their deposit, Whitehole Finance will immediately convert the user's gETH back to ETH and pay it out, after which gETH will be promptly burned, and the user will receive ETH, with the amount increasing as interest accrues.
How Liquidation Works: Whitehole Finance is over-collateralized, and users can choose from six crypto assets for borrowing paths, each with different LTV (Loan-to-Value) ratios.
For example:
As collateral, Borrower A deposits ETH worth $1000.
The liquidation threshold for ETH is 75%, and the LTV is 70%. (In this case, the borrower can borrow a maximum of 700 USDT.)
Borrower A currently has a total borrowing amount of 700 USDT.
When the value of the borrower's ETH collateral drops from $1000 to $900, the LTV increases from 70% (borrowed 700 USDT/collateral 1000 USDT) to 77.8% (borrowed 700 USDT/collateral 900 USDT).
Now the LTV ratio exceeds the ETH 75% liquidation threshold at 77.8%, and the protocol will liquidate the borrower's collateral. The protocol (liquidating up to 50% of the borrowed assets) will use the collateral to repay 350 USDT of the borrower's 700 USDT debt, and it will also charge a 10% liquidation fee of 35 USDT.
This means the borrower will ultimately return 350 USDT + 35 USDT in collateral. After that, the user's LTV will be 67%, with collateral valued at 515 USDT and a loan balance of 350 USDT.
Token Economics:
Whitehole Finance has two types of tokens:
GRV: The platform governance token, responsible for interest payments.
Maximum supply of 1,000,000,000 tokens.
Contract address: 0x10031e7CFf689de64f1A5a8ECF4fBBc7Aa068927.
Distribution:
Community Incentives: 40% for community incentive rewards over the next 10 years.
Presale ($GRVIDO): 10%.
Ecosystem (Marketing): 10% (reserved for marketing rewards, pre-mined in a multi-signature wallet).
Team: 20% for core contributors vesting linearly over 3 years.
Reserve: 10% (pre-mined in a multi-signature wallet).
Liquidity owned by the protocol: 10% (pre-mined in a multi-signature wallet, with 5% for initial liquidity).
veGRV: The staking model for GRV tokens
Users need to stake GRV to obtain veGRV, which allows them to participate in ecosystem governance but cannot be traded or transferred. It is important to note that the exchange between GRV and veGRV is not a rigid 1:1 ratio but is weighted based on the user's GRV lock-up amount and staking duration. According to the Whitehole Finance whitepaper, veGRV weighting will proportionally rise from 0.96% to 100%.
For example: User A stakes 1 GRV for 4 weeks and will receive 0.0384 veGRV; User B stakes 1 GRV for 2 years and will receive 1 GRV. When the staking period ends, the veGRV obtained will disappear, and the GRV will be unlocked, allowing the user to claim it.
Ecosystem Scoring System:
In the Whitehole Finance treasury interface, we can see an "Ecoscore" interface on the right side of the user status bar.
EcoScore is divided into 5 areas (red, orange, yellow, light green, and green), with higher areas leading to exponential profit growth. Conversely, lower areas lead to low profits. Among them, red represents the user's unstaked initial margin valued in GRV. Whitehole Finance's long-term goal is to create a virtuous cycle of increasing GRV value within the ecosystem while maintaining high APR, attracting continuous capital inflow. Therefore, the platform itself encourages users to stake their initial margin GRV, allowing them to earn regular profits while also benefiting from the increase in the number of veGRV.
Overall, Whitehole Finance is not currently very popular in the industry; at least, there is hardly any dissection and analysis of this project across the network. According to veDAO data, Whitehole Finance currently has 61,209 followers on Twitter, but the number of influential followers is low, with only 1 top KOL following; 8 asset whales following; and 1 NFT whale following.
Moreover, Whitehole Finance itself has relatively low TVL for both crypto lending and NFT lending compared to other DeFi products. However, as an innovative DeFi ecosystem rooted in Arbitrum and having undergone contract audits, Whitehole Finance still holds a certain potential for wealth creation.
The above is the first part of the innovative DeFi projects on Arbitrum that are about to conduct IDOs, brought to you by the veDAO Research Institute. In the future, veDAO Research Institute will conduct research on Pacman Finance. In fact, the reason for choosing these two projects for research is that they both have certain innovations in DeFi gameplay, and on the other hand, these two projects have unique IDO methods: Whitehole Finance chooses to conduct its IDO on its own platform; while Pacman Finance seems to integrate the gameplay of social experiment-type projects like XEN, proposing the concept of "Initial Token Staking Issuance" VeIDO on top of the IDO. For more details, please continue to follow veDAO.
