Without any doubt, the world is yet to recover fully from the unprecedented price performance of Bitcoin in the last few months. More remarkable is that the digital asset is not showing signs of slowing down anytime soon. Nonetheless, there is more to the growing market visibility of cryptocurrency in the last 12 months than meets the eye. It is impossible to analyze the success of the crypto market in 2020 correctly without factoring in the contributions of the emerging DeFi landscape. With over $16 billion worth of assets locked in the market, the buzz surrounding the yield generating protocols of this ecosystem has brought about new growth dynamics to the already star-studded crypto industry.
Today, we are witnessing a growing list of decentralized financial innovations poised to usher in the next phase of crypto development. Already, the number of unique Ethereum addresses participating in the DeFi ecosystem has crossed the 1 million mark. This metric is even more potent if we consider that the year began with just 100,000 DeFi users. Hence, in under 12 months, the size of the market has increased by 10 folds.
However, bearing in mind the propensity of users to own multiple addresses, this data may not accurately represent the state of things. If we assume that users, due to one reason or the other, operate more than 1 unique address, then we could argue that the DeFI ecosystem is not as distributed as portrayed. The essence of introducing decentralized finance is to distribute the governance and wealth of the crypto economy such that financial products are not susceptible to the actions or inactions of a cluster of individuals or entities. Herein lies the core fundamental of DeFi.
For neophytes, DeFi can seem gloomy, others will say that it is everything you don’t understand about Computers combined with everything you don’t know about Finance. Its complex nature makes it a lot harder to attract a mainstream following. To this end, solutions like Cocoricos have emerged as democratizing tools for the DeFi landscape.
In other words, interested users can leverage the simple design and methodology of the Cocoricos platform to boost yield and eliminate the risks and complexities that come with DeFi. Other than liquidity mining, the platform also grows yield while staking or completing airdrops. It has developed the EGG Protocol that interfaces with the DeFi ecosystem for seamless participation in yield farming at no extra cost.
I decided to reach out to the CEO of Cocoricos, Mehdi Radi, to have a firm grasp of the workings of the protocol and the benefits of adopting it. Below are excerpts from the interview.
Edward Moon: Do you believe that the perceived complexity of DeFi is a major barrier to mainstream adoption?
Well, mainstream customers are used to the extremely low returns offered by traditional retail banks. DeFi has the power to give access in a few clicks and to literally everyone (from unbanked to high net worth individuals), to products hitherto reserved for an elite through private banks, in this sense, we can say that DeFi simplifies access.
On the other hand, DeFi platforms like Uniswap are used by tech-savvy early adopters for whom it sounds like child's play, the platform taking meticulous care of its user experience. However, we can not imagine a common user feeling comfortable using Uniswap, Metamask and securing private keys.
We cannot boldly call this financial architecture “Open Finance” if new users have to pass through complex loops to participate in yield farming or trade DeFi derivatives. Hence, the need for simple interfaces that democratize DeFi and make it accessible to a larger audience.
Contrary to what we may think, the barrier to entry is mainly in the order of the user experience, but is not at all in the technical complexity perceived by end users. In a few words, we do not have to understand the blockchain while sending bitcoin, as we do not have to understand SMTP while sending an email, we just have to know how to respectively use a wallet or an email application. This can be applied to DeFi as well.
Edward Moon: Can you please explain the workings of your platform to our readers?
Cocoricos is a carefully designed platform that curates all the yield generating opportunities of DeFi and presents it to users seamlessly so that they do not have to bother with any technical jargon.
This is made possible by a series of smart contracts that activate leveraging effects on DeFi yields. As such, we have shrunk the process involved in DeFi processes without imposing extra fees or initiating systems that would dilute its elements of decentralization.
For us at Cocoricos, automation is the watchword. We therefore eliminate unnecessary processes and increase users' chances of boosting yields by curating profitable strategies and opportunities.
Edward Moon: What are the yield-generating opportunities that Cocoricos provides, and how can investors access them?
Currently, we support liquidity mining, airdrops and staking. What we offer is an on-chain interface where they can execute and monitor all these activities. Staking SNX or partake in Uniswap’s Market Making, Cocoricos shrinks the required steps by creating a bridge for instant access.
For example a Bitcoin holder wishing to stake SNX must go through the following flow to generate yields:
BTC ⇢ ETH ⇢ SNX ⇢ Stake on Synthetix ⇢ SNX staked
Cocoricos allows this flow:
BTC ⇢ EGG ⇢ SNX staked
Edward Moon: Do you mind sharing with us the use case of the EGG token and how you intend to achieve optimum decentralization?
EGG is a utility token that serves as an entry point into DeFi. It serves as an incentive token that rewards farmers with extra EGG even when they farm on external pools. It is also the primary settlement, a payment method and the last resort for protecting participants against losses arising from volatility or hacks.
EGG is also a vital element of the on-chain moderation and voting system designed for the EGG protocol. This system enables the decentralized core of the platform and gives holders a say in the running of the day-to-day operations. Hence, EGG holders can determine, govern, or expand the applications of the protocol and the token itself.
We are holding the EGG Presale at the moment. You can access the complete details of this promotion and purchase EGG tokens. However, note that the lowest amount accepted is 0.1 ETH, while the maximum investment executable is 100 ETH. This presale will run until January 15, 2021, when the Uniswap listing is stated to go live.