Decentralized finance (DeFi) is an exciting space. There are new projects being created almost every day. These are either fresh, innovative ideas or forks of other popular projects. But the ones that perhaps deserve a little more attention are projects that failed on their first run in the market and are now being rebuilt based on the lessons learned along the way.
Some notable examples of such projects are Ring Financial, an exciting NaaS platform, and Blizz Finance, a lending and borrowing protocol. Both have suffered setbacks, but there is a good possibility that they may make a comeback in the next generation of DeFi projects.
1. Blizz Finance
Blizz Finance is a fork of Geist Finance, a lending and borrowing market on Fantom based on AAVE. It describes itself as a ‘decentralized non-custodial liquidity market protocol,’ where users can participate as depositors or borrowers.’ But unlike Geist Finance, Blizz operates on the Avalanche chain.
Blizz Finance allows users to borrow overcollateralized or undercollateralized loans. The liquidity comes from depositors, who receive rewards in BLZZ, the platform’s native token. There are a total of 1,000,000,000 BLZZ in supply. Of these;
- 50% go to lenders and borrowers as incentives
- 20% is given as incentives for BLZZ/AVAX to liquidity providers on TraderJoe
- 10% will be used in airdrops and incentives for the DeFi communities
- 15% goes to the team
- 5% stays in the treasury
Blizz Finance uses a mechanism first introduced by Ellipsis for its liquidity mining money rewards. In this system, rewards are vested for 3 months. The user still has the option to reclaim their rewards immediately, but this comes at the cost of a 50% penalty. This penalty will be distributed to users who choose to keep their BLZZ locked for 3 months.
When it originally launched, Blizz Finance had quite a following. It was designed in the best interest of users with a fully decentralized system that was dependable and had low operating costs.
However, the project slowly lost support to its competition. The fact that it didn’t have a lot of unique offerings did little to help. It’s now being rebuilt, and hopefully, will feature fresh ideas and innovative features.
Solidly is a decentralized exchange on the Fantom chain. It’s built to allow for “low cost, neat 0 slippage trades on uncorrelated or tightly correlated assets built on Fantom.” The project is the brainchild of two brilliant minds in DeFi, Dani Sestagalli and Andre Conje.
Solidly, like any DEX, is all about swapping crypto assets. What makes it interesting, though, is what it offers to investors.
Traditionally, investors would receive governance tokens. These tokens have little utility outside letting the user participate in DAO votes. So, many users tend to sell them.
The solution to this problem first came from Curve Finance’s vote-escrowed (ve) tokens. These added some value to governance tokens by giving the holder the usual voting rights plus a share of the trading fees and boosting their liquidity provider rewards.
Solidly took this model and improved on it. Users on the platform can vest SOLID, the platform’s native token, in exchange for veSolid (vote-escrowed SOLID). Holders;
- Have the right to vote on which liquidity pools should be incentivised
- Receive a share of newly minted SOLID tokens to help with dilution
- Receive all of the fees generated by the liquidity pools they voted for
- Can receive bribes from the protocol in exchange for their voting rights
The project generated a lot of buzz partly due to this innovative approach and partly due to the big names working on it. The latter would prove it’s undoing when Andre Conje announced he was leaving DeFi just a few months later. Investors panicked and bailed out.
Overall, it didn’t technically fail, it just took a bad hit when one of the big names left. The rest of the team didn’t completely abandon the project, which leaves the door open for the project to make a comeback in the future.
3. Ring Financial
Ring Financial is a DeFi project on the Binance Smart Chain. It is inspired by StrongBlock, which was the pioneer of Nodes as a Service (NaaS).
The idea behind NaaS is quite revolutionary. Basically, blockchains today have issues with scalability. One solution to this problem involves creating more nodes. However, building and maintaining full nodes is a challenging and costly undertaking.
NaaS is a blockchain scaling solution that gets rid of the cost and technical challenges. It proposes that users create nodes and receive rewards for running and maintaining them. These nodes take only a couple of minutes to create. And unlike full nodes, they don’t need to be running 24/7.
In Ring Financial’s case, a user needs 10 RING tokens to create a node. Of these, 7 go to the rewards pool, 1 to the liquidity pool, and 2 to the marketing wallet for development and community incentives.
The project’s vision is to create returns by aggregating DeFi protocols and then use those funds to create a technology that automatically aggregates other DeFi protocols through a DAO. Ring Financial planned to achieve this vision in three steps;
- Step 1: Make people understand and believe in the vision (in a context of trendy DeFi yield projects)
- Step 2: Gather the funds to launch big marketing campaigns and start research and development
- Step 3: Build with the day to day help of the community in order to accomplish the vision
Ring Financial isn’t new in the space. It was launched late last year and quickly became one of the hottest in DeFi. However, Ring Financial suffered a major hack that saw it lose funds. What followed was a string of bad decisions that caused many investors to lose faith in the project and bail out.
Today, Ring Financial doesn’t attract nearly as much attention as it did when it first launched. Since it was founded on an innovative premise, and it led to a big wave of innovation on the Blockchain. We might see its legacy in the next generation of DeFi finance.
There are many new DeFi projects coming in the next few years. And while this is promising for the world of DeFi, we shouldn’t be quick to forget previous projects that failed. Their earlier failures shouldn’t be a reason to count them out. The majority of DeFi projects will fail. This is the harsh reality of a young but rapidly developing sector.
However, those that take the opportunity to learn and build from their failure have a good chance of succeeding on their next run. So, if these projects manage to rise from the ashes, they may inspire or even define the next generation of DeFi projects.
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