DeFi is a buzzword that is on everyone’s lips today. Its staggering pace of growth mounting up to 2,000% in 2020 could not be left unnoticed, and there could be no way of foreseeing it even by the most vigorous market analysts just a year ago.
One noticeable shift happened that forever separated DeFi from the past: in the former times, it used to be an exclusive club for the narrow experts in the field; now, it evolved to be a mainstream vogue that almost everyone has a remote idea about. But don’t be deceived: it did not come like that overnight. Rather, the playground for DeFi has been paved by social and economic factors for many years before it actually came to overturn the course of transformation once and for all.
Number one reason for this is the growing distrust to banks. While the first ripples of doubt started emerging after the world-scale 2008 financial crash, they gradually grew up to be high waves. The discontent with the current financial system is growing, not least because of its slow propensity to innovate and traditionally bureaucratic structure. It posed a sharp contrast with the technology that came into use back in 2009 but did not scale up enough back then – blockchain.
Another reason is Covid-19. Due to unfortunate, and no way foreseeable, set of circumstances, in a few months, a poorer part of the population grew even poorer, now having the difficulty to show up the amount of savings sufficient to reach the minimum bank balance. The alternative solution had to be found – and the blockchain was quick to prop up. Paving the way of banking for the unbanked, it also proposed a fee-free and instant system not supervised by the government.
All of it summed up to produce what is now called DeFi (Decentralized Finance). This system proved to be a real life-changer, especially during the crisis – and, potentially, even the way to drag the economy out of it. For its race up in 2020, it is mostly obliged to the yield farming trend, started to exist just several months back. Since then, DeFi hosted under its umbrella an exponentially-rising number of project willing to try out in this new-born niche. Now, another trailblazer made an appearance on its list, and its name is OnigiriSwap.
For non-Asian natives, the line of explanation may be needed: Onigiri stands for a rice ball, widely enjoyed both in Japan and around the world. Although this seems as an indirect hint at another notorious Uniswap project – SushiSwap, in contrast to it OnigiriSwap holds a proposition based on solid technical projections of growth.
Due to its tokenomic model, OnigiriSwap holds a promise of generous returns to holders: up to 1800% for staking, and at least 10,000% surge in value, in case it gets anywhere close to October’s fabulous opening.The holders of $ONIGIRI token are entitled to exercise their governance rights, as well as receive fee returns from the network.
I came up with a few questions for the CEO of OnigiriSwap in the hope to gain some valuable industry insights, find out more about their token – especially in the light of newly-launched $ONIGIRIv2, and get to know in which direction DeFi is moving to.
Edward Moon: The fact that Bitcoin has reached the new all-time-high speaks for itself. if we consider it in the long term, who will eventually take the lead - DeFi or Bitcoin?
Chief Onigiri: From their properties these two are quite different, I’d say. First of all, DeFi as such is based on Ethereum, which makes it much more functional in terms of practical applications. It also includes a much broader range of assets used for various purposes, not only for investment, like Bitcoin.
Although more and more retailers are start accepting Bitcion, I think exactly for its changeable nature Bitcoin won’t be an ideal mean of payment, even if we look far ahead in the future. But I think you shouldn’t ignore the fact that these two can eventually become one, so that the whole DeFi system will be based on Bitcoin. In this case, two of them will have a long-term gain. But only the future will show whether this actually happens or not.
Edward Moon: Good point. And now that crypto is more and more widely accepted in the world outside of DeFi ecosystem, can we proceed to make a guess that someday tokens will be more of a dominant mean of payment than fiat currency? How will the banks be affected in this case?
Chief Onigiri: Cryptocurrency in general - yes. Let us not forget about the whole variety of stablecoins that has existed there ever since. If everything goes well, next year Facebook’s Libra will finally see the light, which will be a major kick for the whole industry. I’m sure banks do not store any illusions on this account and fully understand how groundbreaking this step is, but what can they do?
Crypto-movement is not a small and unnoticed thing that you can hide in the bush, in recent years it transformed into a revolution of a global scale. And now, just look how quickly it went up during the Covid-19. I guess the pandemic is what the crypto industry has been so eagerly waiting for.
Edward Moon: Since we’ve already touched on the topic of banks, I would like to learn one crucial thing - how is yield farming different from various interest rates programs initiated by banks?
Chief Onigiri: There is a huge gap between them. Apart from a similar name there’s not more in between them, really. Let’s start with pointing out that interest rates of the banks are dictated by the central banks. By contrast, yield farming is a largely independent thing and based on cryptocurrency demand/supply relationship.
That explains why you’ve never seen an APR of 100% in banks, probably? Crypto yield farming is just so much more accessible, allowing everyone to get involved in it and gain, unlike banks.
Edward Moon: Can we make any predictions as to how DeFi is going to behave next? Do you think the point of saturation will be reached in any foreseeable future?
Chief Onigiri: Saturation? No, I don’t think so. After all, look at how many companies could enter DeFi and use its frictionless transfers across the globe. If you calculate the costs of all transfers throughout the year in a normal bank, that’s going to be a huge value, I have to tell you that!
Especially in the new terms of Covid-19 restructuring and optimization will become the new priority. And imagine how many more companies could apply DeFI on practice - for instance, for selling their debt or appealing to investors. DeFi is just much more efficient for these purposes.
And if everybody starts using it, the current value will jump up timefolds, much higher than we could possibly think. That’s the precious thing about DeFi, and that’s why I think we should start taking advantage of it.
Edward Moon: Many sceptics see yield farming as nothing more than a passing fad. Therefore, I have to ask your opinion on a long-term vision of yield farming. What would that be?
Chief Onigiri: I won’t take the liberty of saying that it will stay here forever; of course not. Yield farming is largely based on decentralized exchanges, and as long as those are in demand, yield farming will thrive. Perhaps, in the future it will become more organized, and possibly less opportunistic, in a sense that platforms will start to provide balanced returns according to the market’s standard. But in all honesty, I don’t think it will just go away that easy.
Just look how simple and convenient it is - all you need to do is to deposit crypto that you keep on your savings account anyway. So instead of dusting, it brings you rewards. I don’t know anyone who wouldn’t be driven by this idea.
Edward Moon: The news came out that yearn.finance and SushiSwap are about to merge; in my opinion, this is a serious competitive menace for anyone playing with new trends of yield farming and DEX. What’s your stance on this matter?
Chief Onigiri: First of all, let’s not forget that the nature of these two platforms is decentralized, it means there will not be any merger as such in a full sense of word. Yet, YFI and SushiSwap are doing it for the sake of collaboration, which means there will be some common benefit, most probably a protocol improvement that would make both platforms more efficient. Why not, after all? In my opinion, this is a very wise approach, and I would like that OnigiriSwap also builds a chain of partnerships in the future.
The more DeFi will grow, the more there will be a need to build a competitive edge, propose something that makes you stand out from the others.
And especially as the field is less regulated just yet, there will be more odds that monopolies will come to exist sooner or later, which is obviously a big threat for us.
Edward Moon: I was under the impression that you had a plan to build an inter-operable DEX in the future. When will this project be available for the public use?
Chief Onigiri: Right now, we are underway of turning OnigiriSwap into a decentralized platform that will operate across multiple blockchains with the help of Polkadot, what will enable our users to equally participate in BTC, ETH and USDT pools.
This brings much more opportunities and by no means will catch the eye of the public interested in a broader variety of cryptocurrency pools to choose from. But, since this project is very ambitious and will be among first on the market, it requires lots of technical input, I don’t expect us to be out before later 2021.
Edward Moon: How will the functionality of your native token be affected by the transition from $ONIGIRI to $ONIGIRIv2?
Chief Onigiri: As a team, we tried to ensure that our native token stays equally functional and not affected by the upgrade to a new protocol. $ONIGIRIv2 thus became available after a Liquidity Migration Event. Now, users can take advantage of a robust and secure OnigiriSwap V2 that takes care of eliminating flows in liquidity, and provides stable returns for investors. This change is meant for the best of our community.
Edward Moon: Can you share with our readers what incentives can the new token boast of?
Chief Onigiri: Sure. Farmers will get rewards in $ONIGIRIv2 on any trade in the native token. Not to mention that investors are given a right to decide on featured pools and developer fees, which will give them much more freedom and control. This upgrade is a very important step, and I hope more investors will realize the advantages of OnigiriSwap.
Edward Moon: And the last one: although in former times, DeFi used to be based on speculations than on real facts, it has undergone a sharp change ever since. From your point of view, what are the ways to identify a successful long-term opportunity in DeFi?
Chief Onigiri: I should say, it was and still remains not so easy. Sad fact, but both DeFi and crypto still remain an, and it will probably stay like that until regulations are put in place. When it will happen - nobody knows. For now, the only way to predict the success of the venture is by checking at its fundamentals.
Weigh up all factors - the attractiveness of the team, the core idea, the future roadmap and so on. How they will do it and when. In my view, a venture should have a real proposition and not build castles on sand.
If the returns seem too high, that may as well be too unrealistic or a speculative projection. Make sure to select only the projects that have a real long-term value creation model and are able to fulfil their promise.