HOPE is a one-stop DeFi ecosystem based on the encrypted native distributed stable currency $HOPE, aiming to provide everyone with barrier-free, open and transparent next-generation financial infrastructure and services. Protocols and features like HopeSwap, staking, and DAO are now live: https://app.hope.money/#/

HopeSwap is an AMM liquidity protocol, an exchange rate market for the distributed stablecoin $HOPE, and the only channel for ordinary users to obtain stablecoins.

learn more:linktr.ee/hope_ecosystem

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Profiles of 6 Community Experts

Big Chengzi: Hello everyone, I am very happy to come to the HOPE session today. I am Big Chengzi. I am an old man who joined the circle in 13 years and is an old man in the currency circle. I also knew Mr. Wang before and learned options from Mr. Wang, so this time I have I will come to participate in the HOPE session and chat with you, thank you.

Bit Wu: Hello everyone, I am Bit Wu. I have experienced a lot of things in the industry, and I have many stories, so I have a story blogger on this label, so everyone can read me as that story. I am personally interested in this AMA. We have been studying stablecoins. What kind of direction can we better explore the emergence of stablecoins? I hope to discuss with you today. The second is to learn from you. Read more about the stablecoin track.

Tuao Big Lion Brother: Hello everyone, I am Tuao Da Lion Brother Benao. I joined the blockchain industry in 2016 and am mainly active in this region of Australia. Today I am very interested in the field of stable coins. Stablecoins have been one of the most successful applications of blockchain applications over the past few years. Various countries also attach great importance to stablecoins, including Australia, which is studying related bills. Therefore, I am looking forward to hearing what can be done in this field, including listening to your analysis from the perspective of teachers. I think this field may be a very large market, and it may also bring more fresh blood to the blockchain industry. Therefore, I am very happy to be here to communicate and learn with all of you.

JamesX: Hello everyone, I am primarily a DeFi analyst and currently serve as an advisor to various DeFi projects. Today I am very happy to be able to participate in this exchange, discuss stable coins with senior industry leaders, and learn how to build the HOPE stable currency ecosystem. At the same time, I am also looking forward to discovering more stablecoin-yielding strategies in this ecosystem.

Metaverse Ah Q: Hello everyone, I am Ah Q, and I entered the blockchain industry in 2017. I am very interested in the field of stablecoins, so I came to this HOPE session today to communicate with you and discuss the future direction of this stablecoin track, hoping to find a better direction in this field. thank you all.

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Recent market hotspots and investment opportunities worthy of attention

Big Orange: Personally, since the beginning of this year, I have been mainly bullish. Before the Hong Kong conference, I was also more determined to be bullish. My point of view is that the inflation in the United States is showing signs of turning around, because this kind of market is ahead of schedule. So generally speaking, I think the overall market in the future can still be expected. I suggest to the friends around me to make fixed investment in the bear market stage and buy coins in the bull market stage. Now it is definitely in the stage of fixed investment. You can increase your income while making fixed investment, such as buying ETH for staking, or short selling BTC, ETH and other currencies to increase your income based on currency. Of course, if HOPE has something that can be combined, you can also share it.

JamesX: I have been paying attention to various Layer 2 investment opportunities recently. Although the rate of return on the entire chain is definitely not as high as it was then, there are many low-risk profit opportunities, including the mining rate of return was quite high a while ago . In addition, the Layer 2 ecology will also bring high expectations. There will be many new ecology and reputable teams entering, and there will be some mining opportunities at that time. Generally speaking, the big players in the market are still unstable at present. I personally will not make a lot of investment. I suggest that everyone adopt a general investment strategy.

Brother Tuao: I have actually repeatedly emphasized in my own community and Twitter that since February, I think that the entire market is not a rebound, but a reversal. At that time, I was challenged quite a lot, and someone came to criticize me in private. But for now, basically my judgment is correct. Therefore, in the next period of time, I agree with Big Orange. I personally think that the market will fluctuate upwards. But there may be a callback, but I don't think this callback will be particularly large. Therefore, I personally think that every callback is a good time for value storage. I recommend that my community do this.

In addition, in terms of market hotspots, I think there are three main ones. First of all, I think one of the more interesting areas in the cryptocurrency market at the moment is Layer 2 solutions, especially Optimism. Personally, I am very optimistic about the prospects of this project, because it has a lot of potential to solve the current bottleneck problem in the Ethereum network, and has attracted some important projects, such as Uniswap and Synthetix. In addition, Optimism’s recent financing was also very successful, receiving more than $300 million in investment, which shows that the market is very optimistic about its prospects.

Secondly, I think the more interesting area in the current NFT market is the metaverse. The metaverse is a very big concept, but I think the most promising right now are blockchain-based games. Games like Axie Infinity, in particular, have been very successful in the market, and I think this is just the beginning. In fact, I think there will be more similar games in the future, especially in the framework of the entire metaverse, which may become a very large market.

The third area is about on-chain derivatives and options markets. I'm personally very interested in this market because I think it's going to become very important over time. I started with GMX myself and have gradually started to make derivatives on the chain. I found that in terms of experience, it is much better than it was in the last wave of bull market, including depth and user experience. At present, there is no project comparable to GMX in this market, but I firmly believe that there must be opportunities in this direction. In the future, it is expected to share a large part of the transaction volume of centralized exchanges.

Metaverse Q: At present, I would like to talk about a market judgment first. In fact, I personally have a preference for this market as a whole, and it started in January and February this year, and I feel that it is almost the same. It has been almost 18 months from the highest point of Bitcoin to now, which is also in line with the cyclical timeliness of this bear market. I think it is now entering a stage of bear tail outflow. In the next period of time, the market, I personally think that it will go to a stage of shocks and callbacks, and it will continue to fluctuate upwards. The callback may reach 20,000 or more than 10,000, 18,170,000, then this will be a very good opportunity. Normal upward, I think the best situation that can be seen this year may rush to 37,380,000. So my current operation is also constantly calling back the Layer 2 layout.

Since last year, I have been working on some early projects on Layer 2, including mining and trading. I've also gotten good returns on the OP and tier 2 airdrops. Currently, I'm mainly focusing on early projects on Layer 2, and continue to follow the development of L2. Recently, the Shanghai upgrade has been completed, and everyone can withdraw their own Ethereum.

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Optimistic stablecoin architecture and its advantages and disadvantages

Bit Wu: Stablecoins have always been a topic of much concern. Today we mainly talk about the history of stablecoins, including the comparison of the advantages and disadvantages of centralized and decentralized stablecoins. First of all, centralized stablecoins have certain limitations. For example, stablecoins such as USDT have been hanging over everyone’s heads, and their collateral assets are stored in banks, which also has the risk of bank failure, which is extremely unpredictable. Since last year, with the advancement of compliance and the sanction of USDT, the entire currency circle has begun to reflect on centralized stablecoins and the possibility of decentralized stablecoins.

In the field of decentralized stablecoins, the earliest should be MakerDAO's DAI, whose principle is over-collateralization. Over-collateralization means that, for example, 100 ETH can only be lent out 90 ETH, with ETH as collateral. However, under the volatility of Ethereum, the value of collateral will be affected, bringing potential risks. Later, MakerDAO introduced the centralized stable currency USDC, etc., and the risk was equivalent to extending to the past. At present, both LUSD and RAI are optimizations and improvements of the MakerDAO model, such as whose liquidation line is lower and the capital utilization rate is higher. However, over-collateralization also has scalability problems, for example, only a portion that is less than the value of the collateral can be lent, which is relatively inflexible.

A stablecoin is a cryptocurrency whose value is pegged to another asset to ensure its price is stable. The most common stablecoin out there is the collateralized stablecoin, whose value is determined by collateral and thus limited in its scalability. In order to solve this problem, decentralized algorithmic stablecoins came into being. The value of this stable currency does not depend on collateral, but relies on market consensus and games to maintain stability. The expansion of this stablecoin can theoretically be unlimited, and the originator of the algorithmic stablecoin behind it is AMPL (Ampleforth).

However, the current de-centralized algorithmic stablecoin has the problem that the real utilization rate is too low. No one is willing to hold a stablecoin that may return to zero or plummet at any time, because the word that finally stands out in the stablecoin is "stable". Therefore, individuals are currently pessimistic about decentralized algorithmic stablecoins. In addition, it is not meaningful to overemphasize decentralization, because decentralization and centralization can be integrated.

Regarding the future of the stablecoin market, I personally think that we still look forward to the emergence of a subversive decentralized stablecoin. Centralization and decentralization do not have to be isolated, they can intertwine, confront, cooperate and compromise with each other. If you want to make improvements in the field of stablecoins, you don’t have to regard centralization and decentralization as contradictions, they are more like two things that are related to each other.

Finally, if you want to improve the stable currency, you can consider introducing real assets, such as RWA, but if RWA is involved, centralization is unavoidable.

As some prospect, I think it is possible to explore the establishment of a decentralized credit system in the development of the stablecoin market. This credit system can be built using social data, similar to how social IDs are made. Although this idea is still in the early stage of exploration, some DeFi lending giants have already begun to try this direction, such as Aave's Lens social. The social credit system conforms to the law of human social development and does not require sufficient collateral. For example, social credit ratings like Lens can lend stable coins on Aave without collateral. Another solution is to introduce the credit rating of the real social payment system, and anchor the identity through KYC on the DID. If it is overdue, it may leave a record on the chain, similar to a dishonest executor in reality. These records can be sued in court and recognized by the real world. This will create a strong connection between the worlds of Outer and Outer Two or Outer Three. It can be discussed to allow exchanges to participate in this matter. They can build a credit system together, communicate with each other through on-chain and off-chain, and let these leading exchanges do arbitration. These are directions that can be further explored.

Teacher Wang: I think this question is often asked to me, which is what is stable currency. I think there is a saying in risk management that risk never disappears, it only transfers. So in fact, the stable currency we usually call is just a perspective. For example, it is stable and anchored to a certain currency, the US dollar, but whether the US dollar itself is stable or not, we will not talk about it. But there are some expectations that I think are very unclear. For example, when USDC was sold before, then the asset side behind it, that is, debt, then its debt made a profit and lost. When it was run, the debt Whether the entire floating profit and loss will be accrued. These things are actually an existence that I think hides these risks in order to deliberately make it stable, so I think that for the concept of stable currency, price stability may not necessarily be called stability.

Stable, what else does it need to do? It is expected stability, that is, what are you playing, what kind of risks do you have, and what kind of expectations are stable, I think it is also a kind of stability, including what everyone thinks like USDC and USDT, whose prices are still stable at present, But why is everyone a little scared? It's because its expectations are unstable, and you don't know when that sword will be cut down. In this, I think that in the whole process of risk management, or the process of defining stability, we actually need to use some decentralization methods, such as the disclosure of account books, such as this kind of transparency, For example, including our decentralized issuance, including overall management, etc., I think we hope to achieve this, and everyone's expectations for its future are stable, and don't suddenly come up with something that makes everyone suddenly discover the previous situation. The whole world of values ​​is collapsing. So I think that at the beginning of our HOPE, everyone may not feel that it is a stable currency, but I believe everyone can feel that its expectations are stable.

JamesX: The stable interest system based on the credit stable currency on the chain or the DID credit system on the chain is not feasible in the current situation where traditional finance and chain business finance have not really been connected. In traditional finance, the core indicator of credit score is not the credit score of an individual payment account, but a low-risk certificate for financial institutions to measure the limit of each individual. The final liquidation guarantee still needs to be implemented in combination with the laws and powerful organ systems in the real world. Therefore, even a credit loan on the chain or a stable currency system supported by a credit system may not be feasible within five years in the short term. The core of the stablecoins on other chains is still the stablecoins supported by centralized institutions. Personally, the most optimistic decentralized stablecoin is the CRVUSD stablecoin system that customers may release, because it is based on the largest stablecoin value-linked liquidity platform in popular science. Once released, it may be extended to various large and small agreements. Although its underlying core logic is still overcollateralization, its liquidation mechanism is driven by products to ensure dynamic excess value. But it still does not break through the logic of enforcing credit on the chain to support the value base of stablecoins.

Metaverse Q: I am here to learn about stablecoins. I don't have much research on stablecoins, but I think that the development of stablecoins will be diverse, not only the development of centralized stablecoins or decentralized stablecoins, because centralized stablecoins are usually held by institutions, Reserve assets like USDT and USDC are usually held by these institutions, which are relatively more stable and easier to accept and use. But centralized stablecoins have regulatory and security risks.

Decentralized stablecoins are divided into secured and unsecured. Unsecured stablecoins are based on elastic supply to maintain their value stability, and the issuance will be automatically adjusted according to market demand to maintain price stability. Although collateralized stablecoins do not have the risk of a large category, their liquidity may be insufficient, and this stablecoin must be accepted because its value is stable.

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More promising stablecoin projects

Big Orange: I think there are three main types of stablecoins on the market: one is pledged stablecoins, such as pledged Ethereum; the second is centralized stablecoins, such as USDT and USDC; the third is algorithmic stablecoins. Like HOPE, it may be a decentralized pledged stablecoin based on these three stablecoins. I think this kind of innovation is worth exploring and trying, and I am optimistic about its future development. The three aforementioned stablecoins all have various problems. For example, USDT and USDC are not backed by US banks, and there is a risk of centralization; and algorithmic stablecoins also have stability problems. Therefore, I personally think that HOPE's innovation may become a better choice.

Brother Tuao: I think the previous speeches are very good, especially the directions of credit stable currency, which I think are very interesting directions. But from the perspective of landing, it does take time. If one day the stable currency is really realized, then no matter where you are, you can directly connect to some local applications just like using Alipay and WeChat. Although this has not yet happened, at least relatively large applications can be directly docked. If this application can directly connect to real-world assets, will there be some good collisions in the future? I am more optimistic about whether this direction can be realized.

In fact, there have been many such examples around me. In 1994, when I was in Australia, many people around me started using stablecoins, especially USDT, for buying houses and exchanging currency. Later, many shopping websites also began to support cryptocurrency payment methods.

I think stablecoins are a very promising segment of the cryptocurrency market. If done well, stablecoins may have more disruptive properties than other cryptocurrencies, including Bitcoin, because it actually solves some problems. What I am more concerned about now is whether it is the last decoupling of USDC or the recent encryption bill, because various countries have already introduced things in this regard, which puts stablecoins in an embarrassing situation. In addition, the development of stablecoins is very fast, and now there may be stablecoins with more vitality and stronger mechanisms.

In this market, stablecoins need to make this thing good and at the same time want to make it super decentralized. But in fact, since the stable development for so long until now, there is no stable currency that people can really dare to hold with confidence. Therefore, I look forward to seeing projects like this make a huge contribution in this field. Although this is not an easy entry point, if there is a big enough perspective and foresight, this matter may be done very well. Stablecoins are not a short-term project, but require long-term planning and continuous efforts.

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HOPE ecological design and gameplay

Teacher Wang: HOPE is a reserve-type stable currency, the reserve is encrypted assets, and the initial reserve is Bitcoin and Ethereum. The price observation has been completed on 4.17, and the determined ratio is that 100,000 HOPE corresponds to 0.108 Bitcoin and 1.08 Ethereum, and the ratio of Bitcoin to Ethereum is 1:10. Through the purchase and redemption mechanism, before the price of Bitcoin doubles, all purchases and redemptions are carried out through the delivery of actual assets.

HOPE is an asset linked to a combination of Bitcoin and Ether, similar to GBDC, but HOPE can be delivered in kind. In addition to HOPE, there is also an LT token as a governance token. It can be obtained by participating in community activities, and LT tokens are pledged into veLT tokens for voting. Voting rights include agreement income, road governance trends and mechanisms, etc. The entire ecology needs the participation of the whole people, which is a very long-term thing, such as establishing its own exchange rate system, interest rate system and interest system. In the future, whether HOPE can be used as a margin, whether it can be used as a settlement currency for everyone, these are all kinds of usage scenarios that need to be launched one after another. One of the key issues is how to get participants to make money. For this problem, based on previous product experience and deep thinking on trading or financial reserves, a rate of return model was designed. Through this model, each participant can get what he wants, so that the whole benefit reaches a stage of dynamic balance.

Regarding the application scenarios of stablecoins, in my opinion, the most important thing is how to make it more common so that it is no longer a new thing. It would be even better if we could one day pay directly in stablecoins. However, to get to this state, we need to do a lot of work. I used the metaphor of Lao Tzu before, that is"Dao begets one, one begets two, two begets three, three begets everything". Dao Shengyi means that this project will be stable, and its core energy is the lowest cost, but what does 123 mean? That is to say, in the end, there must be exchange rates and interest rates, and liquidity is also very important.

This cost of capital needs to be calculated. Only with these two things can there be the so-called two or three, that is, the clearing and settlement agreement. This is a bit like Alipay. It solved the credit problem of buyers and sellers in 2016 by asking buyers to confirm receipt of the goods before sending money. HopeConnect also uses this method to store money on the chain, and then the decentralized exchange can deleverage, you can buy Moutai, you can buy a car or a house, and use the bank card we provide. Only with these things, can we gradually use it as a new computing currency in various application scenarios to achieve the goal of creating wealth.

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Gaming opportunities that HOPE ecology can pay attention to

Mr. Wang: First of all, I think that if it is a currency-based one, for investors who hold Bitcoin and Ethereum in their hands, if they think that Coinbase is credible, then they can choose to convert their Bitcoin into HOPE, and mine on HOPE. Since HOPE is guaranteed by the SRE mechanism, the purchase and redemption process is almost lossless, so you only need to choose the pool with the highest yield when mining. After digging enough LT, investors can keep it, because LT is actually a future call option, and they will sell it when the bull market comes. This method can be regarded as "white whoring".

The second method is based on BTC and ETH transactions. Since HOPE itself tracks the price of BTC and ETH, when HOPE has a certain discount or premium to the exchange rate of Ethereum or the exchange rate of USD, investors can buy or sell Ethereum on the exchange, and then exchange It is exchanged back for HOPE, thus carrying out triangular arbitrage. This method can also consider the LT obtained by mining.

When choosing a mining pool, investors should pay attention to the staking pool, because in the entire ecosystem, the largest amount may be on the top. But mining pools and LTs can also be considered when investing funds in the entire ecosystem. Investors need to evaluate the potential income and current price of LT, then choose the highest yield in different pools, and consider whether they can cover free losses. All of these methods may have opportunities, but investors need to have certain abilities and means to bear uncompensated losses.

Investing funds in the entire ecology, maybe LT or in the swap pool, the proportion of the entire weight you can dig may be higher. Therefore, investors should evaluate the potential earnings or current price of LT and choose which pool to invest in to obtain the highest yield. In addition, you should also consider whether you can cover gratuitous losses.

There may be opportunities in these methods, but investors need to have certain abilities and means to bear uncompensated losses. When choosing a mining pool, investors should pay attention to the staking pool, because in the entire ecosystem, the largest amount may be on the top.

Finally, Teacher Wang mentioned that retail investors may not have studied these things deeply enough, so old leeks, old players or old mages may need to lead them to understand these gameplays. They need to evaluate the returns and risks in different pools and determine the best investment strategy.

If the strategy only runs large currencies, then you should already have experience in arbitrage. In subscription and redemption, the delivery is physical Bitcoin and Ethereum. For example, buying 100,000 HOPE in Swap caused the entire premium, you can sell HOPE in your hand on Swap, and then buy BTC and ETH long or spot on traditional exchanges. Next, purchase and redemption can be performed directly through dealers or market makers. If you're a market maker, it's even more seamless. This ensures that you can maintain the price difference of the entire secondary market at the price of the primary market. Therefore, this is a bit like traditional cross-lock arbitrage, except that one end is linked to SWAP, and the other end is an ETF index of BTC and ETH or a real Ethereum spot or futures.

Big Orange: Because I have researched many similar projects, such as stablecoins, I may do it with an arbitrage mindset. My idea is that Bitcoin and Ethereum already have a price for HOPE, so when they are less than doubled, I can exchange Bitcoin or Ethereum for HOPE and get LT as a reward. If I think HOPE will double above Bitcoin or Ethereum, then I can choose to sell HOPE after the double. Before that, I can redeem HOPE at any time and get LT rewards at the same time. If I think the future development of HOPE is promising, I will hold HOPE, and the future HOPE ecology will include applications such as lending and LT. Of course, the success of this process also depends on the development of the entire HOPE ecosystem, including the use of LT as a margin. This is just an idea of ​​mine, not sure if it is feasible, but if there is arbitrage thinking, this idea may be feasible.

Teacher Wang: I think your idea is right. The first income scenario we designed is for currency-based users. If you hold BTC, we can put it into a distributed reserve, and then pay you the entire LT as interest. Although it may become u after it doubles, you can understand that it is a super large dual-currency wealth management that can be purchased and redeemed at any time, and can pay interest every minute and every hour. You can get back the principal at any time, but the interest can be paid to your account in real time, and you can receive it at any time. When you think it is close to expiration, even if new trading and arbitrage opportunities are generated in the entire game market, our entire interest rate market or HOPE price market will become a volatility market, because Big Orange’s understanding of options is still very profound. When you hold HOPE, in the entire interest rate market, the interest rate is an implied volatility or a premium market. If you don’t want to lose the currency standard, but the price of LT is very high, you can buy a call or put protection. If the rate of return on LT that you can mine every minute or every day is significantly higher than your interest, there are actually many arbitrage opportunities when you pay the royalty. When designing the entire revenue scenario, we need to consider every path of the currency price and possible arbitrage and trading behaviors in the market. I believe that the big teacher can dig out a lot of arbitrage opportunities in it.

Speaking of options, when I get the option certificate, I need to decide whether I am willing to take the risk. I think there is little risk in terms of price. However, I need to consider how much benefit I can get from it, and how I should choose currency standard or U standard, or combine the entire option to operate. Everyone has their own game line, what we have done is to make this mechanism public. At a certain price, it will become a certain attribute, and in a certain pool, how many LTs can I get, how are the prices of these LTs determined. Early on, I believed the game was inadequate, including arbitrage opportunities and possible differences in people's rates of return. It all depends on your understanding of the whole mechanism. However, as everyone gets familiar with it, a balanced route will eventually be reached. This balance route will gradually change with the rise and fall of the currency price, including the new volatility gameplay and the launch of the new protocol. These new agreements can also generate new opportunities for each other. Therefore, it is always in a game state. I think the risk can stem from the fact that you might lose out to someone else. It is not because you are the price controller yourself or understand the whole mechanism clearly enough, this is actually a comprehensive game game of the market, that is, the state of what you like and what you like. We think this is probably the best direction for a project to go.

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How to guarantee and reflect the value of $LT

Teacher Wang: 60% of LT is given to the community, and 10% is used for other purposes. The industry cannot sell. The total amount is one trillion. There is a fixed amount to be generated every day. It is unlocked linearly and halved every four years, similar to Bitcoin mining. The daily supply is about 260 million. After the release, the weight will be calculated based on the output of the mining pool and the number of veLT held, so as to obtain LT. The mining mechanism is similar to Bitcoin, except that there is no other channel for mining. There may be a situation where the supply of LP is insufficient, and a part of it needs to be supplemented from other channels. LT can be traded on swap, but the external supply is small. The project party cannot take out the inventory, it can only be dug out in the market. You can get high LT income by taking HOPE, then using Swap to exchange LT, and adding U to the LT mining pool. This method may be on a gaming LP in a week or a few days. This method is the best as no base bits are lost but more LT is gained.

The LT tokens of the project party are directly locked. The locked warehouse is released within four years, and the released LT is immediately locked for another four years to become veLT. We plan to lock LT tokens for eight years to express our determination, so LT is a super long-term project. Regarding the value system of LT tokens, it can be realized through arbitrage and market recognition of its value. From three levels, LT tokens have intrinsic core value.

The first level is the bitcoins that are backed up. After the price of Bitcoin doubles, these excess reserves will be used to invest in staking pools or funds in the entire market, or we can sell them and give back to each LT user. Therefore, behind each LT token is a call option on Bitcoin's future bull market.

The second level is that people who own LT tokens can get half of the revenue of all our protocols, including the revenue sharing of protocols such as Swap, Lend, and Connect. Half of the service fee will go to these LT people, which is the second layer value of LT, that is, the revenue share of the entire ecological agreement.

The third value is the implied liquidity value. In three or four years, the reserve pool behind HOPE may have more than $10 billion in usable assets. A dollar in your hand is a dollar, but if 100 million people have a dollar together, they can play a greater value than 100 million. This will create influence, and those who need these influences may need to compete for voting rights, which may lead to an imbalance in the supply of LT in the entire market, resulting in a liquidity premium. Therefore, from the perspective of these three levels, the value system of LT tokens is guaranteed, and it does not need to be realized by means of fund pulling or smashing.

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Custody and Redemption of HOPE Reserves

Teacher Wang: The security of HOPE reserves is mainly kept through distributed reserve points. This means that reserves are dispersed across multiple locations, thereby avoiding a single point of risk. Additionally, reserves are sourced globally, which adds to its decentralization and security. Reserve addresses, processes, and institutions are also exposed to the market, which also contributes to increased credibility and transparency. Currently, HOPE reserves are escrowed through Coinbase, and other reserve points may be added in the future.

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If the price of Bitcoin falls, what insurance does HOPE have to deal with?

Teacher Wang: Many people are concerned about how to exchange BTC and ETH for tokens anchored by USDT in the future. First of all, the whole process must be generated through a community voting mechanism. This is part of the overall governance mechanism. What to replace, at what point, and in what form, all need to have a plan. There are many forces that can come up with many methods, such as throwing ETH into Swap or customer pool for natural exchange, or hedging, or introducing other institutions for price maintenance and real value management. Future exchange reserves can be exchanged for other assets, or other on-chain assets can be acquired. The entire community will come up with a plan that everyone recognizes and has the least impact on the market. The management of reserve will choose 20 to 30 methods from 100 methods for decentralized operations to protect the interests of LT holders.

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How to evaluate USDT/USDC/Luna

Teacher Wang: I think different people may have different views. I personally think that the current algorithmic stablecoins and reserve stablecoins each have their own operating models and mechanisms. However, HOPE operates on the basis of these mechanisms. First, I want to talk about USDT and USDC. In fact, USD and USC are the most enviable stablecoins, they appeared out of nowhere, but the business model behind them is that you deposit USD with them, and then they use this money to buy some extremely liquid, high interest rate coins. No high assets are required. In other words, the interest rate for the entire US dollar is now 5% annualized, so as long as they have a scale of 60 billion, they can make a profit of 3 billion US dollars per year. This is also the business model of USDC, including many traditional banks wanting to do this stable currency, because they smell a strong signal of the interest rate difference between this zero-interest deposit and the asset side behind. However, I think there is a difference in the pattern between USDT and USDC. There are some uncertainties in USDT. For example, you don’t know who its dealer is, you can’t find Tether’s headquarters, and it’s unclear where its assets are placed. However, since USDT is the first stable currency, it has driven the settlement scene through exchanges or the entire market, and has gradually been recognized, so everyone defaults to its existence. The USDT run is not because people don't want to run, but because they can't find it to run. As a latecomer, USDC wants to surpass USDT and has taken a traditional path. In fact, I think that neither USDT nor USDC is the Federal Reserve Bank. They are both traditional commercial banks with a layered layer, so we jokingly call them the Federal Reserve Bank of Currency Rights. All of their businesses are traditional banking businesses, relying on deposits and the assets behind them to buy bonds, or buy some bonds with a slightly higher nature to make money. If USDC wants to catch up with USDT, there is only one way to go, that is, to serve and promote directly to customers. But it also makes USDC easier to find because it's direct to institutional clients, and there are so many of them. Therefore, USDC may also go bankrupt, as long as everyone starts to run, forcing it to sell bonds or forcing it to come up with higher liquidity. The two stablecoins USDT and USDC are based on traditional banking.

Regarding Luna, I still admire it. Although I know that many people have suffered a lot of damage on it, it is actually using its own computing power and reserves to maintain stability. It is a combination between stable computing power and stable reserves, but its problem is that the speed of printing money every year is too fast (19.4%), including the expansion of scale, which makes its own ecology generate The income is not enough to support its such a large-scale expansion. When it finds a problem, it rushes to buy back the reserves, or buy bitcoins as reserves. But at this time, the first problem is that the price of Bitcoin is too high, much higher than it is now, and their average price is about 40,000-42,000. Another problem is that it's bought too late, they've been sold like crazy.

So in fact Luna is a reserve-type stablecoin, but I don’t think they have thought comprehensively enough about the possible consequences for the entire financial ecosystem, including the possible consequences, including the control of the speed and rhythm of the entire expansion. Although they have provided us with many opportunities to learn and think about the mechanism, they still have some problems. For example, they can directly mint on that chain, but the assets behind them still use Ethereum to do it. They are increasingly bound to traditional assets, which makes people feel a little embarrassed. Although it is a stable currency, it has been fluctuating in the traditional system. This may be because it is not decentralized enough, so this point also makes us think about it, that is to say, we must disperse the whole coin for distribution. Only in this way can its neutrality be guaranteed, including in multiple worlds, it has mutual games to achieve a balance, so that it will not be biased or oriented to any one side as a whole.

In general, Luna is a very powerful innovation, but it needs more comprehensive thinking on the possible consequences of the entire financial ecosystem, including the control of the speed and rhythm of the entire expansion. In the process of solving these problems, we can learn a lot of new ideas and experiences from them.

Speaking of HOPE, you will not lose your coins by holding HOPE, and at the same time you can get the opportunity to call options. If you hold BTC, then you may only have a 2% chance of making a profit, but if you use this 2% of funds to buy call options that never expire, you will have a greater profit. In addition, if you pay attention to whether the entire HOPE ecology and dreams can be realized, you will have nothing to lose.