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Category: DeFi tools

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DeFi tools

Understanding Decentralized Finance (DeFi) Evolution

DeFi, short for “Decentralized Finance” has been among the hottest topics in the past couple of years. In this post, we will discover the evolution of Decentralized finance and also explore what is hidden in the future for us.

DeFi is one of the revolutionary applications of cryptocurrency and blockchain technology. It’s an alternative to traditional finance without the involvement of third-party.

Due to its potential to disrupt the existing status quo in global financial ecosystems, DeFi and DeFi-based applications are slated to provide limitless opportunities to the global population while forcing their traditional counterparts to innovate.

To realize the importance of DeFi, it is necessary to understand the underlying principles of DeFi and how it is different from the more traditional, centralized financial ecosystem that has been in use for a long time.

Centralized and Decentralized Finance

Centralized Finance (CeFi) is a broad term used to denote not only the traditional financial ecosystem but also the early crypto platforms.

The principle of Centralized Finance involves an irreplaceable role of certain intermediaries acting as trusted third parties to facilitate transactions. These intermediaries as we know today are the banking and financial institutions.

By acting as the gatekeepers to financial products and services, individuals across the world have no other option but to depend on these banking and financial institutions to manage their funds or meet any financial requirements…

… meanwhile, the traditional model requires the institutions to maintain custody of all the user funds, effectively controlling them.

The actual owners, on the other hand, are left at the mercy of these institutions depending on whether they approve or reject requests to access funds in their custody.

Further, the services offered by centralized traditional financial institutions are not only expensive but also inequitable as they have the freedom to decide who gets access to financial services and who doesn’t which has resulted in a significantly sized unbanked population.

Some of the early crypto exchanges and trading platforms are also considered as part of the CeFi ecosystem as they used centralized solutions that were in control of all its user funds.

The Dawn of DeFi

The introduction of Bitcoin as a transparent, decentralized mode for peer-to-peer value transfer established, for the first time, the possibility of executing transactions without the involvement of any third party.

Soon the launch of Ethereum as a programmable blockchain protocol with smart contract support opened doors for the creation of decentralized applications (dApps) that leveraged blockchain’s transparency, immutability, and decentralization characteristics to create globally available, censorship resistant applications.

The extension of these applications to create financial solutions resulted in the creation of an entirely new industry segment, which we know as DeFi.

Extending Financial Services to All

The blockchain-based, crypto-driven DeFi technologies are a collection of smart contracts and specialized dApps that are designed to provide financial solutions analogous to those available in the traditional sector.

The decentralized nature of these applications allows them to transcend geographical and censorship restrictions to provide low-cost financial services to anyone, anywhere in the world.

Further, it eliminates the need for third-party intermediaries to process transactions while enabling users to maintain complete control over their private keys throughout the process.

Capable of operating beyond boundaries to offer low-cost financial services to all, DeFi technology is considered to be the ideal solution to address the problems faced by unbanked and underbanked populations across the world.

The applications of DeFi range from savings to quick and cheap cross-border transactions, loans, insurance, fundraising and plenty of yield generation products.

Lack of intermediaries and direct interaction between participants reduces costs otherwise associated with commissions and pay-outs, in return to provide better value to users.

Popular DeFi Applications

Today, the rising popularity of decentralized finance has given rise to many DeFi companies offering a range of applications.

Some of the popular DeFi applications include Decentralized Exchanges, Lending Platforms, Staking and Farming Contracts and more, each offering various benefits to the participants.

Investing in DeFi is a straightforward process where the community comes together to pool their liquidity and utilize it to provide the necessary services to those in need. In return, they receive rewards proportional to their contribution to the liquidity pool.

Staking, a broad term to define the process where the community members lock their tokens in a smart contract for a certain duration and earn rewards in return.

Symbolizing support for a particular activity, the utility of staking ranges from providing the necessary collateral for validation of transactions on a PoS network to providing liquidity for DeFi services and regulating the supply of assets in the open market.

As an incentive, stakers receive rewards in the form of project tokens, voting privileges in governance and even discounted or privileged access to the products and services offered on the platform.

Meanwhile, yield farming allows stakers to maximize staking rewards across different protocols. Both staking and yield farming are popular passive income generation opportunities that benefit both DeFi protocols and its participants.

DeFi lending is another popular use case where users can borrow crypto funds, mostly in stablecoins or a particular digital asset against crypto collateral.

The necessary liquidity for lending will be provided by community contributions to the lending pool. Compared to traditional finance, borrowing over DeFi protocols is a lot easier and transparent, with less or zero paperwork and attractive interest rates.

DeFi lending allows anyone, irrespective of their credit score or geographic location to access liquidity in need. In addition, the interest earned from borrowers will be shared proportionally among the liquidity pool participants during the loan tenure along with their share of the principal.

Decentralized exchange (DEX) on the other hand, are platforms that allow users to buy or sell various digital assets across the DeFi ecosystem. With most DEXs following the AMM model, the necessary liquidity for trading different decentralized assets is contributed by liquidity providers to earn a share in the transaction fees in return.

On a conventional DEX, liquidity providers need to deposit equivalent value of funds in tokens in both assets representing the trading pair.

The utility of DEXs range beyond buying and selling certain token pairs on a particular protocol to include a variety of assets across protocols and even bridge the gap between crypto and fiat ecosystems.

While the basic principles governing the DeFi ecosystem are simple, efficient use of tools and smart contracts can open new avenues to address a lot of real-world problems.

The industry is gradually evolving to increase the applications of DeFi infrastructure to include real-world assets while solving the problems like impermanent loss, interoperability issues and more.

The Future of DeFi

Even though the concepts of DeFi have been around for a while, the industry is still in its nascent stages with lots of room for improvement.

Starting with crypto-only transactions across a single protocol, DeFi’s potential to solve real-world issues involving the entire crypto as well as traditional financial ecosystems has gained prominence in recent times.

DeFi protocols have established that they can replicate almost all the traditional financial solutions on-chain in a decentralized environment, which is received with great interest by conventional institutions.

Thanks to steady improvements in interoperable blockchains, stablecoins, fiat on/off ramps etc., a practical solution to offer a level playing field, with universal access to financial products and services is now close to reality.

DeFi is set to transform global financial systems with fast, transparent, peer-to-peer transaction processing capabilities that will remove middlemen and make financial services accessible to even the remotest parts of the world.

At the same time, unique hybrid instruments incorporating the strengths of different protocols, combined with tokenization of conventional financial assets could soon enable seamless transfer of value across DeFi and CeFi ecosystems for everyone’s benefit.

At Instaraise, we are working on creating the next-generation DeFi solutions that addresses the existing shortcomings and paves the way for the expansion of DeFi across various domains.

As we continue to innovate, we also help other innovative projects capable of offering real-world solutions gain the necessary foothold in the market by offering an entire suite of end-to-end incubation and fundraising solutions.

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DeFi tools

Potential of Multichain in DeFi Ecosystem- Instaraise Spaces Recap

What’s ahead for the the future of Web3 and DeFi ecosystem? Founders of Instaraise and ShuttleOne discusses the advantages of Multichain and explore the possibilities of including Metachain support in InstaDEX

4th june, 2022– Dibyo and Aditya interacted with ShuttleOne’s CEO Zhaung in an interesting conversation on how multichain capabilities are shaping the DeFi ecosystem.

Missed our episode of Instaraise Spaces on Twitter? Don’t fret, we have made notes of everything significant that happened during the session. If you have time, you are welcome to listen to the recording of the entire conversation here.

The latest edition of Instaraise Spaces, a series of interactive sessions between the Instaraise team and the larger crypto community was centered around the importance of multichain capabilities in today’s DeFi ecosystem. Along with Instaraise co-founders Dibyo Majumder and Adita Gautam, Hong Zhuang L, founder, and CEO of ShuttleOne discussed the need for interoperability between different protocols and how the respective projects are addressing the crypto community’s needs.

The topics of discussion ranged from ShuttleOne’s Metachain to InstaDEX and how a collaboration between both projects can affect a positive outcome that benefits the entire crypto ecosystem. Taking it a bit further, the trio also spoke about how traditional financial institutions are working towards incorporating crypto technology while attempting to strike a balance between the regulatory requirements and the technical benefits.

Changing Seasons in the Crypto Sphere, Good or Bad?

The session kicked off with an unavoidable reference to the ongoing crypto winter, as the market continues to maintain an overall subdued sentiment. The speakers agreed upon the fact that it is just a cycle that usually follows a rapid unrealistic growth, only to normalize and pick up the pace once again. The crypto winter is not all that bad, as during every cycle preceding the slowdown expands the user base, a lot of whom will continue to be part of the ecosystem for long, hopefully forever. Meanwhile, the growth and rising adoption of web3 technologies mean that there is only going to be a positive outcome over the long term.

However, certain challenges in the ecosystem could hamper growth and need to be addressed soon. One among those is the siloed nature of the existing blockchain protocols. In the backdrop of Terra’s blockchain freeze following the LUNA crash and repeated outages faced by the Solana ecosystem, the participants concluded that multichain is the future, going forward to ensure uninterrupted, seamless delivery of products and services over the blockchain.

The Need for Metachain, in Zhuang’s Words

ShuttleOne’s Zhuang mentioned that people aren’t talking about the right things, as the community recovers from the LUNA debacle. He pointed out that Terra is just one of the many existing layer 1 solutions and there will be many more created in the future. They will all carry with them one or the other legacy problems that we have witnessed so far. Be it scalability issues, reduced decentralization, or security flaws, they will continue to exist as long as these protocols operate in silos. At the same time, most of these layer 1 solutions do not address the need to bridge the gap between TradFi and DeFi, preventing the seamless, efficient flow of liquidity across barriers for the benefit of humankind.

He mentioned that ShuttleOne’s Metachain was born of that need, to become a layer 1.5 solution that allows users to move in and out of the crypto space and cross over different protocols through a secure, decentralized channel. Responding to a question on how Metachain is different from multichain bridges that exist, Zhuang said that even though projects like Kusama on Polkadot and Cosmos SDK-based Binance Smart Chain have attempted to solve the cross-chain compatibility problems, they have remained as “layer 0.5”. It is mostly because they have failed to factor in fiat currencies and their potential to drive growth. The Metachain, ShuttleOne’s blockchain aggregation solution stands apart from these projects by enabling seamless transfer of locked value in crypto assets directly to the bank accounts and vice versa, which in Zhaung’s mind makes it layer 1.5.

While the concept of cross-chain bridges has been around for some time, Metachain takes a different approach while establishing a two-way connection between multiple protocols. With security and integrity of assets as the main priority, the support for different native protocols and tokens is established through the direct involvement of ShuttleOne and the respective protocol teams. The smart contract-driven Metachain bridge doesn’t rely on wrapped tokens, instead regulates the movement of native tokens across different protocols by locking them on the chain of origin before unlocking an equivalent on the destination chain. By doing so, it prevents duplication of liquidity on multiple protocols. Working directly with native tokens also allows ShuttleOne to deploy network validators called Threshold Signatory Scheme (TSS) responsible for minting and transferring assets across protocols without compromising the security or decentralization.

During the conversation, Zhuang divulged ShuttleOne’s criteria for choosing protocols to support Metachain. The level of decentralization takes precedence, followed by security, adoption, and the rest.

Layer 1 Projects Tend to Have Limited Focus

Quoting Vitalik Buterin on multichain compatibility being the future of the crypto ecosystem, Aditya appreciated ShuttleOne’s effort on enabling such a future with the Metachain. He rightly pointed out that most layer 1 solutions of today focus on solving one of the many legacy problems at hand. By doing so, they take their eyes off the ball and end up retaining the rest of those problems. Giving an example of each protocol’s strengths, he mentions Solana for its high transaction processing capabilities, Avalanche’s EVM compatibility, Tezos championing the NFT ecosystem, and more.

Even though most of these protocols carry with them certain flaws, they are still well-received by the community. Developers rush to build projects on them and investors pump liquidity into these ecosystems. With the efficient multichain bridging that Metachain offers, both protocols and projects stand to gain a lot by leveraging desirable qualities from all available ecosystems for the broader community’s benefit.

Reasoning their decision to adopt the Tezos protocol, Aditya mentioned the advantages of on-chain upgrades as against the challenges of forking and updating other blockchains. He also spoke about the increased interest in blockchain research among banking institutions, especially in India while expressing the Instaraise team’s willingness to explore a further partnership with ShuttleOne to drive more value into the platform as well as the entire Tezos ecosystem.

Multichain NFTs on Metachain

Recently, ShuttleOne announced support for multichain NFTs on Metachain. During the session, Zhuang explained why they adopted the approach and how it is going to benefit the users. Starting with the process where they framed a hypothesis in favor of supporting multichain NFT minting, the team used its previous experience implementing NFTs in trade financing and other business operations to make the decision. With most creators not being aware of the technical aspects, they create NFTs with the sole purpose of gaining exposure and selling them. However, being on a single protocol, the exposure and access to liquidity remain limited, as compared to having a presence on multichain. Metachain enables this by allowing the NFT creators to bridge their NFTs across chains and list them on multiple marketplaces for increased exposure and command more value.

The Instaraise Story and Benefits from ShuttleOne Collaboration

Dibyo provided an insight into the origins of Instaraise which was built to address the needs of project creators who wanted to adopt Tezos but were unsure about the approach. Instaraise was created as a launchpad to help developers fundraise and gain access to the Tezos community. Having tasted success, the team decided to extend their offering to create a complete project launch funnel, where projects can go be

yond listing and raising the necessary funds to provide trading opportunities on native DEX while safeguarding the interests of their community. The upcoming InstaDEX with innovative features like Impermanent Loss Protection and Single Asset Liquidity provisioning safeguards users from potential losses due to market volatility and demand for crypto assets. A gamified feedback model is thus incorporated for their benefit where the platform shares its profits to compensate for any losses one might incur.

A collaborative deployment of Metachain in Instaraise’s infrastructure will not only help a broad section of crypto users to use Instaraise and its solutions but also opens the doors for more liquidity flowing from other protocols. The multichain approach also creates a big market, as Aditya mentions, “Being a Dapp on a single platform may make a project globally accessible, but at the same time, the growth will be constrained as they will have access to the users and liquidity from just one protocol, leaving behind many opportunities presented by other chains,

Appreciating the interest shown by Instaraise in adopting Metachain, Zhuang listed the benefits of offering seamless fiat-crypto-fiat on/off-ramp to the users, encouraging easy adoption, and attracting more assets from other protocols, and more importantly, the advantage of arbitrage across DEXs to further reduce impermanent loss, etc.

The Future as We See it

While DeFi has a huge potential to change global financial systems, it will increasingly come under regulatory scrutiny, especially after the LUNA affair. As the debate continues, on whether regulations are good or bad, everyone in the discussion agreed that the governments and traditional institutions are now more open to incorporating and encouraging the industry, albeit with some caution. The KYC and AML requirements that some consider a hindrance to the industry growth are also important for increased adoption.

As institutions now levitate towards public blockchains, changing their previous stance in favor of private chains, the interoperability between chains gains new significance. Our focus at Instaraise is to create a sustainable, user-friendly DeFi ecosystem, starting on Tezos and eventually incorporating multichain capabilities through partnerships with the likes of ShuttleOne to enable free flow of liquidity across protocols and assets classes while erasing the boundaries between DeFi and TradFi.

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DeFi tools

Instaraise IDO Recap and Roadmap

Public Sale Recap:

We have successfully completed our public sale on 9th September 2021 on Instaraise’s own platform.

The sale was supposed to be held for 72 hours but surprisingly the whole token pool was exhausted within the first 60 seconds of our public sale.

In our Public sale, more than 272 whitelisted investors participated, out of which 34 got Lucky to get into the Sale, 33 addresses transactions got rejected due to oversubscription.

6 Addresses invested ~ 2,000 XTZ!

Premium NFT Airdrops to top 5 Participants ! Teaser on it’s way for the Instawhales

Our Upcoming Roadmap:

We are excited to announce that our token listing is live on Quipuswap!

Our next goal is to bring high-quality projects on the Instaraise platform for our community. We are going to launch our governance token in near future with multi-fold utility for both tokens. We want to reward our highly supportive community as much as possible with these initiatives. More details will be coming out in near future.

Improvements in the IDO Facilitation like NFT Based presales, Pool weight Tradability are on the road along with in-house Yield Farms for interacting with different available farms from Instaraise Dapp.

Incentivization for INSTA Holders and LP Providers

It’s just the start where we started the collaborations with different Tezos Dapps which can be beneficial for any project. Our Strategic partners will bring on a huge leap for the Projects we are incubating and nurturing their Sale.

We enlarge the scope of Marketing support for the Projects we onboard to a new level :

  • The projects coming aboard with us, we help them structure their sale and help them ground up to make their fundraising successful.
  • We help with Tokenomics, Listing, Token Specifications, and much more to make the sale a success.
  • Connects for collaborations with different protocols that help in marketing the product to the dedicated users.
  • Social Media pushes the Ecosystem about the product.
  • Connects with Farming and Staking Solutions in place to integrate into your platform after launch
  • Dedicated Advisory throughout the progress of the Projects can be provided by the best in the Industry.
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DeFi tools

Instaraise Token Utility

Main Takeaways

  • This article explains the Token Utility/Usage of $INSTA which comprises the Staking Provisions that will be used for the allocation of Pool Weighted Score and how HODLers are leveraged with it.
  • $INSTA Token utility
  • Reasons to HODL $INSTA ( all Incentives in a nutshell )
  • INSTAs Deflationary model that will frame the future of $INSTA token

To operate the launch pad, offer staking rewards, competitions and marketing we are launching a $INSTA FA 2 (Non fungible) token. Users will need to hold this token to be eligible to participate in IDO OTC (Over the counter) funding campaigns. This token is also a reward token where we will be rewarding holders for being a part of the community.

Token Specifications

$INSTA will be an FA2 compliance token with Token ID: 0

$INSTA is a utility/Governance token on Tezos used for Sales in our IDO at a later stage.

The Details of the Token Distribution is discussed here : https://docs.instaraise.io/usdinsta-token/tokenomics

Token Utilities

The Instaraise native token ($INSTA) is a membership utility token. It grants holders access to IDO Launchpad deal-flow, information flow, and specific presale rounds.

Staking or holding $INSTA tokens grants holders access to the more restricted projects that are essentially “more interesting” or “more popular” or “more exclusive.”

Highlights

Allocation in the Presales

HODLing INSTA will give users privileged access to the Presales happening in the Instaraise Launchpad.

All the details of the Staking Amount are mentioned in the Tier model (https://drive.google.com/file/d/19hIYyqP07IabKfFwvqkEMhqLt8jxbuLY/view) that takes the staking amount as well as the Staking Time into consideration while giving the pool weighted allocation for any person in the private sale.

INSTA Staking

INSTA staking is an in-house staking platform which helps you to earn more INSTA tokens by staking the amount required for the Allocation, making the staking process incentivized.

As an investor even if there is a latency (delay in the process and execution of large volumes of transactions) in the projects you still earn more INSTA as a part of our yield generation process. Your money is never idle!

*This can be claimed to the Users wallet whenever they want.

INSTA-XTZ LP(Liquidity providers)Farm

We also have an in-house INSTA-XTZ LP Farm that generates high yield for the users who provide liquidity to INSTA in Quipuswap. It adds an effective INSTA liquidity for the users to trade in the DEX

Presales in terms of INSTA

We offer INSTA Backed Presales which will help to invest in token Presales with INSTA tokens. Early holders can benefitted who bought the tokens early. At later stage holders can use use it for Investment purposes in the upcoming Presales later this stage.

Listing and Incorporation Fee

We charge a fixed amount worth $500 in terms of $INSTA Token that will be 100% vested for 2 years and will be used for incentivizing the community. (This amount is only charged for the project owners who have done their explicit whitelisting after crossing our due diligence )

A variable charge of 4% of the token sale amount will be deducted in terms of the Project Tokens.

From that:

2% goes for the development of Instaraise.

1% Swap to $INSTA for 2 years vesting.

1% will be airdropped to random 10 users participating in the sale.

INSTA backed NFT(Non Fungible Token)

With the next versions, we are bringing Global Allocation PWS Score based tickets. Score that decides the pool allocation has 2 major factors ( Staking Amount and Staking Time ) With NFT Based credit delegation we make sure when someone doesn’t invest or wants to leave the platform can get incentivized for the time they have spent with the platform staking. And the score does not lose its time royalty by getting nullified when someone unstakes.

We are bringing an innovative approach for the first time in the IDO ecosystem where a user can create an NFT associated with the score. That NFT will be deciding the Pool Allocation in the further projects.

Someone can sell the NFT with the Valuation of :

Staked Amount + Stake Time Increment

This opens up a new Trade paradigm where a person can grab an NFT from other users and start getting the allocation with respect to their score.

Reasons to HODL $INSTA ( all Incentives in a nutshell )

  • Allocation in Presales
  • Staking Yields
  • LP Farming Yields
  • INSTA Backed pre-sales
  • INSTA NFT trades and Auctions

INSTAs Deflationary model

In this part we elaborate how our deflation model helps the future of the $INSTA Token

  1. Withdrawal fees in the INSTA Farms are time based and whatever the amount is collected those are burnt manually after an interval of every 10 days.
  2. Fixed listing and incorporation fees are taken in terms of INSTA and are locked for 2 years.
  3. 1% of the Token Variable Fees are swapped to INSTA and burnt. This makes sure that more the projects coming up with INSTA, more will be the deflation, empowering the HODLers of our INSTA community.