The Tezos Blockchain and its hidden DeFi Gems #4

The Tezos Blockchain and its hidden DeFi Gems #4

By 2sats | 2sats | 6 Oct 2021


*obligatory not financial advice*

 

 

In this series I talk about possible gems of the Tezos ecosystem. In the first three parts we went thru Quipuswap, PlentyDeFi, Magic Button, Wrap, Kolibri, Crunchy and Alien'sFarm, if you want to learn more about those projects then you can do that here:

hidden DeFi Gems #1 - Quipuswap, Magic Button, PlentyDeFi

hidden DeFi Gems #2 - Wrap, Kolibri

hidden DeFi Gems #3 - Crunchy, Alien'sFarm

 

Rocket Launchpad

Rocket is similar to the Binance Launchpad, because it makes it possible for new projects to raise funds and for investors to buy into a project before it is being traded publicly. The difference is that Rocket offers that in a decentralized manner.

To put it simply: Rocket Launchpad lets its users participate in Initial Dex Offerings (IDO), where they can swap their XTZ for the token of a project before it is available for everyone else. Such an investment is obviously very risky but it can also be very rewarding to buy so early.

To be able to participate you need to stake Rocket tokens, how much you can invest in a project depends on how much RCKT you have staked. There are three tier levels: 

  • Triangulum Tier: The smallest tier that requires 25,000 RCKT staked to participate.
  • Milky Way Tier: Requires 250,000 RCKT and allows you to invest 10 times as much as the Triangulum Tier.
  • Andromeda Tier: Requires 1,500,000 RCKT and allows you to invest 60 times as much as the Triangulum Tier.

This three tiers will be the first one who can buy the new tokens. There is also a fourth tier called First Come First Serve, that starts later than the first three and where any of the other three tiers can participate to buy leftover tokens that weren't sold. You can participate in FCFS sales with only 1,000 RCKT staked, even though the Rocket docs claim you need 25,000.

How many tokens you can get is different for each project and the minim amount of XTZ that you can invest usually varies between 10 and 25 XTZ. 

Currently there are only IDOs but eventually there will also be Initial Farm Offering (IFO), where you can stake liquidity pool tokens for the XTZ/RCKT trading pair and earn the new token as a reward, just like with liquidity mining. At the end of the token distribution the project will receive all the XTZ of the liquidity pool and the RCKT will be burned to reward the Rocket users. The advantage here is that there are no country restrictions for IFOs right now and there is no minimum level of funds needed, so it’s a great way to make the new token accessible to many people.

Rocket is as safe as it could be. All projects that are offered on Rocket Launchpad use the Crunchy Deep Freezer tool to ensure that the participants of the presale cannot get rug pulled. All smart contracts of the Rocket platform are also being audited to ensure that they are working well.

Users from the US and many other countries are IP blocked by the Rocket Launchpad website because some countries don't allow such services without KYC. I am not advocating that you avoid restrictions of your country, but you could technically still access Rocket via a VPN.

Rocket has two native tokens: RCKT and rkDAO.

RCKT is a utility token that you need to stake in order to participate in IDOs or that you need to use in a trading pair with XTZ for IFOs. Once you stake it, it will be locked for 30 days. There is a max supply of 377,984,008 RCKT and with the IFOs there will be a burn mechanism which will make it a deflationary asset. The demand and price for RCKT depends on how many projects get listed on Rocket Launchpad and how many users it has, which will be limited for the near future due to country restrictions but this could change once Rocket is completely a DAO.

rkDAO is the governance token of Rocket. It is currently being distributed via farms on Crunchy and it will give its holders voting rights for possible changes like the amount of RCKT needed to participate in an IDOs. The distribution on Crunchy will last until the 31st August of 2022 and you can stake RCKT directly or the following Quipuswap LP tokens: XTZ/RCKT, XTZ/crDAO, XTZ/tzBTC.

 

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The projects that launched on Rocket so far.

 

youves

This is a decentralized stablecoin protocol, similar to Kolibri or Maker on Ethereum. The idea is very simple: You leave XTZ as collateral and get a loan in the uUSD stablecoin. Should the value of the collateral fall and the loan is at risk to become under collateralized, then other users can choose to pay back your loan and get the collateral for themselves.

The difference between youves and Kolibri or Maker is that it will not only support stablecoins but other synthetic assets too. As example there is currently an asset being tested that is called uDEFI, which serves as sort of an ETF for the decentralized finance tokens UNI, LINK, LUNA, AAVE and CAKE. The platform uses oracles to know the value of the assets it is mirroring and backs it up with XTZ. Right now, uUSD is the only token that you can mint on the Tezos main net with youves, but more will follow soon and you could in theory add any synthetic asset.

Centralized stablecoins are often not very transparent about their holdings and many ETFs for various cryptocurrencies still need to get approved, so there is a demand for decentralized alternatives for them.

Youves has a governance token called YOU. The holders are not only getting voting rights but actually earn a share of the platform fees in uUSD if they stake their tokens. However, this doesn't come without risk because by staking YOU tokens you are consenting that your tokens can be sold to cover under collateralized loans. So, YOU holders have an incentive to make sure that loans don't become under collateralized.

Right now, YOU is being distributed to platform users as an incentive. If you mint uUSD you will earn governance tokens and the rewards are getting fewer each week. It can also be bought on Quipuswap or via the youves platform directly. There is a max supply of 4,680,000 YOU.

 

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Staking YOU tokens and earning rewards in uUSD. The APY depends on how many people use youves and can be higher than 100% sometimes.

 

I will likely make more posts like this one, so follow me if you want to learn more about DApps on Tezos.

 

 

 

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