The arrival of DeFi

Welcome to this week’s edition of RHIZOME Wire!

Defi has arrived

While this week was yet another one full of exciting news and development on the ICON network, what stood out most to me was the announcement of Balanced, the first DeFi project on the ICON Network:

Here is a segment from the announcement:

Native protocol tokens like ICX are too volatile for payments. If we use ICX as collateral instead, we can create stable tokens to pay one another within the ecosystem. DeFi is essential to the success of any decentralized public blockchain protocol, and we’re excited to work on the first piece of ICON’s DeFi ecosystem.

I’ll be providing a more in-depth dive on why Balanced is important for the ICON ecosystem, but for now I’ll focus on a couple key points.

From a general standpoint, the launch of Balanced brings overall stability to ICON. I don’t need stability from a network perspective — but rather, an economic one.

One of the biggest criticisms of cryptocurrency is that its volatility makes it hard to use as a form of payment or currency. If people believe it will go up, they won’t want to spend it. If people believe it will go down, they won’t want to accept it. In most cases, people tend to have a belief of both outcomes in their mind, which can ultimately lead to a lack of use as a form of payment.

As the ICON system has continued to mature, the number of ways to use ICX has continued to grow. For instance, P-Reps earn ICX which can be used to fund initiatives to expand the ecosystem. ICONists can use ICX to gamble on ICONbet. The ICON Foundation and other P-Reps are providing community grants denominated in ICX.

In these cases, the lack of a consistent price of ICX makes it hard to fund these activities. For instance, a team could submit a grant to fund a project for 100,000 ICX. However, after only one month, perhaps the value of ICX has fallen by half. Now, they’re going to be underfunded unless the terms of the grant are frequently adjusted.

By injecting a stable coin into the mix, it allows for a more consistent form of payment. By receiving ICD (the stable coin of Balanced), it won't be necessary to constantly calculate the price of ICX. More importantly, it won’t require the recipient to immediately sell ICX to lock in the USD equivalent. If they have 100 ICD, they’ll have $100 USD worth today, tomorrow, or next month, regardless of what the price of ICX does.

Meanwhile, Balanced provides another incentive to not sell your ICX. By depositing your ICX holdings as collateral, you benefit from the following:

  • You will still continue to receive staking rewards, since the collateral pool continues to earn those and distributes them to those who deposit their ICX (for more details on this process, be sure to read the white paper).

  • You will also receive mined Balanced tokens by depositing collateral.

  • With your ICD that you have received via your collateral deposit, you have the ability to “take advantage of the 0% interest rate to borrow ICD and sell it for an Ethereum stablecoin. Then lend it at a higher rate using the Ethereum DeFi ecosystem.” (According to the Medium announcement)

These all provide opportunities to further grow your ICX holdings (and accrue Balanced), potentially adding value even beyond staking. With these new incentives, there will be even further inducement to hold, rather than sell, regardless of price.

All of that is good for ICON and ICX.

More to come in the near future…

News From ICON World

ICONLOOP and Saramin HR signed an MOU to to build a Blockchain-based HR recruitment ecosystem

ICON Foundation:

The purpose of the MoU is to increase Saramin’s customer experience and value through ICONLOOP’s blockchain certificate issuance and management service ‘broof’ and its digital identity platform ‘MyID.’ Furthermore, it will contribute and collaborate in building a more robust and vibrant blockchain-based digital ID and verification ecosystem in Korea.

Accordingly, RHIZOME team member, Brian Li wrote an in-depth post examining the potential implications and intricacies of the announcement.

P-Rep team “Blockmove” introduces it’s latest development - ICON Vanity Address Generator

Blockmove has also released it’s January update, viewable here.

RHIZOME Report EP14 has been released

In the fourteenth installment of RHIZOME’s podcast series - The RHIZOME Report, Brian Li and William McKenzie of RHIZOME sit down and discuss the latest developments in the ICON ecosystem.

Min Kim opens up discussion on P-Rep responsibilities/duties

The ICON team published a new LFT2 repository on GitHub

Thanks to ICONation team member Spl3en, ICON has been working on a new consensus algorithm inspired by PBFT that improves transactions per second (tps) on the network.

Accordingly, the ICON Foundation responded to the tweet by stating “More to come….”

The broof is in the pudding

Issue #5 of ICON newsletter has been released. Last week, ICON announced that POSTECH would issue diplomas to all 828 of its graduates utilizing broof. Accordingly, an actual POSTECH digital diploma was shown within the newsletter.

The Korea Financial Services Commission and Seoul Metropolitan Government are launching educational programs

Earlier in the week, the Korea Financial Services Commission announced that they alongside the Seoul Metropolitan Government “ will provide KRW19 billion over a 4-year period (2020-2023) to launch educational programs aimed at cultivating more specialists in digital finance”.

It’s important to note that the Seoul Metropolitan Government is mandated to use ICON’s loopchain as its standard blockchain platform.

New MetrICX features are on the way!

RHIZOME posted a sneak peek of new MetrICX features that are in development including multi-address support, dark mode, and more.

DeFi is coming to ICON

Decentralized Finance (DeFi) is coming to ICON. BalancedDAO, a new DAO with collaboration from P-Rep teams ICX_Station, Parrot 9, and iBriz-ICONOsphere seeks to bring DeFi to the ICON ecosystem.

Number of P-Reps reaches 100!

The P-Rep team “RHYTHM” has recently joined the list of ICON P-Reps, bringing the total number of P-Reps to 100.

Corey Costa of UBIK Capital interviews the ICONbet Community P-Rep team

Corey Costa of the P-Rep team UBIK Capital has released his latest podcast interviewing the ICONbet Community P-Rep team.

ICONLOOP Selected for Busan Fintech Incubator

From The Iconist:

The southeastern port city of Busan announced Wednesday that the blockchain development company is one of five additional fintech companies selected to move into U-Space BIFC.

While it appears that, with only three employees, the expansion is somewhat modest, it still is an expanded physical presence which we can assume will continue to grow. Either way, more good news for the ICON ecosystem!

Blockchain Industry News

Why DeFi’s Billion-Dollar Milestone Matters - CoinDesk

It was only December when the entire decentralized finance (DeFi) market was worth less than $700 million. Early this morning, it hit $1 billion, a figure that even the most fervent blockchain skeptics would have a tough time dismissing as meaningless.

Inside Chainalysis’ Multimillion-Dollar Relationship With the US Government - CoinDesk

Federal agencies have spent at least $10 million ($10,690,706 to be precise) in American tax dollars on Chainalysis’ tools, services and training since 2015, when Chainalysis was founded, according to 82 records of federal procurement contracts reviewed by CoinDesk. Counting contracts with possible extensions, the company stands to take in more than $14 million.

US Authorities Charge Crypto ‘Trading Club’ Operators With Defrauding 150 Investors - CoinDesk

The SEC alleged in a press release Tuesday that Ackerman and his business partners operated Q3 Trading Club and Q3 I LP, raising $33 million by telling investors, many of whom were physicians, that he had developed an algorithm capable of generating profits by trading cryptocurrencies.

Coinbase Revives Margin Trading, With Conservative (for Crypto) 3x Leverage - CoinDesk

The San Francisco-based exchange said Wednesday in a blog post that its new “margin trading” feature provides leverage up to three times or "3x" for individual investors in 23 U.S. states, including the lucrative New York market. The leverage is also available to institutional traders in 44 states and nine countries.