BitWell AMA | Introducing Inverse Finance: Master the Game Of Positive Sum DeFi
On Aug 12th, Patb, Head of Growth at Inverse Finance and Nakamomo, Head of Community and Governance at Inverse Finance visited the BitWell community and brought a wonderful sharing with the theme “Master the Game Of Positive Sum DeFi”.
The following is a review of the full content of this community sharing!
Host Q&A
1.Could you please give us a brief introduction of Inverse Finance and what problems it intends to solve?
Patb:
Sure — Inverse was started by our founder Nour Haridy in late 2020 …
We are taking a unique approach to decentralized stablecoins and money markets that we believe is the most sustainable model out there and it is still improving …
As many saw this spring with UST and now more recently with USDC, we still have work to do to build a durable and scalable decentralized stablecoin — or a group of them across the industry
So … this is what we are all about … creating the stablecoin that can under-pin a more high growth DeFi industry that today is just a fraction of the total volume/TVL of tradfi …
So that’s the quick intro on what our mission is all about … 🙂
2.We wonder what Positive Sum DeFi is and how it helps users increase their earnings?
Patb:
Ok couple of parts to this answer (my first time doing text AMA so please bear with my slow typing!)
First, most governance tokens are what we call “useless” … they really do not accrue any value and *might* be useful for voting though for most holders of those tokens, they rarely exercise their governance rights. We think this is very 2020/21 thinking and governance tokens, like INV, in order to have value must accrue real value in some way. It’s a really good exercise, we think, to ask yourself when investing how does a governance token accrue value? Many have no mechanism … other than hope/hype.
So … we thought hard on this question and launched Inverse Plus back in February which ensures revenue sharing with INV token holders (who are staked on inverse.finance) as we hit certain milestones with our stablecoin, DOLA.
Everything we do at Inverse — businesswise — is geared towards returning capital/value back to INV holders/stakers
So … to really take advantage of Inverse Plus requires staking on inverse.finance — not currently possible to do on Bitwise but maybe we can discuss later if Bitwell users are interested. But another side of Inverse Plus is its mechanism for building liquidity — mostly on DEX’s — that we own
So we are in a close partnership with Olympus, for example, to facilitate protocol owned liquidity
3.Could you now give us an insight into the tokenomics of $INV and $DOLA?
Naka Momo:
DOLA is a stablecoin which price follows the USD and it is a bit different from USDC or UST that were mentioned before
Both of them are/were centralized (even iv UST had partial decentralization) and USDC is backed by real-world USD “paper”, while UST used a secondary token to support its peg
INV is only used as a governance voting token and as collateral for borrowing DOLA in our money market Frontier when DOLA borrowing is available
Patb:
UST = “algo stable” or algorithmic stable
USDC = centralized stablecoin, can be censored, frozen, zapped, etc.
Friends dont let friends use algo stables
We are seeing in real-time what is the next step for centralized stables like USDC or USDT …
USDC froze many accounts this week that were tied to a controversial app called tornado cash …
Circle operates USDC …
Naka Momo:
We started out in the hard core end of the decentralized spectrum with 100% of all decisions made through DAO voting and it is one of the things that we are most proud over. INV allows us to govern effectively without having to worry that someone even has the power to rug or make arbitrary decisions on their own
The team or anyone else at Inverse Finance have no power to freeze or in any way manipulate DOLA or INV held by anyone, unlike centralized actors like Circle
DOLA comes into existence by users depositing collateral in our or our partner’s lending markets, and borrow DOLA against it. this means that there always is collateral to repay any debts in case of liquidations
We increase or decrease the supply of DOLA in the lending markets to alter the borrowing interest so that we can let people borrow cheaply to get more DOLA into circulation, or at a higher interest to decrease the supply
This is a powerful mechanism to maintain the peg and it becomes stronger the more partners we include
4.Could you elaborate on the utilities of Inverse Finance Token and how it can benefit Inverse Finance users?
Naka Momo:
As a long-term part of the Inverse Plus initiative, we began working on a way to share the protocol revenue with INV stakers in the form of DOLA which would close the loop and create the positive sum game that rewards INV holders directly
5.does the Inverse Finance team have any exciting initiatives that are planned in the pipeline?
Patb:
Yes!
Two areas — one I can provide some details and another is still secret but will provide some hints
The first is in the area of liquidity — — a big deal for stablecoins is ensuring you can trade them in many places without “slippage” while ensuring they maintain their peg to the US dollar … part of achieving this is growing the amount of liquidity (or pairs of DOLA and another stablecoin like DAI) available to users across chains, DEX’s, CEX’s etc.
So we are about to announce some important expansions of our liquidity plans on Ethereum and Optimism, a Layer 2 chain that runs on top of Ethereum that is high-throughput and low cost .. very exciting possibilities there
The second area I will get in trouble from Nour if I say too much but we are in the process of pretty radically re-inventing the way money markets work
Many of you know Aave and Compound and both are pretty “old” in crypto history — 2019!
And they have some security and efficiency weaknesses
We currently use a “fork” of Compound on our money market but …
You should soon start hearing about a very new approach that is more capital efficient, more secure, and ultimately way, way more profitable for investors
We’re doing a ton of work on it internally and are looking to start early testing soon — if testing goes well we will propose it to the DAO community for approval
But if you are an INV holder we think you’ll be pretty pleased with where this is all going
Community Live Q&A
1.Do you have a AUDIT certificates?or are you working to AUDIT your project, so that the security of the project becomes more secure and reliable?
Naka Momo:
Good question. security always has to be top of mind in defi and Inverse Finance has established a risk working group with contributors who identify and classify risks. other than internal reviews and testing of new products, we also employ third party auditors and will publish a bug bounty shortly
2.IS This Your project only for elite investors, how about others with small funds, is it open to everyone?
Naka Momo:
Inverse Finance DAO has had no “early investors”. the INV token was airdropped to early governance voters so there are no VC’s. several contributors have been awarded vesting INV to make sure that they stand to gain or lose along with the project but we need them to vote
As always, only use official links from the discord and don’t accept any DM’s unless you asked for it publicly!
3.How many team members do you have? Do they have enough experience in the blockchain field? Do they have any experience on working in crypto and non-crypto project?
Patb:
International expansion is something we really need to improve on here … especially in Asia where @donut99 is based! We seem to have a fairly heavy North American user base but we want this to change … we’re in the early stages of expanding our language operations to include Chinese-language content and we’re always up for help manning our international channels in our Discord https://discord.gg/Sv3xg9e5 but very much interested in ideas/opportunities to expand Inverse outside NA/EU users!
4.What are your plan to spread awareness about your project in different countries where English is not good?Do you have local communities like Indonesia,Thailand. So they can better understand your project?
Patb:
We do have an ambassador program for business development purposes … if you are interested and want to share your ideas on how you’d like to help please pop into our Discord https://discord.gg/Sv3xg9e5 and introduce yourself in our partnerships channel!
5.Revenue is an important aspect for all projects to survive and maintain the project/company. How have you been able to build a complete project and what is the way to generate profit/revenue of the token? What is the income model?
Patb:
We generate revenue through interest we earn on DOLA (stablecoin) that we lend, mainly. We also earn revenue through treasury operations — for example you can see our liquidity on Curve Finance and DOLA we deploy there earns a % of transaction fees which … can add up!
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