Building During The Bear
At the back end of a bloody week for DeFi, it seems as good a time as any to begin discussing bear markets and the danger of a full capitulation, in fact, with the recent annihilation of the Terra-UST experiment, it’s worth considering the future for DeFi, and what it might look like in the short to medium-term.
In this brief post we’ll outline what comes next for Helix, and what to expect from the platform in the coming months.
The Current State Of DeFi
For anyone still unaware, this week has been a rough ride for DeFi and its users, not only in the value lost, with fortunes both big and small being decimated, but the method in which it occurred. With many considering Terra, and its Anchor protocol, a safe bet, the ecosystem had seen huge popularity lately, sucking up a massive amount of TVL from other networks, and providing a safe haven for non-degenerate users of DeFi seeking a stable return.
With the collapse of the ecosystem earlier this week, heightening the pressures already felt by the market, it appears that much of the enthusiasm has left the space and the limited amounts of retail capital still to be found has de-risked, and is anxiously awaiting a bounce and the resurgence of hype before deploying again.
Trending consistently downwards even before the debacle with terra, the total value locked — TVL — within DeFi has taken a sustained hit over the last 15 days, with the bulk occurring during the last week.
Having begun the month with around $196b deposited into the various DeFi protocols, down from over $223b 1 month earlier, this number 15 days later is sitting at around $110billion.
Because of this, and other reasons, we’ve made the decision to delay the upcoming IDO for Helix, in order to wait for better market conditions. It should be noted however that the launch of the platform is still planned for the 31st May, though in a Beta state, and with Helix emissions turned off. The situation will be monitored, and when sufficient TVL and activity has been accrued by the platform emissions will be initiated and the planned distribution schedule takes effect.
After considering all of the options the current market allowed us, we felt that this is the closest to our original goal and will provide us the opportunity to deploy the platform, and begin to gain traction.
Delaying the IDO does have knock on effects, which we will consider later, but is considerably the lesser of two evils when compared to attempting a raise in this fragile, and risk adverse market.
Helix At Launch
Launching in a beta state Helix will deploy with full functionality, including the same features as previously stated, except the HELIX token emissions. In addition to this change, the choice has been made to significantly lower the trading fees on the platform, to a fraction of the competition’s, which will allow us to quickly gain traction as the lowest cost option on the network. (Details to follow)
In tandem with this strategy we will be working closely with Ethereum-based aggregators in order to gain favorable positioning, leading to a high-level of volume and platform adoption. We believe this dramatic lowering of trading fees, along with the other steps we have taken, will position the platform well for the next period of bullish sentiment.
Until then however, while brutal, the current conditions provide arguably a great opportunity for Helix yield swaps to gain exposure, both with the multitude of users seeking to still earn yield, whilst de-risking, and those attempting to speculate.
Limitations We Envisage
Low liquidity levels at launch — with no IDO, pools will be funded by LPs and other members of the community. Whilst not optimal, this situation does present the opportunity for early providers to benefit greatly. With that being said, higher levels of liquidity allow for larger trades on the platform, so this is a limitation we are taking seriously and will be in direct contact with independent market makers.
Retail capital — even before this latest bearish event, there was a clear reduction in the amount of willing funds available, and with macro conditions continuing, we should expect an extension of this sentiment. This factor has been mentioned already in this short post, and was one of the main considerations when deciding to delay the Helix IDO. As the platform is launched, we will continue to monitor the situation in order to determine a viable date for the IDO.
A bear market is technically determined wen the asset in question trades below its prior highs by 20% or more, but obviously, with this being crypto, 20% could be an average Tuesday morning and we’re still smiling. A much better indicator of the current state of the markets resides either with the BTC price ( trading at around $30k, a more than 50% draw-down from previous ATH) or the pessimistic narrative surrounding us constantly. All in all, its fair to say that its not looking great in the short-term.
On the flip side however, cryptocurrencies are receiving more hype and exposure than ever before, and we’ve seen many huge brands and web2 businesses join the space in recent months.
As OG members of the community know, we’ve said since day one of the Geobot campaign that were here for the long run, and market up, or market down, we’ll keep building.
The limitations and problems we face will be discussed in an on-going capacity with the community, and we look forward to the launch of the platform, and the release of Helix yield swaps. For more information, check out the platform docs, and join the community discord.