EOSREX – Will EOS DeFi work?

A relatively large-scale DeFi project called EOSREX has been launched on EOS. It was started by eosnewyork, a major BP (Block Producer, similar to a miner).

When I first heard about DeFi on EOS, I thought, “There’s no way that’ll be successful lol,” but after doing a quick look, I found it to be quite interesting, so I’m writing this down as a reminder.

1. Why EOS DeFi is “bad”

2 . What is EOS’s DeFi that makes sense?

3.What is EOSREX?

Why EOS DeFi is “bad”

It may sound a bit exaggerated, but if yoy try to use it and write contracts and deploy it, you will understand. EOS is a “cloud that acquires cryptocurrency by preventing the state from being tampered with carelessly.” It’s like taking the best of the cloud and the blockchain. The state is determined by the competitive algorithm DPoS, and by sharing it with miners (such as BP), it deals with problems such as double spending when issuing and settling currency digitally, while at the same time, it is a system that has acquired the speed and flexibility of the cloud.

In this context, EOS has characteristics that make it impossible for autonomous decentralized finance like Ethereum to be established.

The first is that contracts can be edited at any time. Ethereum also has a notation for updatable contracts, but DeFi, i such as DAID, deliberately limits the parts that can be updated to ensure that management does not intervene more than necessary, maintaining an autonomous decentralized system. On the other hand, Ely allows contracts to be edited, so this guarantee does not hold. Therefore, the autonomous decentralized behavior is left to the conscience of the management.

The second reason is that EOS cannot be held in the contract itself. So basically, you have to send the money to an operating wallet. Therefore, the advantage of DeFi, which is non-custodial, cannot be utilized.

So it is not very reasonable to expect it to be a pure financial application, so wouldn’t it be better to notify the authorities and build a financial system with existing servers and clients? For DeFi, wouldn’t Ethereum, which can run autonomous decentralized contracts, be enough?

What is EOS’s DeFi that makes sense?

Essentially, being logical means “making use of the strengths and features of EOS.”

In short, it makes sense to have a service that is not financial in nature. In other words, a main service that plays a secondary role in finance.

For example, DeFi could be thought of as a way to provide liquidity to gambling, which is popular on EOS, and receive a portion of the fees in return for preventing a shortfall in funds. The essence of this is not to provide liquidity and earn interest, but to gamble.

In this way, finance as a secondary role in smoothly running a system can be said to be a DeFi strategy that makes use of the strengths of EOS.

What is EOSREX?

Now let’s move on to the story of EOSREX.

What is this thing?

This is essentially the sharing of computing resources. It is often said that EOS contract execution is free, but this is half a lie. To issue a transaction on EOS, you need to borrow computing resources called CPU/NET. This can be obtained by staking EOS tokens. Contract calculations can be performed according to the amount of EOS tokens staked.

You can stake like this (Scatter)

However, there are times when you need computing resources temporarily. Conversely, there are times when you have excess computing resources (like me right now). EOSREX allows you to purchase REX tokens and lend those computing resources to others. A portion of the usage fee becomes interest and is returned when you exchange REX tokens for EOS tokens again. (By the way, REX tokens are not technically tokens, and cannot be traded.)

In addition to buybuyingX tokens, you are required to vote for a BP, but when you purchase REX tokens, you will continue to stake for the person you voted for (convenient!)
. This is a feature that is typical of Eosnewyork, a major BP.

As we have seen so far, the essence of EOSREX is not finance. Its essence is to improve the liquidity of computational resources, which are essential for the future development of EOS. Therefore, it is natural to think of the interest rate for depositing REX tokens as a micropayment-like fee based on sharing, rather than an interest rate.