Meta-DeFi protocols are becoming more popular following the success of Yearn.finance. The project is basically a pruning fund that allows people to engage in complex strategies for developing control codes or GTs based on other protocols.
Yearn is just a business – it sells the tokens that it receives through its activities. But the new venture wants to change this concept to focus entirely on the governing power these tokens provide. PowerPool is a descriptive control protocol project that seeks to centralize control codes for all platforms under one roof. Developed by a group of anonymous developers, it is rapidly gaining support in the business ecosystem, and companies like Delphi Digital are coming into this position.
In addition, OKEx has announced that they will include the PowerPools CVP token among other new tokens such as Sushi and YFV, with exchanges that are primarily focused on China as follows. Jay Howe, CEO of OKEx, told Cointelegraph that the decision was prompted by the exchange’s “commitment to foster the DeFi space,” which includes support for “new and future DeFi protocols.” At the same time, he stressed that OKEx was not an investor in the project.
Cointelegraph also spoke with one of the developers of the anonymous protocols, who uses the pseudonym “Leroy,” to learn more about why prominent investors are showing interest in the project. In fact, the protocol is intended for both the main players of the ecosystem and the secondary token holders.
How does PowerPool work?
The protocol works in the same way as the current lending protocols like Compound or Aave. Users who are not interested in governance can participate in their own governance tokens, such as COMP, LEND, YFI, or MKR, which can then be borrowed by other people – for example, the main stakeholders. To do this, they must pay interest, which can be interpreted as an exchange of votes for money. However, Leroy disagreed with this classification, stating:
Not certainly in that way. Individuals can “delegate” or “collect” their votes in order to receive an interest rate or a loan. We currently have two options for using GT in our protocol, lending or collecting GT to generate interest using a money market model, or using GT as collateral for a loan in other symbols such as stack coins.
Thus, by adding GT to PowerPool, users can expand the utility of their GT by adding cash flow to their token inventory in the first case, or by taking a loan in the second. In any case, they also receive CVP through the liquidity extraction mechanism.
Hence, they do not “exchange” their votes for money, but rather add tokens to the group to earn interest – or the ability to take out a loan using their GT property as collateral; and as they become the owners of the CVP, they also “trade” their votes for the ability to influence the vote. In other protocols using CVP. ”
Why create a new project?
Much of the description matches what platforms like Aave and Compound are doing now. The question is why the PowerPool exists as a separate device when something similar can be done elsewhere. Leroy highlights potential conflicts of interest:
“For example, Aave now offers loan markets for GT vehicles. They also decided to use the idea of using the included GTs for voting. Lenders decide how general GTs vote. Let’s take a look at the question when GT is COMP. So it looks like COMP holders are delegating voting rights. ” Lenders – Competitor Protocol!
Ditto if JP Morgan allows the board to vote for Citibank. Strange and inconsistent. In our opinion, this requires a separate project, because it should be a neutral platform, not related to any other protocol. ”
What is the purpose of introducing control codes?
According to Leroy, the PowerPool solution is similar to other protocols, but the goal of the project goes beyond simple lending:
“The ultimate goal of PowerPool is to create a descriptive Web3.0 control layer. If enough tokens are collected, the wider community of majority, minority and protocol politicians will participate in governance with CVP. ”
I mean, at least they will have a large share of the vote, or they will be a “loud voice” heard throughout the industry. They can influence the development of the entire industry, set certain standards, for example, types of guarantees, etc.
The goal is to solve the problem of voter apathy, increase the value of GT holdings and increase the capitalization of votes, since the more tokens are voted, the safer the voting system.
How does this resolve voter apathy?
On the first page, grouping tokens just for interest is the opposite of solving the indifference problem.