The DeFi market experienced exponential growth between January and April 2021. Its market size surged 300%, rising to $64 billion from the market value at the beginning of the year. However, the trend took a nosedive. According to Analytics Insight, the market capitalization of decentralized finance fell by a significant 45% to $48 billion. This is an indication that investors are gradually losing faith in the current DeFi market, mostly due to the high rate of scams. It is therefore imperative that DeFi projects innovate to nip this issue in the bud.
OrionSwap DeFi protocol has adopted a new decentralized finance model aiming to tackle the rising hacks damaging the legitimacy of the market. CipherTrace revealed that criminals made away with $240 million from different DeFi projects. Suppose the current DeFi market hopes to promote investor confidence. In that case, there must be ways to eliminate the activities of hackers and ensure a healthy marketplace for both investors and DeFi community users. Before we go ahead to analyze the approach of OrionSwap new DeFi model, let’s take a look at the project.
OrionSwap DeFi Protocol
OrionSwap is an automated money maker that is built on the Binance Smart Chain. It one of the newest DeFi protocols launched on BSC. The goal of OrionSwap is to improve the legitimacy of the DeFi marketplace and help reinforce investor confidence. Therefore, the platform has adopted a three-pronged approach in its new DeFi model to eliminate hacks and ensure a healthy marketplace.
OrionSwap also has its token called the Starfield. The token will serve as a reward for OrionSwap farms and its Galaxy Pools. They established baseline emissions of 82.5 Starfield for each block in the protocol. While 51 tokens go to the farms, 24 go to Galaxy Pools, and the remaining 7.5 go to a dev pool that gets burned weekly. At the time of this writing, all the dev tokens have been burned, while the rest has been locked in liquidity.
The OrionSwap new DeFi Model
To achieve its goal, OrionSwap adopts three approaches to help create a better DeFi marketplace.
Creating educative and informative contents for the DeFi community
Crypto influencers and thought leaders always advise beginners and investors alike to do their due diligence before investing in any project. The problem with such kind of advice is that people can get information from the wrong sources and act on it. Therefore, to ensure the DeFi community always has access to the right information about DeFi projects, OrionSwap is creating educative and informative content about the DeFi market. They teach people how to calculate APR or APY and the factors they should consider. Through their content creation, they help people understand the concept of yield farming and what it means to provide liquidity.
Non-inclusion of flashloans in its ecosystem
Flashloans help developers instantly and easily access loans without collateral. However, hackers have found a way to leverage the flashloans in combination with other actions to exploit DeFi systems and make away with people’s money. Although flashloans are essential for arbitrage and liquidation on DeFi systems, OrionSwap believes the disadvantages outweigh the advantages. This approach has divided the DeFi space as many believe flashloans are indispensable.
Building a self-sustaining DeFi community
According to OrionSwap, having a self-sustaining community will place the responsibility on all members and not just a few people. It will also give control to the community as it will mean the community owns the project. This is the major reason why OrionSwap did not lock any liquidity when they launched the Starfield token. Instead, the community is saddled with the responsibility of farming the tokens. They have organically grown the liquidity of both Starfield-Busd and Starfield-BnB to $5500.
OrionSwap is following a new path that will help bring more awareness to the rising negative impact of scams on the DeFi market. Many people have expressed their disagreement with OrionSwap’s new DeFi model; it is the right step in the right direction. The solutions can always evolve and get better to serve the DeFi market.