HIP-16 vote was successful and the baseline plan is being applied. This thread is to suggest an alternative path for Hifi. As Doug said in HIP 16:
This plan is a prudent measure rather than advocacy for protocol closure, offering breathing room for the community to explore alternative paths.
I have an idea for an alternative path in mind and I’ll do my best to explain my thoughts here.
Back to the basics
The lending protocol at app.hifi.finance was originally designed with lending, borrowing and pooling in mind, using a zero-coupon bond investment model for the lenders. The following excerp from Wikipedia makes it simple to understand:
A zero-coupon bond (also discount bond or deep discount bond) is a bond in which the face value is repaid at the time of maturity.[1] Unlike regular bonds, it does not make periodic interest payments or have so-called coupons, hence the term zero-coupon bond.
(Source: Zero-coupon bond - Wikipedia)
This is where HIFI shines, you can lend and borrow with confidence. This is a breakthrough in DeFi to have a real fixed interest rate (fixed, not ‘stable’).
The idea
Let’s focus on this basic but attractive financial model that the HIFI protocol provides. In the first iterations of HIFI, the focus was on Ethereum and Bitcoin as collateral. This was before the v1 release. I think we need to go back to the roots and focus our attention on basic cryptocurrency. This is “where the users are” in my humble opinion. If we want to find a place where there is potential for a large customer base, it’s around the top 10 cryptocurrency tokens by market cap.
While the protocol has shown absolute great potential for widespread adoption, I believe the focus has shifted too fast from a potentially large customer base to an innovation/experiment hub where it’s harder to find big capital. The RWA aspect was great, but from my perspective, it’s like every new RWA asset ended up being a complex startup trying to find a new customer base.
Don’t get me wrong, the innovation and ideas with RWAs and NFTs was absolutely great, but not only we were too early, but we were not able to onboard the regular crypto chads and whales holding large amounts of classic ERC-20 tokens on board.
My (boring) idea: The main focus should be back to onboarding classic Cryptocurrency tokens as collateral. Hifi should be able to make a statement to regular crypto holders: Here’s how much you can make if you lend this amount today.
I would even go as far as making this statement more obvious on the Hifi web app itself. Connect your wallet on the app, and show directly how much you can make if you lend your tokens for 3 months / 6 months, or whatever the time period. Showing the collateral ratios is great, but I would be incentivised to lend my tokens if I was seeing directly and precisely how much I can make (thanks to the fixed rate).
This is less innovative. But this might be a way to take a step back, and try to gather the right people around the protocol again.
WDYT?
Much yours, muchfungible.