This past week I had delays caused by an airbnb I rented which not have WiFi as advertised.
This led to some issues developing through my remote desktop, but I’m here with a quick update as to the progression of DefiHedge, as well as a quick introduction to the project in general.
How It Works:
DefiHedge at its core is relatively simple.
For every swap there is a fixed and floating side.
In our example, the current Compound rate is ~8%.
Our first user, Alice, wants a 1 year fixed 5% rate and has $1000 in principal.
Our second user, Bob, wishes to take a leveraged position on the Compound rate.
Once Bob accepts Alice's order for a 1 year 5% fixed rate, Bob has agreed to back Alice's fixed rate with $50.
Both user's funds are then pooled together in the DefiHedge smart contract until the term completes, at the same time minting cTokens on Compound in order to generate interest.
Once the lending term has completed, either party can initiate a return of funds.
Alice is returned her $1000 principal, in addition to the expected $50 (5% yield) which Bob had initially committed.
Assuming the rate has remained an average of ~8% over the duration, Bob is returned $84, a 68% return on his $50 investment.
Initial Proof Of Concept (Post ETHDenver 2020)
Development Goals for Kernel:
The goal going into Kernel has been to begin the work on the first DEX built on top of the DefiHedge Protocol itself.
Our contracts have been relatively concrete since June and that said our goal moved towards providing an open source framework for our own decentralized interest-rate swap venue, in addition to providing others an easy way to build their own on top of the DefiHedge protocol (Similar to the design goals of 0x).
Current Progress:
Over the past two weeks I’ve developed our landing website, DefiHedge.Finance as well as an additional deployment on IPFS @ DefiHedge.Crypto .
Regarding our application itself, I have spent a large amount of time working through the recently open-sourced Loopring DEX codebase and have begun the process of removing components that are unnecessary for our use-case. Generally speaking, I hope to use their DEX as a framework for our interest-rate swap venue, given the mechanics are effectively the same.
Regarding User testing, due to the internet issues I was unable to participate with the live feedback sessions. That said, I applied the concepts presented in the Deepwork sessions as much as possible to a 1 man team, primarily regarding user testing.
To do this I relied on the input of the Ethereum developer discord.
Findings:
Users want a simplified interface in addition to the exchange interface
The exchange interface must clearly visually indicate which side one is purchasing
The order book must display volume based on the side the user is currently selecting (e.g. using the example above, the floating side would see Alice’s order as $50, rather than $1000)
Fellow Kernel member suggested Opyn as a case-study on exchange interface vs simplified interface
Current Interface: