Scientix (II): Why does Alpaca prefer Scientix?
Authorized release by Blockchain Lao Li
Today let’s continue to talk about Scientix Finance. (For the previous article, please see here) Yesterday I posted the first article about Scientix Finance. It mainly talked about the increase in investment and unknowingly paying off the debt after Allen used Scientix.
Allen’s wife Eva was not aware of the mechanism, so she asked her sister Amy, who works in a bank, to consult if it was reliable. After a few days of research, Amy told Eva about the mystery of Scientix:
You must be familiar with the bank and credit card. For example, Eva has 100,000 deposits and a monthly income of 10,000 at the W Bank where Amy works. The bank uses a model to calculate Eva’s credit limit and then grants her a credit card with a limit of 20,000. Eva can use this credit card, but there are two problems: 1. If Eva uses this credit card to withdraw cash, there will be a high handling fee; 2. Eva must always remember the due date of each month and pay the minimum. If Eva missed repaying the credit card on time, the penalty fee is very high, about 0.1% per day.
Okay, if Eva deposits this 100,000 in the newly opened M Bank, and M Bank has an innovative business, that is, you can immediately get a cash withdrawal limit of 50,000, and cash it out at any time without handling fees. You don’t need to pay back the loan every month. M Bank uses the investment income from your 100,000 deposit to help you repay it on a regular basis.
So, W Bank and M Bank, which one would you choose? The answer should be obvious, M Bank.
The innovative business idea of M Bank is the logic of Scientix Finance. This should be the reason why so many people believe that in the near future, the rules of the game in the financial circle in the real world will be changed by the blockchain DeFi.
After talking about what Scientix can bring to ordinary investors, let’s talk about what role Scientix can play in Alpaca’s perspective.
The readers must be familiar with what Alpaca does, leverage mining + vault pool. Simply speaking, Alpaca is a financial tool that is grafted onto a decentralized trading DEX to help you add 1–4 times the suitable leverage and increase the mining yield. Therefore, before the cooperation with Scientix, the LP underlying assets in Alpaca’s pool came from two DEX partners: Pancakeswap and Wault. They are considered as the downstream chain partners of Alpaca. The funds for Alpaca need to be placed on the LP of DEX only by adding leverage to earn excess income.
But to be honest, this is to add funds for DEX. Currently, Alpaca’s TVL is around $1.5 billion. However, this may not last forever, so what should Alpaca do? The answer is to expand the upstream chain of partners. Can other DeFi also add funds for the alpaca?
Therefore, Scientix has become the most important part of the Alpaca commercial landscape at present. It completes the emptiness of Alpaca’s upstream chain. Moreover, Scientix is inherently able to double the capital, that is, the matryoshka mechanism, which was briefly introduced in the previous article.
Combining this with the information about the Alpaca team building in the past few months, we can see how much Alpaca is eager to increase capital value. According to news from the Alpaca community, Alpaca hired a dedicated institutional fund service contact person in July (the real person has already appeared on the AMA, not anonymous) to communicate asset management matters with large institutions.
Think about it more deeply. If institutional funds are negotiated, how can they be given to Alpaca? There needs to be a channel. The most suitable platform is a platform like Scientix. Anyway, all funds are managed by Alpaca, and the income is directly to offset the debt, and the balance sheet of the investment can be balanced every month. The financial team of large institutions should not be happier.
Some people may ask, why can’t it be directly given to Alpaca? Not compliant. Investors will not allow this too. This means mixing up the capital from the shareholders, borrowers, and the investors, instead of entrusted management of assets. Just as private equity companies in the real financial circle never put investors’ money in GP or fund management companies, they need to build a fund platform to put it in. So Scientix plays the role of fund platform channel.
Ok, the next article will continue to talk about the successful cases of this model on Ethereum.
The author solemnly reaffirms: As of the time of publication, the author has an interest relationship with the project mentioned in the article, and hereby informs it. Interests include but are not limited to the following situations: I am a member of the project team, I am an immediate family member or spouse of a member of the project team, participate in the investment in the project, hold the shares or tokens issued by the project, participate in short or long the project, collect rewards for paid writing, etc.