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As some of you might know, a large part of my work takes place in the space of blockchain. I have written in the past about DeFi and the new generation of stablecoins, and also organised events on topics such as Green Finance and Blockchain, and the circular economy. On this post I’d like to talk about a fascinating project I am involved in, as part of the modelling and protocol design team: Pollen DeFi.
What is Pollen DeFi?
Pollen DeFi is a new and exciting technology that can help you manage your cryptocurrency investment with other community members.
Millions of people invest in the stock market every day, but not everyone has the same access to financial opportunities. At Pollen, we’re creating a fully decentralised universal investment system that provides equal opportunity for all.
Traders who have confidence in their skills build reputation & rank on the leaderboard to earn rewards. Users that do not want to actively trade can delegate tokens to successful managers of the portfolios who share them with those that hold the coin.
All users can gain benefits by accessing community managed assets.
So, hopefully, the name Pollen has started to make sense. The users operate like bees in a hive, exchanging information and collaborating to reach optimal decisions. A high level overview of how the system operates is shown in the figure below.
Pollen DeFi Reputation
At the core of Pollen’s protocol is reputation. Reputation determines who makes wise investment decisions and who doesn’t. Over time, reputation helps accumulate more and more power to users that make optimal decisions.
Deciding who i as lucky and who is a skilled investor is a very challenging task. However, this hasn’t prevented Pollen’s modelling team from coming up with a variety of solutions:
- An adaptation of Microsoft Research’s TrueSkill algorithm
- Statistical models for measuring reputation
- Traditional and new metrics to measure financial performance
The goal behind all these methods is to ensure that the users that can make the best decisions climb at the top of the hierarchy, providing optimal returns for the protocol.
Ever since OlympusDAO came about, DeFi2.0 has become a strong narrative in the blockchain space. While OlympusDAO is focused on protocol-owned liquidity, DeFi2.0 is trying to provide a general improvement over DeFi1.0 with improvements across multiple areas:
- User experience: Many protocols from DeFi1.0 are very complicated, and suffer from high gas-fees.
- Decentralisation: DeFi2.0 has re-popularised DAOs, as many DeFi protocols ended up being very centralised.
Some ideas we have seen in this space include protocol-owned liquidity, insurance against impermanent loss.
Pollen identifies as a DeFi2.0 project. First of all, Pollen has a strong focus on user experience. You don’t have to be an expert investor to participate. The protocol has been designed in a way that anyone can join it, and delegate decisions to more experienced users if they want to. Secondly, it is not centralised. It has been designed with decentralisation as a goal from the onset. Finally, the Pollen team is designing a set of methods which can help unlock additional yield, in a true DeFi2.0 fashion.
Pollen DeFi tokenomics
The Pollen (PLN) governance token lies at the heart of all activity in the Pollen Decentralized Finance ecosystem. Users manage their own portfolios, and get rewarded when the make good decisions, or lose Pollen when they make bad decisions. Users that want to abstain from making decisions can delegate their governance tokens to someone else, and still receive rewards.
So, what do the tokenomics and the token distribution of the project look like? I think these are best explained by the graph below. You can also find a more in-depth explanation on Medium.
Where can you learn more?
A very good start is Pollen’s medium. You can learn more about the team on this post. You can find the PLN token on traderjoe. And obviously, you should visit Pollen‘s website and watch the video below. As always, if you have any questions, or you just want to chat about topics like AI, data science, machine learning, blockchain, DeFi, just get in touch.