AMA Recap of Crypto Legacy x Bagels Finance, by FoxLee
The goal of Bagels Finace is to provide users with up to 10x leveraged yield farming to get the highest APY in the DeFi liquidity farming market by strategically interacting with multiple DeFi products and betting on farming assets.
Alfred, [11.05.21 09:05]
@FJISJOPS, are you there?
Fox Lee
Hello! Community partners.
Alfred
Welcome to the Crypto Legacy Community, we’ve seen a lot of cross-chain asset projects in the market recently. Regarding this, we invite Fox Lee, Product Architect of Bagels Finance, to see what disruptive solution Bagels Finance has made in cross-chain assets. Welcome Fox!
Thank you for your time today for the xxx Community AMA, we invited the product architect of Bagels Finance : Fox Lee Let’s start with Fox introducing himself!
Fox Lee
Hello everyone, I’m Fox, Project Lead & Product Architect at Bagels Finance, I’ve been working as a product architect since 2017 when Bitcoin entered the first year of the bull market, I founded a cryptocurrency hardware wallet company HooFoo in Silicon Valley, I was the co-founder & CTO, it was the first hardware wallet in the Chinese blockchain space. When crypto space entered the bear market in 18/19, I worked as CTO of Umining, a NASDAQ-listed mining company in Silicon Valley, I was responsible for product development and architecture. In the past 4 years, I have been ALL IN Blockchain. Before engaging in the blockchain domain, I was working in Google and Intel as a software developer, from 2014 to 2016, I had been studying blockchain technology from then and from 2017, I started to ALL IN blockchain, in my opinion, blockchain is the future, so I left Google and started my business in the blockchain field.
Alfred
Great for you, Fox. It should take a lot of courage to see a trend and leave such a good job at Google to join a new field. Can you tell us why Bagels Finance project attracted you to go All In?
Fox Lee
Yes, sure. First of all, I am very optimistic about the future of decentralized finance, I’ve been all in in Defi since June 2020. Uniswap’s AMM model started this Defi craze and it can generate real profits for projects. Some leading projects in DeFi, like Compound and AAVE, in the past year, their TVL reached over $100 million. This is completely different from the blockchain era in 2017/2018. Bagels Finance is the first cross-chain leveraged yield farming protocol (based on Heco/BSC/Ethereum Layer2). Lenders can earn higher lending interest rates. Yield farmers can earn higher farming APY. Bagels transaction mining allows both lenders and farmers to earn BAGEL token. Bagels will borrow assets to yield farms on both Heco/BSC/ETH, or provide liquidity on leverage(up to 10x) on behalf of the yield farmers. The project meets the demand of the market’s depositors and miners’ immediate needs.
Alfred
Leveraging up to 10x mining returns sounds a bit unbelievable, may I ask how Bagels is able to do that?
Fox Lee
In fact, Bagels can achieve 10 times mining revenue, because it is based on USDT or DAI which are stable coins. Single coin mining pools have relatively low risk, like staking DAI mining CRV pool, staking ETH mining sushi pool; LP mining is impossible to realize the 10x leverage mining, because the price of ETH fluctuates, there is no stable price, the LP pool suffers from impermanent losses. LP pools have impermanent losses are more risky, and these types of dual coin mining pools can only leverage up to 3x mining.
So, how does Bagels Leveraged Mining achieve it? First, farmers must stake the assets they want to borrow. Let me give you an example, suppose a user wants to leverage to mine Sushi, he first stakes 1 ETH in the bagels pool, and the bagels platform can allocate up to 2 ETH for the user to participate in the liquidity pool mining of Sushi, so the user has 3 ETH to mine Sushi. About 0.9ETH can be mined in a year, but in reality you are out of the principal only 1 ETH, in other words you save 1 ETH to mine 0.9 ETH with an annualized return of 90%. You leveraged borrowing ETH means you are shorting ETH and there is a risk of forced liquidation when the price of ETH is rising significantly. Because we will set a minimum net value risk control line for different digital assets, once the net value of the digital assets staked by the user is close to this risk control line, they will be forcibly liquidated by the Bagels platform to ensure that the net value of the digital assets lent to the user by Bagels at the beginning is unchanged and returned to the Bagels deposit pool in the original way through the bagels smart contract.This is to ensure that users who deposit BAGEL on the platform have no losses making their investments low-risk
Alfred
Wow, Bagels sounds like an Amazing Product, I believe many of you are curious, what is the original purpose of Bagels being created? Why do users need Bagels? Or what are the highlights of Bagels that can impress users?
Fox Lee
First of all, I think the track of liquidity mining in the DeFi ecosystem will exist for a long time, and the volume of assets providing TVL is growing continuously. In the whole DeFi market, there are two types of users in general, one is the depositors pursuing high interest rate, and the other is the miners pursuing high APY, on the Bagels platform, the needs of both types of people can be satisfied at the same time, and these two points in DeFi market are immediate needs.
Bagels users can get high interest rate for depositing coins and high mining income, in addition to the risk-free mining income for depositing coins and mining income for leveraged trading, and get the corresponding BAGEL governance token rewards according to the share of depositing and borrowing coins, please note that it is risk-free, as long as you deposit coins or leveraged trading, you can get the BAGEL token rewards.
In the token economic model design, 60% of Bagels tokens are used for lending transaction mining and LP liquidity mining, 7% of tokens are used for community incentives and airdrop, and Bagels entire platform earnings, including carry earnings and transaction fees, 40% are returned to all coin holders in the Bagels DAO governance community, as long as the user stakes BAGEL in the DAO smart contract The DAO governance community can get 40% of the platform revenue dividends every day; there is also 20% of the platform revenue used to buy back BAGEL and burn it every day.
Alfred
Wow, I think the Bagels product not only can find the market demand point, but also give back to the market from the token economic model, fully embodies the spirit of decentralization and autonomy, then from the introduction of Bagels, we know that Bagels is a cross-chain yield farming protocol, assets can be crossed from Ether to HECO or BSC chain, how is this done?
Fox Lee
First of all, Bagels leverage lending protocol and cross-chain aggregation protocol are two different products, the name of cross-chain aggregation protocol is “Dokadoa”, which is called “anywhere door”, meaning that different digital assets can be used through Dokodoa which will be launched after the launch of Bagels’ V2 version.
Dokodoa is a secure, decentralized cross-chain solution based on State oracle, which can support public chains including those using the ECDSA and EDDSA signature algorithms, such as Ether, HECO, BSC Smartchain, OkexChain, etc. Dokodoa contracts will be deployed on these corresponding chains. Users can top-up and cross-chain with just one click, without switching between different blockchain network settings. The cross-chain bridge node automatically identifies the user’s top-up transaction and triggers the cross-chain mapping contract to generate 1:1 mapped assets on its chain accordingly.
Alfred
Cross-chain aggregation protocol (Dokodoa) can cross to different public chain ecosystems, how to ensure its security?
Fox Lee
That’s a great question. The methods to implement cross-chain assets include sidechains, notary mechanisms, relays, and hash locking. The current representatives in cross-chain technology are Cosmos and Polkadot, but their cross-chain solutions are still relatively centralized.
Take Polkadot as an example, although Polkadot solves the demand of cross-chain, if you want to complete the cross-chain on Polkadot, you have to go through Polkadot’s relay chain to complete the redemption and sending of cross-chain assets through the relay chain, so there will be a problem if the relay chain is hijacked? This means that the assets passing through the relay chain will be lost.
Bagels proposes a solution to detect the data state of different public chains through the state oracle technology to complete the cross-chain mapping of data assets on different chains and to complete the cross-chain interaction of real smart contracts. Dokodoa is composed of two parts, one is the off-chain state oracle and the other is the on-chain cross-chain bridge smart contract. The first part of Dokodoa deploys a set of smart contracts on ETH/Heco/BSC chains, and the second part of Dokodoa detects the data on different public chains, including the transfer and transaction status of each public chain.
Suppose: When a user needs to cross assets from Ethereum to Heco, the state oracle will detect this data and the state oracle will tell Heco that there is an asset on Ethereum chain coming, then Dokodoa will deploy a smart contract on Heco chain to lock the asset on ETH chain and map the same amount of asset on Heco chain 1:1. To complete the whole cross-chain.
Here you will find that the state oracle is just broadcasting the asset cross-chain information for different public chains. When the information of asset cross-chain is received between public chains, the smart contract deployed by Dokodoa on each public chain will lock the assets and carry out 1:1 asset mapping to complete the whole asset cross-chain process. Even if the oracle is hijacked, it is useless, the assets are mapped 1:1. This is to ensure that users who deposit Bagel coins on the platform have no loses making their investments low-risk
Alfred
Cross-chain transfer of Huobi mdx already has several coins available, but the fee is very high. How do Bagels solve the problem of high fee ?
Fox Lee
This problem was taken into account when the solution of Dokodoa was proposed. Cross-chain aggregation protocol (Dokodoa) is not only able to support assets cross chain, but also enables cross-chain liquidity mining. Dokodoa is a fully open source protocol that is completely open to all vaults in Ether, BSC and Heco DeFi ecosystem for protocol nesting to achieve cross-chain vaults. Then assets on Heco and BSC can be mined through Dokodoa cross-chain aggregation protocol to mine liquidity pools of DeFi projects on Ethereum, like Sushi, Curve, and Badger, etc. Users of BSC or HECO only need to pay the Gas fee on BSC and HECO, and the Gas fee on Ethereum will be triggered by the triggers on Eth. Please note that the fee for cross-chain transfers by users using Dokodoa is 0, which is unprecedented in current cross-chain solutions.
Bagels and Dokodoa are a perfect combination, Bagels is a leveraged yield farming platform, Dokodoa solves the asset liquidity cross-chain problem, which provides better liquidity and more mining strategies for Bagels. It will continue to be deployed on OkexChain and Eth Layer2 mainnet when they go online.
Alfred
So how does bagels ensure that cross-chain aggregation gains are maximized and that cross-chain data sharing is synchronized.
Fox Lee
I talked above about detecting the data state of different public chains through state orcale to complete the cross-chain mapping of data assets on different chains to achieve decentralization and true smart contract interaction across chains, which is the Bagels cross-chain aggregation protocol (Dokodoa) proposed DeFi asset cross-chain solution. Then I will explain in detail how Dokodoa implements DeFi asset cross-chain.
First of all Dokodoa is composed of two parts, one is the off-chain state oracle, and the other is the on-chain cross-chain bridge smart contract.
I will start with the first part: state oracle. The function of oracle is to provide services to the decentralized network by connecting centralized data, off-chain data, such as: providing asset feeding price and interest rate for DeFi, verifying asset collateral rate, etc. But the oracle has more functions than that, the oracle is also able to detect different public chain data, the transaction status of each user, etc.
The function of Dokodoa’s state oracle is to detect the data on different public chains, including the transfer, transaction status and other information of each public chain. By acting as a broadcaster, the state oracle tells each public chain that there is a demand for asset cross-chain, and tells the demand to the respective public chain to complete asset cross-chain data sharing and synchronization.
The second part: Dokodoa smart contracts. Dokodoa will deploy a set of Dokodoa smart contracts on public chains such as ETH\Heco\BSC. Dokodoa’s smart contract consists of a oracle, a minting contract, and a machine gun pool protocol. The function of the oracle is as I mentioned in the first part, and the minting contract is to complete the mapping of asset tokens between public chains. There is also Vault integrated on Dokodoa smart contract as well, users can choose to cross-chain assets, but also can choose to use the vault protocol, cross-chain vault mining, lending and other functions.
Dokodoa solves the cross-chain asset liquidity problem, and the Dokodoa smart contract is embedded with a vault protocol, which is equivalent to a self-contained machine pool, which provides better liquidity and more mining strategies for digital assets on the Bagels platform. This provides better liquidity and more mining strategies for digital assets on the Bagels platform, thus ensuring maximum cross-chain aggregation revenue.
Alfred
Is 10x leveraged mining a tenfold increase in output. Will it cause a large number of tokens to be sold in the secondary market?
Fox Lee
Of course not, leveraged mining aims to increase the mining revenue for users, users stake assets to Bagels to mine other DeFi assets, you can see the chart below, for example: users stake USDT to Bagels Finance to mine BNB\MDX\HT, etc., users get to mine DeFi assets plus BAGEL governance tokens. This has nothing to do with the amount of BAGEL governance token output. So there would not be a large number of tokens in the market.
Alfred
Does Bagels have a coin holding mechanism to give purchasers the confidence to follow the development of the project and profit?
Fox Lee
After V2, Bagels will add DAO governance, BAGEL holders can stake BAGEL to participate in DAO , become a member of Bagels’ board members, and receive 40% of the platform’s revenue dividends. 20% of the platform’s revenue is used to buy back BAGEL and burn, allowing Bagel’s circulation to deflate and making BAGEL’s market value greater. The buyback and burn can make the value of BAGEL tokens appreciate; the revenue dividend can attract more users to hold and stake BAGEL into the DAO , reduce the circulation of the market, and at the same time, allow coin holder to become shareholders of Bagels platform, firmly believe in BAGEL and become ambassdor of Bagels in the world.
Alfred
Who are the Bagels investment institutions? How about the token lock-up release mechanism?
Fox Lee
At present, more than twenty investment institutions have invested in Bagels, including LD Capital, Jackdaw, Genblock Capital, AU21, X21, Consensus Lab and so on. The release mechanism is 10% unlock upon mainnet launch, 22.5% releases every quarter of the year.
Alfred
Fox, can you talk about the future plans and outlook of Bagels?
Fox Lee
First of all, I think the AMM model and liquidity mining in the DeFi will exist for a long time, and the volume of value locked is growing continuously. The DeFi market has a strong demand for DeFi assets across chains, and this is the general direction of DeFi, which gives Bagels a more forward-looking strategy in the overall DeFi ecosystem. In the future, Bagels will continue to derive and deploy on OKex Chain, Tron Chain, Ether Layer2 and Polkadot through the Dokodoa cross-chain bridge to expand the Bagels Finance ecosystem.
Also, we will have a series of airdrops before and after the launch of Bagels, please pay more attention to our telegram group, Twitter and volunteer weibo group, you will have a chance to get airdrop benefits by completing the tasks. When testnet comes out next week, please come to HECO and BSC to test out and experience Bagels, all have a chance to get BAGEL airdrops. Finally, we will conduct two rounds of IDO public offerings before we go live on exchanges, the quota is limited, first come first served, thank you for your support.
Alfred
Wow, so I’d like to ask Fox, what is the timeline and development roadmap for the launch of Bagels, can you reveal it to our audience?
Fox Lee
We have passed our smart contract audit. The testnet of bagels V1 version will be open to the public in mid May. The mainnet will be launched after about one week of testing. Version V2 of Bagels will be launched in June with two new smart contracts, one is a DAO governance smart contract that allows users to become DAO board members to receive dividends from the platform, and the other is a new version of the leveraged liquidity mining lending protocol that allows users to use the Dokodoa cross-chain aggregation protocol which will be officially launched in July, connecting digital assets on three chains: Ether, BSC and HECO, enabling cross-chain transfers, cross-chain liquidity mining and cross-chain vaults. Our Bagels team will also launch a series of innovative DeFi product portfolios to build Lego with Bagels later, please stay tuned to our Bagels development process.
Alfred
It sounds like Bagels’ product line is really attractive, and I believe our partners are looking forward to more innovative DeFi products from Bagels. Thanks to Fox for revealing so many benefits to our partners, Bagels team has rich experience in technology, finance and market operation, and can quickly capture the market demand in DeFi product design, I believe the bagels team will bring us more surprises in the coming days. Thanks for watching this episode of AMA, and thanks to our guest, Fox, for coming to visit us, we will meet again next time!
Fox Lee
Thank you all!
Alfred
We go to the segment of:
Twitter Questions
@Esteban07003835
I would like to know who is backing Bagels Finance at the moment? What investment funds, projects or companies have already trusted you? Are you working on this?
Fox Lee
Bagels seed-round investment was led by LD Capital and Merkle Labs. Participating institutions include: AU21 Capital, Genblock, X21 Capital, Libra Commercial, BV Capital, SuperChain Capital, Oneboat Capital, Jackdaw, Chain Up Capital, FlyBit, 7 O’Clock Capital, FilDa, CoinBene, NFVentures, Bfire Capital, Consensus Lab, Waterdrip Capital, CollinStar Capital, Crypto Capital, Cryptomeria, Geekbeans Capital, Safest Strategy Service, Scorpio Ventures, Hermes Club, Crypto Planet, etc.
Alfred
Excellent!
Fox Lee
Haha, we are, but we have some on-going discussions left with some even better investors
Alfred
haha
Next question!
@Robert89944298
It strikes me that bagels finance offers an APY of 90% and in addition users can use leverage of up to 10 times, increasing the APY by 900% ? Isn’t this too much ? How is your platform sustainable with such returns ?
Fox Lee
Bagels Finance selectes high quality liquidity farms on HECO/BSC/Eth with good APY. For example, if CAKE/ETH on pancake swap currently offers 30% APY, when user Alice deposits 1ETH on Bagels, she can borrow 2 extra ETH so that she can mine with 3ETH, thus achieving ~90% APY. (3x leverage)
Beware that when a user is borrowing an asset, they’re in fact “shorting” it. Bagels will only offer 10x leverage on stable coins considering the risk.
When a user participates in Bagels leverage yield farming, e.g. CAKE/ETH farm, user mines CAKE. In addition Bagels rewards these partipants with BAGEL, making even higher APY for users.
Bagels also shares 40% of the platform revenue (from lending interests spread, transaction fees, liquidation) with BAGEL holders. 20% of the revenue will also be used for BAGEL buy-back and burn.
Alfred
Next question
@Alaskabbb
Bagels Finance is based on HECO/BSC/ETH. Could you tell us why you have chosen these 3 networks and what do they bring to Bagels Finance? Regarding their associations, I have seen that there are many. What plans will you have with them and how will they help Bagels grow?
Fox Lee
Bagels Finance selectes high quality liquidity farms on HECO/BSC/Eth with good APY. It is a platform that aims to provide the best liquidity mining strategies for the users. These 3 ecosystems are rather established with good mining strategies, including MDEX on HECO, and Pancake on BSC. Depends on the development and mining strategies of Solana Defi, or OKEX chain, Bagels will also consider deploying on these chains/ecosystem as well.
Bagels Finance selectes high quality liquidity farms on HECO/BSC/Eth with good APY. For example, if CAKE/ETH on pancake swap currently offers 30% APY, when user Alice deposits 1ETH on Bagels, she can borrow 2 extra ETH so that she can mine with 3ETH, thus achieving ~90% APY. (3x leverage)
Beware that when a user is borrowing an asset, they’re in fact “shorting” it. Bagels will only offer 10x leverage on stable coins considering the risk.
When a user participates in Bagels leverage yield farming, e.g. CAKE/ETH farm, user mines CAKE. In addition Bagels rewards these partipants with BAGEL, making even higher APY for users.
Bagels also shares 40% of the platform revenue (from lending interests spread, transaction fees, liquidation) with BAGEL holders. 20% of the revenue will also be used for BAGEL buy-back and burn.
Alfred
Next question
@OHashek
Will Bagels really only focus on providing yield generators with the highest APYs to benefit users? Or do you also plan to develop many other products that are also cross-chain compatible?
Fox Lee
Good question! Not only Bagels aims to provide the best liquidity mining strategies for the users, but also the highest possible APYs. As mentioned, Bagels will also consider other defi ecosystem such as Solana, OKEX chain etc.
Also, Dokodoa is an open protocol that’s not just for Bagels ;) , even it makes a perfect combination with Bagels!
Spoiler alert: our next product prepared shall offer Bagels users the highest possible APY to mine POS primitive assets such as FIL, DOT etc. ;)
Alfred
Spoiler
Last question!
@menl1997
One thing I read that will be possible on Bagels Finance, that I think would be really attractive to users is the fact that they will be able to pay little gas fee to mine the DeFi tokens on ETH. Can you tell us more about this? How will this be possible? How will it work?
Fox Lee
“Dokodoa” is an abbreviation of “Dokodemodoa”, meaning “Anywhere door” in Japanese. A door (cross-chain bridge) that reaches anywhere (different chains) in an instance. Currently, most cross-chain solutions are either too centralized, or too user unfriendly. The former solution usually uses centralized exchanges to achieve assets cross chain. The latter mostly uses relay chains where users need to authorize, wait for block produce time, etc.
Dokodoa is a secure, decentralized cross-chain solution based on State oracle, which can support public chains including those using the ECDSA and EDDSA signature algorithms, such as Ether, HECO, BSC Smartchain, OkexChain, etc. Dokodoa contracts will be deployed on these corresponding chains. Users can top-up and cross-chain with just one click, without switching between different blockchain network settings. The cross-chain bridge node automatically identifies the user’s top-up transaction and triggers the cross-chain mapping contract to generate 1:1 mapped assets on its chain accordingly.
Dokodoa’s will collect 5–8% tax on cross-chain yield farming, such revenue wil be shared with BAGEL stakers.
Alfred
We just finished the segment of:
Twitter Questions
Now we move on to the segment of:
Live Questions
Fox are you ready for this segment?
Fox Lee
Let’s have it!
How to buy $BAGELS?
Fox Lee
Bagels mainnet will be launching this month! (~end of the month) For DEX, we will launch on MDEX on heco, and Pancake swap/Dodo on BSC. Beforehands, we’ve prepared few rounds of IDOs for us (around 17th-25th of this month). So stay tuned! ❤
Do you have any Coin Burn / BuyBack systems or any Token Burn plans to increase the value of Token & attract Investors to invest?
Fox Lee
Yes, we’ve prepared tons of goodies for our supporters! 20% of the platform revenue is used to buy back and burn BAGEL, 40% of the revenue will be shared with BAGEL holders! other than those, airdrops, all kinds of events, you think of it . We love our early supporters!
Does Bagels have a web page and if so what is it?
Fox Lee
Regarding our timeline: we will have our public testnet coming out very soon! Currently we’re internally testing it. We’ll let everyone know soon as we can Please stay tuned to our twitter @bagelsfinance, and also within this lovely community!
What are the ways for your project to generate revenue in the long run? What is the progress of business development and what are some of your commercial partnerships?
Fox Lee
The platform generates revenue through: lending interest spread, transaction fees, and liquidation. As a matter of fact, a very very strong revenue stream if you paid attention to some similar projects. BD wise, we’ve gotten great supports from our strong investors list! We’re also in partner with some project such as : BlackOcean, Orbits Finance, DAOVentures, Filda, Mdex, etc
Many projects focus on benefits more than the entire community and its investors, rather than its own team, but really why isn’t Bagels like that? Rather, they will allocate 40% to team members to support the development and operation of the product, is not 40% too much?
Fox Lee
Haha, Bagels is just like that, 40% of the platform revenue is not only allocated to the team, but also some of our operational supporters from very early on. DAO governance will be up on our V2 version! This is our vision for longer term, to make Bagels governed, and run by the community. DAO will have the right to change this percentage later on! Also token wise, only 10% is allocated for the team, and half will be locked for a year, the other half is linearly unlocked throughout the whole year!
We believe a project is nothing without its supporters. Community is our heart Thank you so much for Crypto Legacy community for your support!
Alfred
Fox Lee, thank you very much for sharing your successful project with our community, we will be waiting for the new
Fox Lee
Definately! Thank you Alfred, and thank you all very much again!