Over the past year, Wing has been developing and innovating according to its 2021 roadmap. In addition to launching on the Ontology chain in 2020, Wing has successively launched its Flash Pool on Ethereum, OEC (formerly OKExChain), and Binance Smart Chain in 2021.
In the process of continuously developing new pools, Wing has also added support for many new assets. The Wing Flash Pools support a total of 61 assets, of which there are 13 assets in the Ontology pool, 18 assets (including PAXG, a synthetic asset) in the Ethereum pool, 12 assets in the OEC pool, and 18 assets in the BSC pool.
In April, Wing launched Any Pool to deliver the vision of “decentralized lending for everything”, and cooperated with UPRETS to introduce real assets into Any Pool for the first time, generating nearly $1 million in loaned value.
With the expansion to new chains, new assets, and new pools; Wing’s TVL has trended upwards, despite market volatility throughout 2021. TVL demonstrated strong growth during the first five months of the year, growing from ~$72 million to ~$329 million, before falling slightly and remaining reasonably stable at ~$200 million for the remainder of the year. The year ended with the TVL having increased by over 125% from the start of the year.
In addition to its own development, Wing also actively sought cooperation with external partners, such as cooperating with ICHI to release the WING-backed stable coin oneWING, later upgraded to oneWING V2, with a cumulative minting volume of nearly 10 million. Wing also participated in ICHI’s oneWING-pWING Angel Vault.
Wing also cooperated with SushiSwap on Ethereum, KSwap, and JSwap on OEC, and ApeSwap and BabySwap on BSC to hold liquidity mining events, locking up a large amount of WING, and providing large amounts of liquidity for the Wing Ecosystem. In addition, Wing also held a series of events based around the themes of voting, Wing’s birthday, and the opening of new pools, and many AMA and social media events. These events attracted the participation of a large number of new users, and the number of Twitter followers and the Wing DAO community has reached a record high.
Wing released the Wing Assets Risk Model in June, and iteratively updated it to further establish professional and tested standards for a more trustworthy decentralized DeFi lending platform. In the spirit of decentralization, openness and transparency, Wing developed and launched a “Data” page, which clearly shows the important data of the platform to users in a visual way. Many adjustments have been made to the front end of the lending and governance pages to improve the user experience.
All of these advances were made in an environment which, at times, could be challenging. Growth of the Inclusive Pool was hindered due to government restrictions, and barriers resulting from KYC. The pool has not received any further upgrade or development. In August, Wing had to temporarily close some Flash Pool functions during the PolyNetwork hack in order to protect user assets. At the end of September, due to Chinese policies, Wing had to restrict some of the features available to users in mainland China, and completely restrict access in mainland China by the end of 2021.
Innovation and optimization are key to the way we think about the development of the Wing platform. During 2022 we propose focusing on the following areas to ensure the continued optimization of functions for the Wing Flash Pools.
2021 continued to see leading DeFi platforms targeted by flash loans attacks. Many of these attacks resulted in heavy losses due to a failure to control the asset risk. Wing has always placed the safety of user assets as the first priority. Providing users with strong risk control allows them to participate with confidence, and is more attractive to high value and institutional investors.
During 2022, we suggest that further risk control optimization is undertaken. These optimizations include the establishment of the Inclusive Pool scoring system, the adjustment of the asset parameters to balance the security of the lending pool and the needs of the business, and the expansion of new lending functions pool, all of which need the support of a comprehensive risk control system.
We hope to launch a new front end interface in Q3 of 2022, developing branding that deeply connects with, and is recognizable by, its users. Wing aims to further develop the branded design, and fully establish a unique theme and style for the interface. Whilst there has been a degree of optimization to the front end, there is still work to be done to refine the display of data, and develop the overall style for Wing. Furthermore, improved functionality can be developed to improve the overall user experience.
Under-collateralized and unsecured lending offers a unique opportunity in the DeFi space. Wing is well placed to be the leader in creating a decentralized, undercollateralized, and even unsecured lending. This is an opportunity to provide users with truly inclusive finance, in line with Ontology’s broader vision. Currently, in the DeFi market, the dominant method of loan provision is to rely on over-collateralization, with very few undercollateralized/unsecured lending markets. As such, this is a great opportunity to attract the $10 trillion market from traditional finance markets. Under-collateralized/unsecured lending can greatly improve capital efficiency and allow users to obtain more liquidity.
Such a broad market is a very good opportunity for Wing. However, DeFi under-collateralized/unsecured lending is very dependent on strong risk control capabilities. We need to score users based on various on-chain data to properly assess risk. At the same time, the loan data in the Inclusive Pool can also feed back to algorithms and models and gradually improve the various scoring systems. Unsecured loans in the DeFi world now require KYC certification, but the decentralized world resists such centralized behavior. If we can build a KYC-free risk control system, Wing will carve out a niche in the market and become a much-needed player in Web3.
We plan to launch Inclusive Pool V2.0 in Q2, and to continue to iterate the scoring models and products after that, making Wing the go-to platform for DeFi under-collateralized and unsecured lending.
The following optimizations are recommended for the Flash Pool contract functions.
(1) Collateral Liquidation
Enabling users to directly use the collateral in the pool to liquidate others. There would be no need to withdraw to a wallet and then liquidate, reducing the user’s number of steps to liquidate.
(2) Collateral Repayment
Enabling users to repay collateral directly after being exchanged through a DEX, eliminating the need for users to exchange and repay with a DEX.
(3) Collateral Swap
Enabling users to directly exchange the collateral in the pool for the assets they need to directly collateralize, without the need to withdraw and then go to a DEX to exchange, the same as above.
In 2021, the Metaverse ushered in accelerated development, and drove the investment boom in the NFT and GameFi markets. NFT and GameFi are also predicted to be popular markets in 2022. Many users’ NFTs are stored in their wallets. Although they are of high value, many simply sit idle unless they are sold. In order to solve the pain point of utilizing an NFT stored value, without having to sell it in a poor liquidity market, NFT mortgage lending came into being. Wing’s Any Pool can also meet such needs.
It is not beneficial to work behind closed doors. Wing Finance should continue to expand into new areas and attract more users to participate in Wing. We can develop in the following 5 directions.
In order to attract more TVL, Wing should provide suitable solutions in a targeted manner, such as supporting more popular stablecoins (such as UST, etc.), improving the liquidity of already supported stablecoins, adjusting the WING lock ratio of stablecoins, and the WING incentive distribution ratio, optimizing the collateral factor and kink point model of stablecoins, etc.
(2) Long tail assets
The introduction of more long-tail assets such as trading pair liquidity provider (LP) tokens, derivative assets, cross-chain assets, and governance tokens can attract more users, and create a new way to form differentiated competition with other DeFi projects. However, with high returns and high risks, long-tail assets are vulnerable to attacks due to lack of liquidity and large price fluctuations, so Wing and its users will need to be very cautious.
We will focus on top cross-chain Layer 1 assets as the direction of future asset growth, such as DOGE, SHIB, DOT, BCH, etc. These assets have sufficient liquidity and have a large number of holders. The introduction of these assets is a way to attract new users from very different corners of the blockchain space.
The emerging public chains have risen strongly in 2021. Wing should also keep up with the pace of the market, expand to popular chains, and actively apply for support from new chains’ ecosystems, such as the Ontology EVM, Avalanche, Arbitrum, etc., to attract new users.
Campaigns are an effective way for the community to revitalize and attract new members, and they are vital to Wing’s continuous growth. According to previous campaign experiences, it is better to focus on campaigns that are in cooperation with other communities and drive users from those communities to Wing and vice versa.
Exchanges are an important source of traffic. Data such as exchange prices are important references for users when investing, and are also important for strengthening oracle data feeds. Wing now supports 13 centralized exchanges such as Binance, OKEx, Gate.io, and MEXC, as well as 6 decentralized exchanges such as BabySwap, ApeSwap, and SushiSwap. Wing will aim to be listed on more exchanges in 2022.
The distribution optimization and usage expansion of WING are an important part of Wing’s development and growth. The following three examples of WING’s development directions are given for the WING allocation optimization and usage expansion.
WING’s incentive distribution model is automatically adjusted according to the real-time competition of the lent amount of each asset. The interest rate is also optimized in real-time, but at the same time, the handling fee is relatively high compared with other projects of the same type, which makes ordinary users less likely to participate. If WING wants to achieve inclusiveness, the optimization of contract fees is also an important factor that we need to consider. We will adjust the competitive distribution model of WING incentives to calculate the distribution of WING rewards for each asset on a daily or weekly basis to reduce the handling fee for user operations. The adjustment plan will be launched in Q2.
The insurance pool is a major innovation of the Wing project and an important part of the WING token economics. We hope that the insurance pool can lock more WING, so that the insurance pool’s guarantee function is more sufficient. At present, the lock-up period for WING is 72 hours, and users cannot withdraw during the lock-up period, but can withdraw freely after 3 days. The 3-day lock-up period is too short to have an effective locking effect, and it does not incentivize those who lock up WING tokens for a longer period of time. We will adjust to the more mainstream token locking models in the market. There are two options for reference:
(1) A model with a longer lock-up period to obtain higher returns. Set a lock-up period of 3 months, 6 months, 1 year, 2 years, and 4 years, with the benefits of different lock-up periods scaling accordingly.
(2) The minimum lock-up period can be extended to 30 days, and users can withdraw during the lock-up period. A 0–10% handling fee can be charged for withdrawal during the lock-up period, and the proportion charged can be linearly reduced according to the lock-up period. This model can both generate revenue and give users free liquidity.
We plan to launch one of these solutions in Q3. The above solutions need to consider the feedback from the community and the feasibility of the technology, and may be adjusted according to the actual situation at that time.
At present, users need to lock 3% of WING when they borrow in order to obtain the yield from borrowing. This function locks up a lot of WING but also raises the threshold for user participation. Users may not hold WING, and may not want to buy WING at the time of lending. It is recommended to change to a mode that allows users to lock WING some time after borrowing. The more WING locked (for example, the upper limit of 5% can be set), the higher the income multiple.
The development of the Wing DAO is also one of the important components of the ecosystem. The best practices of DAOs are evolving as governance tools are gradually getting better. As a DAO, Wing needs to attract more users to participate, so as to deepen the consensus strength of Wing, activate the community, and allow everyone to work together to push forward on the development of Wing. The following are examples of 2 directions that can be exerted in 2022.
The first is to improve the DAO model. For example, this can be carried out by issuing Wing NFTs as incentives. In the future, it is also necessary to develop a voting dApp to facilitate users to participate in Wing DAO voting.
Secondly, is to improve Wing DAO community engagement. Community operation is an effective way for the community to activate, attract new people and retain them, and it is the engine of Wing’s continuous development and growth. Wing should be more active in social media and activities, join activities with more communities, and continuously attract new groups of users.
If the development goes smoothly, TVL will gradually increase, the project will gradually develop, new technologies and products will continue to be iteratively upgraded, and Wing’s brand influence will gradually increase, forming an upward spiral. Wing will get better and better in 2022.
2022 promises to be an exciting year for Wing Finance, as we grow and mature in harmony with the DeFi space. There will continue to be many exciting opportunities, which we look forward to exploring with our ever-growing community. We are proud of the DAO we have built together, and look forward to welcoming many new faces to our friendly, innovative, and supportive community.