Welcome to the second “Builder’s Update,” a newsletter covering the BUILD Finance ecosystem. Please refer here for the first issue.
The month of November was pivotal for BUILD Finance DAO as the community made a number of critical adjustments to the product suite and the roadmap. Despite some change in focus, development hasn’t stopped.
Focus and priorities
Venture building is about systematic production of new products and helping those products grow and succeed. However, just like an investment, venture building is also about setting priorities: reviewing existing positions, cutting losers and riding winners. Counterintuitively, the cutting part is hard and it’s where most traders and builders lose time and money.
Try fast. Fail fast.
BUILD employs an agile approach where radical innovation is pursued as developers experiment and adapt “on the go”. One iteration after another, one experiment after another, until we reach a point where product-market fit is undeniable.
This approach allows us to validate and calibrate to market opportunities in real-time and adjust priorities. For example, the HYPE Liquidity Locking Protocol has shown low engagement with diminishing revenue potential, hence has been hibernated with community consensus. In its place, two new product initiatives have been incepted — UpDown, a binary options protocol, and Vortex, a money market platform (more on this below).
Over the course of November, BUILD has yielded a number of minor, but important community achievements:
- New domain. Following the community vote (refer to proposal #14), we have purchased a new domain — build.finance (previously used: letsbuild.finance)
- BUILD Treasury. While there was no direct revenue coming into BUILD in November, BUILD still got wealthier via:
- aDAI yield has generated around $980, which effectively offset the web-site expenses;
- Using the proceeds from the HYPE protocol’s baked-in tax revenue sharing scheme, the DAO bought back 1,020 $BUILD (~$13,100 as of writing) and 5,000 HYPE;
- Following the genesis of the UpDown’s token, BUILD received its 20% cut in the form of 200k $UPDOWN tokens (refer to the Treasury address here).
- Fees reimbursement & rewards. 300 bCRED in total were awarded in November to 2 users for their content contribution (see bCRED spend tracking here). Additionally, the community voted and executed the vote on reimbursing development gas fees to 0xdev0 in the total amount of 6,649 bCRED (refer to the proposal #13F).
- Enabling voting with staked BUILD/ETH UNI LP tokens has progressed. The staked LP token snapshot strategy has been merged upstream (work is led by member vfat). Work is underway to transfer BUILD governance to ENS and utilize the new strategy.
- BUILD community has expanded into the Chinese segment, capturing a number of new users via discord, which now sits at 1,500+ users. Chinese-speaking members have been active in establishing its presence and support for the BUILD ecosystem by running a WeChat group (link) and releasing a dedicated article (by member Mila Azul) — very colorful, memeful and with witty references such as “0xdev0 is the Andre Cronje of China”.
Products Updates and Roadmap
BUILD continued progressing with the existing product Metric and bGold, as well as has started work on two new products — Updown and Vortex.
Metric Exchange is a DEX aggregator that allows for limit orders trading for any ERC-20 token. Development continues with the product owner SHA_2048 and inputs from vfat.
- A major milestone was achieved with the launch of Limit Orders that allows to trade any 2 tokens via wallet-to-wallet using the 0x relayer network. Please refer to the announcement article “Introducing Metric limit orders for any token pair”.
- Multi-Language UI support has been added for Chinese (simplified & traditional), Russian, and French.
- The current roadmap includes the following features:
- Add support for wallet-connect;
- Improve performances and UX;
- Display all user opened orders (currently only orders for selected pairs are shown);
- Still in discussion: add a possibility to open OTC orders (with specific taker address), this may recycle some of the IP from the OTC.Market.
bGold is a synthetic token pegged to gold. This product is being worked on by the bGold team, plus inputs from SHA_2048 and whitemoose.
As of writing, the UI prototype, as well as contracts, are completed, with the front-end being integrated:
Updown Finance is a directional binary options protocol for volatility trading (in the early stages of development). This is a new product that was conceived in late November.
The idea is to amplify the speculative nature of every token community: imagine putting a link in CORE and saying “I think twap will go down in the next 8 hour and I’m betting my 10 ETH on it”. Surely, someone will think the opposite and bet on the other side. The “pot” of each UP/DOWN side will keep growing larger on every bet. When the market resolves, the losing pool will pay the winning pool. It will likely introduce a whole new way for whales to make money with market manipulation.
The binary nature of it makes it very risky, but also very lucrative. It would be extremely risky to trade low-liquidity Uniswap pairs such as $METRIC. It’s very simple to manipulate it. But due to no limits on the amount of capital that can enter the bets and no slippage on them, it’s completely possible to have a $1M of bets on a Uniswap pair that only has $20k of liquidity in it. Since it’s easy to manipulate such pairs, it could also increase the trading activity of these low-liquidity pairs. Easy to imagine people with binary positions trying to buy or sell the token pair just to influence its price. However, since it’s easy not to just push the price down, but also easy to push the price up, you could have “wars” from both sides trying to influence the price to their side. On larger pairs, we probably won’t see it as much. But either way, it would be very interesting to see the effects of this.
Fee structure (TBC): Updown will collect a fee on the resolution event (up or down winning the other side). This fee will be distributed to $UPDOWN stakers. BUILD DAO, as an owner of 20% of $UPDOWN, will also be earning fees by staking.
The launch will be guarded, starting with just one pair and limiting it to $100k worth of bets per side, so to evaluate how it works and contain the damage of possible hacks. No date is known yet.
Token. $UPDOWN, a valueless token has been deployed on 26 November (BUILD treasury received its 20% share). The logic is to stay away from product-less token pumping, hence the launch was not announced outside of discord (see here).
Development status: contracts are done and undergoing testing. A static frontend is done and awaiting JS integration after the contracts are tested.
Vortex (the name may change) is a lending & borrowing platform, which will target the long tail of assets that are currently not served by the existing DeFi money markets. This is also a new product that was conceived in late November, although a number of discussions about it have been going pretty much since the inception of BUILD.
Development status: design is done, static frontend is being developed. A sketch of the UI:
Sunset News: Hype Protocol & OTC.Market
A turning point has come to two products that were decided to be hibernated:
- Hype Protocol, a liquidity locking protocol that provides long-lasting liquidity provider incentives, and
- OTC.Market, a decentralized peer-to-peer OTC platform
Hype has had a rollercoaster month. At the start of the month, we did extensive work trying to reimagine the economic incentive model by drawing conclusions of the first few weeks. We published a detailed deepdive into tall underlying intricacies of the protocol and suggested a design for v2 (refer to the article “HYPE — Liquidity locking protocol” by user peitalin).
Subsequently, the community voted (see proposal #12) to introduce 5 new token pairs, for the first time hosting external projects, not directly associated with the BUILD ecosystem. The newly added tokens include: $MUSE, $ZLOT, $PCT, $YAX, and $NSURE. More details in the announcement article “HYPE PROTOCOL Adds Five New Pairs” by Son of Ishtar.
Despite the above efforts, the new launch hasn’t resulted in an elevation of engagement rates. Following the community discussion and suggestion of lead product dev 0xdev0, Hype thereafter has been open-sourced (GH repo) with keys put into a multi-sig (users 0xdev0, Benjamin Mooney, Son of Ishtar, and vfat). Policy: at least 2 signatures required to submit a transaction.
Currently, the community lacks a lead dev that would continue development on HYPE and OTC.Market products. Although one may be hired with treasury’s funds should any member decide to make (and pass) a proposal. Until such an initiative originates from the community, both projects are hibernated.
OTC.Market has a UI design, basic front-end prototype, gitbook documentation and all core product logic in place. We will be keeping an eye on this and might revive should appropriate resources become available.
$BUILD is currently held by over 435 unique wallets, as seen in the graph below (source: Nansen). A decrease of 13% from last month. Nonetheless, on-chain data (e.g. 7-day and 30-day wallet balance changes) suggests that most selling is coming from smaller holders, while a number of large holders have continued to accumulate. Both groups are heavy on the long-term holder representation.
Continuing the precedent set in the inaugural edition, we would like to end here with two final thoughts.
Firstly, BUILD is always evolving, it is amorphous with no growth-inhibiting rigid structure. This means that at times of pivots, it may appear that BUILD doesn’t look like anything. The reality is that BUILD may step back, reset its priorities, and take a new shape, depending on where the opportunity is taking us. We have all the ingredients for success, so we will continue shuffling them around until we solidify our market niche: BUILD has an array of dev and ops talent, a sustainable and visionary business model, available funding, lots of ideas, and an amazing community.
Secondly, continuous strive for product refinement and launch of new ventures is exactly how building occurs — as noted in the Jeff Booth’s book “The Price of Tomorrow”:
“Some of the biggest revolutions in science actually come from small refinements of existing theories. As Sir Isaac Newton said, “If I have seen further than other men, it is because I have stood on the shoulders of giants.” The biggest “giant” for Newton was Galileo: Newton’s work that resulted in the three laws of motion was influenced by Galileo’s work on forces”.
If you’re interested in building DeFi, working on products of your passion, or pitching a new idea, please reach out to us in Discord. We are looking forward to hearing from you.