In this round of market cycle, the DeFi market has been on the margins for a long time. The old blue-chip DeFi tokens can still maintain a high market value but the price of the currency has increased. However, many new-generation DeFi projects lack innovation and find it difficult to promote the development of the narrative. It is difficult to have outstanding performance after entering the market, and it is difficult to find Alpha investment opportunities in the DeFi market.
As Pencils Protocol is launched into the market, it is becoming a key factor in revitalizing the DeFi market by launching a series of innovative products and deeply linking with a series of potential sectors such as LRT and RWA.
It is reported that only two months after the launch of the protocol, the single-chain TVL on Scroll soared to US$350 million, becoming the project with the highest TVL on Scroll, and attracted more than 500,000 users to participate in the protocol.
As the latest trendsetter in the DeFi space, Pencils Protocol represents a new trend, and based on this, DAPP tokens are expected to become an Alpha asset worth paying attention to in this round of market cycles. As DAPP tokens are listed on platforms such as Gate and Bybit and open for trading, they will also become a new opportunity at the fingertips of investors.
Pencils Protocol Project Fundamentals
Pencils Protocol is a comprehensive DeFi platform in the Scroll ecosystem, which includes a series of sections such as Farming, Vaults, Auction and Shop. These sections can be deeply linked with different tracks and expand the narrative direction of Pencils Protocol.
Farming is a pre-market incentive income market with leverage characteristics. This sector mainly pledges assets in the form of staking and can provide users with multiple incentives of different points. This sector is the downstream of the LRT track and is deeply bound to various LRT projects. Through the staking incentive support for various LRT assets, it can quickly absorb potential holders of these projects and assets and further convert them into users of Pencils Protocol.
The Vaults section is a native income market with a liquidity mining model as its core, but it also further adds leverage factors to the original LP model, that is, users can multiply LP income through lending + leverage. At the same time, the Vaults product is also connected to Mind Network, a platform based on blockchain and artificial intelligence technology that focuses on data privacy protection and the development of decentralized applications (DApps).
When users participate in Vaults products, their assets will be further pledged to Mind Network, and the security of projects such as AI and FHE will be improved by increasing the scale of PoS pledges. At the same time, they can participate in some votes to contribute to the development of the ecosystem, and the pledgers and Pencils Protocol will be able to receive contribution rewards. Therefore, this not only means that users can obtain multiple benefits by participating in Vaults products once, but Pencils Protocol can also obtain multiple platform benefits. In other words, the more users of Pencils Protocol's Vaults, the higher the platform income will be.
In addition to the above sections, the Auction section includes auctions of some rare assets, and also includes the Launchpad section, which is not only an important launchpad for high-quality projects in the Scroll ecosystem, but is also expected to become an important launchpad for the LRT market and DeFi track. The Shop is an important channel for Pencils Protocol to establish links with markets such as RWA. The platform will launch a series of virtual or physical products, including some RWA assets, which can not only expand business channels for the platform and capture Web2 users, but also is one of the important sources of income for the ecosystem.
Pencils Protocol also received two rounds of financing due to its broad narrative not long ago, including a number of top capitals such as OKX Ventures, Animoca Brands, Galxe, Gate.io Labs, Aquarius, Presto and Agarwood Capital, as well as Scroll co-founder Sandy Peng, V Fund partner Ashely Xiong, Inception Capital co-founder David Gan, Cyberconnect founder Ryan Li, Arcanum Capital co-founder Lucia Zhang and other individuals. The total amount of financing was US$2.5 million, with a valuation of US$25 million.
Meanwhile, in September, Pencils Protocol received a new round of strategic financing from well-known investment institutions such as DePIN X, Taisu Ventures, Black GM Capital and Bing Ventures at a valuation of US$80 million. Currently, the valuation of Pencils Protocol has exceeded US$200 million.
The Imagination of DAPP Token
The stock market value reflects the company's long-term development imagination. The higher the company's long-term development imagination, the higher the stock market value reflected. This is also true from the perspective of the crypto market.
Pencils Protocol represents a new trend. It is no longer limited to a single DeFi functional paradigm, but has built a comprehensive platform that not only integrates multi-track functions, but also plays an important role. That is, from a functional point of view, it is a liquidity hub center, an important resource pool for retaining users and promoting growth in the LRT market, and an important launch pad for high-quality projects to face the market. At the same time, it has also become the key for users to capture profits in one stop, that is, a value depression.
Then the long-term valuation of Pencils Protocol will be equal to the sum of the valuations of the top projects in these tracks. Especially in the context of the global flood of money brought about by the Fed’s interest rate cut, a violent bull market may be coming, and Pencils Protocol is on the eve of an outbreak.
Therefore, from a valuation perspective, the imagination and imagination space of DAPP tokens are much greater than all the DeFi concept coins currently on the market.
From the initial valuation, the market value of DAPP tokens in circulation in the List stage after IDO is only 84 million US dollars. The tradable DAPP tokens will continue to decrease with continuous staking and destruction, and the value allocated to a single coin will not continue to rise. On the other hand, compared with most DeFi coins with a market value of several billion US dollars, the DAPP token itself still has more than a hundred times of growth space. The DAPP token itself has the important potential to become an Alpha asset in this round of market cycle.
It is worth mentioning that the DAPP token will be launched on the Gate and Bybit platforms on September 27, which means that those who buy and get the chips first will make profits early. After all, except for IDO, the cost of holding DAPP tokens is the lowest when it is first listed.