What is Compound fork Hundred Finance and can it regain momentum?

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On March 15, the loan protocol Hundred Finance was hacked on the Gnosis chain, losing 2,363 ETH. Immediately, Hundred Finance paused all markets in the chain. Prior to the hack, Hundred Finance was relatively small Challenge protocol on Gnosis, with upper $313 million TVL. Like a fork Compound, its characteristics were nothing special. However, its multi-channel deployment gives it room for growth. After the hack, all of that was shaken. TVL dropped to 30% in one month. But Hundred Finance keeps kicking in. What exactly is this project and can it regain its TVL past?

What is Cent Finance?

Hundred Finance is a multi-chain deployed lending protocol, launched on the Ethereum Kovan testnet in June 2021. The platform has deployments on eight chains, namely Ethereum, Arbitrum, Fantom, Harmony, Moonriver, Gnosis, Polygon, and Optimism. As a fork of Compound with similar functionality and interface, Hundred also supports popular major protocols as well as stablecoin and blockchain tokens.

Hundred Finance

Key Features of Hundred

Hundred is basically the same as Compound, with a few innovations layered in.

Users who deposit tokens on Hundred provide liquidity and in return earn variable interest. Interest rates vary according to market supply and demand. As the HND platform token is used as a governance token, the interest rate will be determined by a community vote.

Users who deposit assets will receive interest-bearing tokens – hTOKENS – and can also increase their earnings by staking hTOKENS. Hundred is more encouraging for users to deposit stablecoins on chains other than Ethereum, so only those pools with the stake symbol are available for wagering.

Hundred Finance – Supply Market

With the assets deposited as collateral, the user can borrow assets. Users should also be aware of the possible liquidation risk when the collateral value falls to the collateral factor (CF). The liquidator will receive the collateral at a reduced price, which means that the borrower’s assets will be lost.

After depositing the asset, users can choose to provide it to the borrower for interest income, in addition to the option to make the asset liquid for automatic liquidation. Currently only pools with the B.Protocol Backstop logo on the Arbitrum and Fantom chains are supported, both of which are stable pools.

Users who choose Backstop will not only receive rewards from the HND platform token, but more importantly, in the event of a liquidation, they will be rewarded with a discounted liquidation of liquidated assets. Approximately 8% of the liquidation amount will be allocated to the support provider.

When large market swings are predicted, depositing into Backstop can generate significant returns.

Lendly only supports two projects in Fantom—Hundred and veDAO. This feature only supports stablecoins and platform tokens. Stablecoins are deposited with earnings but cannot be loaned as collateral, platform tokens are deposited without earnings but can be loaned as collateral.

Lendly is primarily set up so that project backers can be paid to provide stablecoins, so the project team can use their own native token as collateral to borrow those stablecoins. This prevents the project team from selling their token in exchange for funding when they need it, which would put pressure on the token to sell.

Users can also use Lending Protocol features: Deposit Assets, Lend Assets, Trade, Redeposit. This continuously increases the deposited assets to get more returns. By selecting different assets to deposit and lend, users can go long or short on assets. Up to 5x leverage is possible when the Loan-to-Value is 80%. However, the user can afford a smaller drop and the risk of liquidation will be higher.

Tokenomics

Hundred issued tokens two months after launch, then opened a governance token based on a vote-escrow model developed by Curve. There are three tokens involved.

HND is the native token of Hundred, with a total of 100 million in circulation. Of this amount, 40% will be allocated to project treasury for cash mining incentives, partner mining and other community activities. The remaining 60% is divided into 3 equal 20% for development and operations, migration of Compound DAO tokens and Percent (PCT).

Same as Curve veCRV, different amounts of veHND can be obtained by staking HND at different lockout times. Users can choose their own pools in the gauge vote after obtaining veHND to increase the APY obtained, up to 2.5 times the boost.

veHND can also be used for voting and will have a vote to determine the amount of HND released into each pool each week.

mveHND is a mirror version of veHND. Mirroring allows the user to see the sum of all locked veHNDs on chains, allowing the governance system to quickly stay up and running across all chains.

Channels that can aggregate veHND include Moonriver, Gnosis, and Optimism. When a user votes in any of these three channels, if veHND is not in the channel they are currently operating in, the user will see a “Mirror Locks” button which allows them to apply the total balance .

This compatible mechanism also allows the user’s APY to increase and can further improve the value of the HND.

Data performance

According to Footprint analysis, the current price of HND is not good, having fallen from a high of over $5 in January to $0.25. The trading volume is also gradually decreasing and trading activity in the market is decreasing.

Footprint Analysis – HND Token Price and Trading Volume

Of the eight chains supported by Hundred, those with a total supply of 10 million are Fantom, Gnosis, Arbitrum and Polygon in order. Three channels, Fantom, Arbitrum and Polygon, have been included in DeFi 360 Footprint Analysis.

The TVL of the entire DeFi sector took a downward turn at the start of the year compared to the previous year, and the TVL of Compound is also trending lower. Hundred was also hit by macro factors, and total supply fell even faster after the attack, which is now around $52 million across all three channels.

Footprint Analysis – Total Supply

The borrowing amount is also not high, with most pools having higher borrowing rates than the compound. Users simply prefer to save rather than borrow, with an overall take-up rate of 34%.

Footprint Analysis – Total Borrows

Fantom dominates active users (70%). Polygon has attracted a few active users since launch, but mainstay Fantom is declining too quickly. New users are also on a steady downward trend.

Fingerprint Analysis – Active Address

Footprint Analytics – New address

When it comes to user behavior on April 26, Providers and Borrowers are less than Reprocessors and Repayers, with far more people in agriculture withdrawing and claiming than depositing. It doesn’t look good, and the trend of these numbers over the past 90 days is essentially the same, showing more users coming out.

Footprint Analytics – Address Preview April 26

When it comes to Hundred users, there are 15 DeFi projects per capita, averaging $1.41 million, with a relatively even distribution of users across various investment ranges.

However, these users’ investment range on Hundred is more below $1,000 (61%), which means that users are not using Hundred as their main investment platform, but rather on a trial basis. These users have invested an average of $140,000 on Hundred, which is only 10% of the total average investment amount.

Footprint Analysis – Avg. DeFi investment amount vs holding amount

Summary

As a fork of Compound, most of Hundred’s features are very similar, reducing the learning curve for new users. It also gives users no reason to ditch Compound, which has a first-mover advantage, and choose Hundred.

But for retail users, compound gas fees on Ethereum are not friendly enough, Hundred’s multi-chain layout solves this problem.

Although the team is constantly trying to innovate, the whole project is still based on a fork and the tokenomics is derived from Curve, which is still not exciting enough for users. The team’s lack of marketing also makes it difficult to be seen by more people.

After being attacked, Hundred’s overall performance dropped, and from the data performance, it has yet to find a breakthrough point to increase.
This piece is contributed by Footprint analysis community.

The Footprint Community is a place where data and crypto enthusiasts around the world help each other understand and acquire information about Web3, the Metaverse, DeFi, GameFi, or any other area of ​​the nascent blockchain world. Here you will find active and diverse voices that support each other and move the community forward.

The data source: Dashboard Footprint Analytics Hundred

Disclaimer: The views and opinions expressed by the author should not be considered financial advice. We do not give advice on financial products.

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