From March 20-24, 2023, the fifth Paris Blockchain Week Summit 2023 took place, bringing together over 350 companies and 1,130 experts from both traditional finance and cryptocurrencies.
More than 100 speakers took the stage across three different areas, including Joseph Lubin, CEO & founder of ConsenSys; Jeremy Allaire, Chairman and CEO of Circle; Stephen Short, CEO of Wixpool, and Jean-Noël Barrot, French Minister for Digital Transition.
This year, the speakers discussed how traditional financial institutions can use the experience of cryptocurrency projects to fight inflation and stabilize currency exchange rates. They highlighted the experience of crypto-lending and liquidity mining projects.
"Now we are carefully studying the experience of cryptocurrency projects. They have already shown us how to stabilize profitability in their field, and we believe that this experience can be transferred to banking. In particular, we are developing mechanisms for applying stable liquidity mining technologies to improve the monetary policy of French banks," said Jean-Noël Barrot, French Minister for Digital Transition.
Stable liquidity mining, which Barrot talks about, is an "advanced" version of traditional liquidity mining that differs from it in terms of protection from volatility. This technology was developed by the British company Wixpool in 2017 and was made available to the public in 2022.
The advantage of stable liquidity mining is that it automatically rebalances liquidity pools, ensuring stable profitability regardless of market conditions. For example, when the profitability of one liquidity pool decreases, the algorithm automatically transfers funds to another, more profitable pool.
"While other projects offer to invest in highly volatile liquidity pools with high but rapidly declining profitability, Wixpool offers the same profitability but with a fully stable rate," said Stephen Short, CEO of Wixpool.
According to Joseph Lubin, CEO and founder of ConsenSys, stable mining technology can have wide-ranging applications both within and beyond the cryptocurrency space. For example, the principles of stable mining can be used in traditional finance to stabilize investment returns and reduce risks.
Furthermore, stable mining liquidity technology can be used to fight inflation. Banks can use this technology to create stable currency funds that are protected from market volatility. This can be especially useful for countries where inflation is a problem.
Finally, stable mining liquidity technology can be used to improve bank monetary policies. It can help banks manage liquidity more accurately and provide market stability.
Stable mining technology can have broad applications in traditional finance. Although practical applications of this technology in traditional finance may not be for another 5-10 years, it has already demonstrated its potential in the cryptocurrency space. The technology can be a useful tool for creating and developing investment products as well as for private investments.