Recently, the leading DeFi protocol in the Scroll ecosystem, Pencils Protocol, has made significant market progress. Starting from September 18, the $DAPP token has successively launched IDOs on platforms such as Tonkensoft, Bounce, and Coresky, selling out in a short period. After the token sale, the DAPP token was also listed on platforms like Gate and Bybit on September 27, along with the launch of activities including Trade to Earn and Staking, indicating the comprehensive activation of the ecological economic system.
The user enthusiasm for the new market of $DAPP has been immense, and we also have certain growth expectations for it in the secondary market, giving us reason to be optimistic about its long-term potential.
1. Leading protocol in the Scroll ecosystem, attracting users and funds
Pencils Protocol is the leading DeFi protocol in the Scroll ecosystem, with its TVL already surpassing $350 million, accounting for about half of Scroll's TVL. Even from an industry perspective, Pencils Protocol, being a single-chain protocol that has only opened the Farming segment among many products, can easily exceed $350 million, making it a definite DeFi unicorn project.
Thus, it is not only capturing top resources, funds, and users within the Scroll ecosystem, but with the development of its multi-chain trend and business expansion, the TVL data of Pencils Protocol will continue to break through and solidify its position among the top tier.
From the valuation of Pencils Protocol alone, it is expected to maintain a position similar to leading DeFi projects like Uniswap and AAVE, so the valuation of $DAPP should be aligned with top assets like UNI and AAVE. Currently, with $DAPP just launched on CEX and trading just opened, there is significant room for value appreciation.
2. Strong profitability
Pencils Protocol itself possesses strong profitability. For instance, the already launched Farming and Vaults products have robust revenue-generating scenarios, such as user participation in staking, transaction fees from using Vaults products, and lending income, all of which can generate profits. Particularly, the collaboration between Vaults products and Mind Network can capture income from AI, FHE, and other networks.
Upcoming features like auctions and Shop will further help Pencils Protocol establish deep links with more projects, ecosystems, and sectors, serving as an engine for capturing ecological value.
Therefore, the multiple profit channels brought by various product segments, along with the current support of over 550,000 active users and $350 million TVL, will generate substantial trading volume and considerable ongoing platform revenue for Pencils Protocol. The platform will use part of its revenue to buy back and burn $DAPP tokens, which will bring strong upward momentum to the token, forming an important value foundation for the continuous appreciation of the DAPP token.
3. Multiple application scenarios
The $DAPP token is an important ecological token on the Pencils Protocol platform. Holding DAPP tokens will grant a series of rights, such as enhanced returns from the Vaults segment, early allocation in the auction segment, and airdrops of future high-quality assets. Additionally, DAPP tokens are also important circulating assets within the ecosystem, such as payment assets in the LaunchPad segment and purchases of certain RWA assets in the Shop function.
It is foreseeable that, as a result of a series of application scenarios, the demand for DAPP tokens in the Pencils Protocol ecosystem will continue to remain strong.
4. Low circulating supply
The DAPP token itself has a low circulating supply. For instance, whether in the IDO round or the airdrop round, it is not fully released; instead, only a small portion is released initially, with the remainder being released linearly over the following months to a year. Meanwhile, both within the platform and on CEX or among some DeFi partners, a series of staking scenarios for DAPP tokens have been established, such as the upcoming Farming of DAPP tokens on the platform and Staking launched on Gate and Bybit, which will further restrict the circulation of DAPP tokens. With the introduction of Vaults and the auction feature next month, the DAPP token will further maintain its strong demand and will be continuously burned, meaning that the DAPP token will always maintain a relatively low circulation.
Under the premise of low circulation, the launch of more trading platforms will further drive the value of DAPP tokens upward.
Overall, whether from the fundamental aspects of the Pencils Protocol project, its profitability, or the DAPP token model and its deflationary and market circulation fundamentals, it possesses strong upward momentum and is worth holding long-term.