Recently, the leading DeFi protocol in the Scroll ecosystem, Pencils Protocol, has welcomed a series of significant market developments. 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 was completed, the DAPP token was also listed on Gate, Bybit, and other platforms on September 27, simultaneously launching activities including Trade to Earn and Staking, signaling the comprehensive launch of the ecological economic system.
The user enthusiasm for the new market of $DAPP has been immense, and in the secondary market, we also have certain growth expectations for it and reasons to be optimistic about its long-term prospects.
- Leading Protocol in the Scroll Ecosystem, Attracting Users and Capital
Pencils Protocol is the leading DeFi protocol in the Scroll ecosystem, currently boasting a TVL that has surpassed $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 sector among many products, can easily exceed $350 million, making it a solid DeFi unicorn project.
Thus, it is not only capturing top resources, capital, 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 secure its position among the top tier.
Therefore, just from the valuation of Pencils Protocol, it is expected to maintain a position similar to top 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.
- 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 be profitable. Especially, 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, and will also serve as engines for capturing ecological value.
Thus, the multiple profit channels brought by various product sectors, combined with the current backing of over 550,000 active users and $350 million TVL, will generate substantial trading volume and yield 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.
- 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 earnings from the Vaults sector, early allocation in the auction sector, and airdrops of future high-quality assets. Additionally, the DAPP token is also an important circulating asset within the ecosystem, such as payment assets in the LaunchPad sector and purchases of some RWA assets in the Shop function.
It is foreseeable that, as a result of a series of application scenarios, the DAPP token will continue to maintain its essential demand within the Pencils Protocol ecosystem.
- Low Circulation Supply
The DAPP token itself has a low circulation supply. For instance, whether in the IDO round or the airdrop round, it is not fully released; instead, a small portion is released initially, with linear releases 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 have been established for the DAPP token, such as the upcoming Farming of the DAPP token on the platform and Staking launched on Gate, Bybit, etc., which will further restrict the circulation of the DAPP token. With the introduction of Vaults and the auction feature next month, the DAPP token will further possess essential demand and will be continuously burned, indicating that the DAPP token will always maintain a relatively low circulation volume.
Under the premise of low circulation, launching more trading platforms will further drive the value of the DAPP token upward.
Overall, whether from the fundamentals of the Pencils Protocol project, the project's profitability, or the DAPP token model and its deflationary and market circulation fundamentals, it possesses strong upward momentum and is worth holding long-term.