Recently, the leading DeFi protocol in the Scroll ecosystem, Pencils Protocol, has made significant market advancements. 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 Gate, Bybit, and other platforms on September 27, along with the launch of activities including Trade to Earn and Staking, signaling 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 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, with its TVL already surpassing $350 million, accounting for about half of Scroll's TVL. Even from an industry perspective, Pencils Protocol, being single-chain and only having 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, capital, and users within the Scroll ecosystem, but as its multi-chain trend develops and its business expands, 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.
- Strong profitability
Pencils Protocol itself possesses strong profitability. For example, 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 connections with more projects, ecosystems, and sectors, serving as engines for capturing ecological value.
Therefore, the multiple revenue streams brought by various product segments, combined with 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 increase 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 returns from the Vaults segment, early allocation of auction segment quotas, 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 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 the DAPP token in the Pencils Protocol ecosystem will remain strong.
- 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; 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 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 maintain its strong demand and will be continuously burned, meaning that the DAPP token will always have a relatively low circulation.
Under the premise of low circulation, launching on more trading platforms will further drive the value of the DAPP token upward.
Overall, from the fundamentals of the Pencils Protocol project, its profitability, the DAPP token model, and the fundamentals of deflation and market circulation, it possesses strong upward momentum and is worth holding long-term.