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 was completed, 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 series, signaling the full 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, providing reasons to be optimistic about its long-term prospects.
1. 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 single-chain and only having opened the Farming section among many products, can easily exceed $350 million, making it a definite DeFi unicorn project.
Therefore, 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 the Pencils Protocol will continue to break through and solidify its position among the top tier.
Thus, from the valuation of Pencils Protocol alone, it is expected to maintain a position alongside leading DeFi projects like Uniswap and AAVE, which means the valuation of $DAPP should align 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, as seen in the already launched Farming and Vaults products, which have robust revenue-generating scenarios. For instance, user participation in staking, transaction fees from using Vaults products, and lending income can all generate profits, especially with the collaboration between Vaults products and Mind Network, which can capture income from AI, FHE, and other networks.
Upcoming features such as auctions and Shop will further help Pencils Protocol establish deeper connections with more projects, ecosystems, and sectors, serving as engines for capturing ecological value.
Thus, the multiple profit channels brought by various product segments, combined with the current backing 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 provide strong upward momentum for 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 earnings from the Vaults section, early allocation in the auction section, and airdrops of future high-quality assets. Additionally, the DAPP token serves as an important circulating asset within the ecosystem, such as payment assets in the LaunchPad section and purchases of certain 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.
4. Low circulating supply
The DAPP token itself has a low circulating supply; for instance, neither the IDO round nor the airdrop round has been fully released, with only a small portion released initially and the remainder to be released linearly over the following months to a year. Meanwhile, whether within the platform, 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 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 possess essential demand and will be continuously burned, meaning that the DAPP token will always maintain a relatively low circulating volume.
Under the premise of low circulation, launching on more trading platforms will further drive the value of the DAPP token upward.
Overall, whether from the fundamentals 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.