DeFi Weekly #55

Optimism's $3.5m round (Investors hedging across the stack), Uniswap vs Uniswap (Protocol Defensibility), Binance and DeFi Tokens (Cashflows vs Moneyness)

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  • Just last week the infamously known Plasma Group managed to raise $3.5m and transition to a for-profit startup under the name Optimism. Paradigm and IDEO led the round mostly on a bet on the team and their talent around layer 2 scalability. Now what I find interesting with this announcement is that Paradigm has also invested in Starkware for scalability. Metastable is another case where they've invested in Starkware and Nervos (not exactly a pure layer 2 but demonstrates the point). As the crypto stack becomes more fragmented investors are going to increasingly hedge on all layers of the stack until it's clear where the value will accrue over a long enough time horizon. One thing that seems increasingly obvious is that full stack approaches are a losing game based on the evidence we have this far. Any team which has raised on the promise of being a full stack blockchain + application hasn't remotely gained any traction. My personal thesis around this is the fact that making a base layer is ridiculously hard from a talent and hiring perspective.

    Take for example Celo, Silicon Valley darling with all the right people behind it and $30m from their last round - they still haven't launched. The number of consensus layer engineers is easily less than 1000 worldwide. Furthermore there's two kinds of developers - missionaries and mercenaries. Missionaries work in the Ethereum/Bitcoin ecosystem and mercenaries go to the highest bidder. Layer 1 mercenary bounties are high as the largest players have warchests in the hundreds of millions or billions (EOS). It's even harder with the fact that not many of these layer 1s in San Francisco don't hire remotely when they really should given the tiny talent pool they're competing for. What's even harder is that you also need plenty of good blockchain understanding engineers to build the stack above node clients. That talent pool is even more fierce to compete with as developers have many more options and more interesting than the "new chain, lots of money" pitch. Once layer 2 tokens become all the rage we're going to see a similar war for layer 2 scalability talent which is almost like consensus layer stuff but a specialized skillset nevertheless.

    Talent wars are an underappreciated topic in the industry. Any crypto company that doesn't allow remote workers has to accept the fact that hiring will be a bottle neck in their execution plans. Moving away from the full stack approaches described above, a more interesting pitch to me is the semi-full stack approach. This is when businesses decide that building their own chain isn't a worthwhile pursuit but build large ecosystems around it instead. Examples of components in this stack are layer 2 ecosystems, developer platforms, custom wallet etc. I've got more thinking around this that I'll share in another edition.

  • As time progresses, on-chain liquidity is going to be increasingly important. Off-chain order books are good for certain use cases, however more primitives will rely on deeper on chain liquidity as time goes on. The sad reality is that no one has nailed a solid value capture model in this space. Kybers new tokenomics are mildly amusing to the market but still a loser overall. Uniswap is a fascinating case - and not for the reasons everyone raves about it for.

    Point 1 - Uniswap has solid defensibility as it has moneyful state in it. The more liquidity in the protocol, the more liquidity it attracts. Although Uniswap for better or worse, has no premine and no transaction fee cuts. Good for users, not so good for investors. Eventually when VC pressure kicks in, the team will need to add fees in v2 or v3 in the further out future. However the biggest threat to Uniswap will be the non rent seeking behavior of v1. Just like 0x v2 is a non rent seeking protocol (or a poorly attempted rent seeking protocol), 0x v3's biggest problem is its predecessor. If you think about it, the best time to launch and fund a new Uniswap competitor will be during the launch of a new version. I'd imagine that v2 could offer enough improvements that migrate liquidity over, however if v2 is similar to v1 (in terms of monetisation) then v3 is going to be harder to push as majority of improvements will be taken care of in v2.

    When developing a DeFi protocol having an auto migrate function after 1 year would be good trigger to forcefully move over liquidity in old protocol versions to new ones. Sounds simpler than done but could be a massive pain saver for teams in the future. I'm not sure how the community would react to such mechanisms but doesn't really mean much as long as liquidity isn't impacted.

    In a similar vein, DeFi Zap has been doing great in terms of ETH gone through the system but unlike Uniswap fails to build meaningful liquidity moats as value passes straight through their system. Their contracts are fully open source and can be redeployed without any cuts (should they be implemented). Front end defensibility only goes as far as the value differentiator in the product. One potential way to mitigate this would be to have money go through their smart contract wallet contracts and then move into the DeFi debt refinancing game which Instadapp is a lone wolf in. Zaps in their current form of a business aren't very strong as any revenue earned will result in DCF valuations (which isn't lucrative in crypto yet unless you're in the margin/exchange business).

  • My final point today is a follow-up on the above about cash flows but also BNB. In case you missed the memo, Binance low key changed their white paper to change the fact that BNB burn is based on traded volume and not profits. This could be a regulatory necessity or just Binance laughing on plebs who are hoping for that juicy 20%. Regardless, I don't think it really matters. A token which relies purely on DCF and provides no means of meaningful speculation will have a hard time in public markets. Binance's winning move was changing the primary use case as a pseudo loyalty rewards token to moving towards being money via it's IEO platform. Binance IEOs are some of the only in the industry that consistently produce good returns. By holding BNB you're hoping to accumulate more so you get first pick in the lottery and can differentiate yourself from other retail users.

    Access to profitable IEOs is worth far more than the hopeful bump in token price when Binance "burns" BNB (used quotations as the burn is super weak as it doesn't exert any buy pressure on markets). Every token should eventually be competing to be a SoV/moneyful - including Ethereum. It's always surprising when I hear pitches saying that a token just wants to be a MoE as it's like saying you'd never want your token to become something people deem as scarce. I think MKR faces this issue as well, the game theoretic component of it is a good but practically doesn't play out. In order for the MKR price to increase, ETH has to increase as well. In that case, the alpha from ETH is far higher than anything MKR would produced as MKR appreciating is a second order effect from ETH appreciating. The exception to this is SNX, I think they've really nailed this aspect and clearly demonstrated it by providing far higher returns than MKR or ETH in a one year time frame. I still don't hold any SNX but am potentially coming around to why it might be a good idea. Many irk away from it due to certain mechanics but as mentioned before, could be a good buy given the valuation it can grow into. In fact, SNX is the first token in DeFi that aggressively goes to funnel value back to the token.

    The ETH/DeFi purist view I think is unprofitable and will lead to the gradual demise of many DeFi projects and tokens if they don't change their thinking around value capture and tokens. Selling equity is an easy path but you're going to become beholden to monetisation/regulatory issues soon as the lack of revenue will cap you off from further rounds and probably lead to a token generation event eventually.

DeFi Weekly #54

dYdX AUM Drop 50%, Non-Ethereum DeFi & 2020 Musings

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Welcome everyone! I've taken a nice break from crypto-related stuff for the past month or so but I'm back now with DeFi Weekly. Plenty to cover so let's jump right into it!

  • During the drop to $120/ETH dYdX saw their total assets locked up drop from $30m all the way down to $15m! Why? Basically the volume of people trying to liquidate was so high that dYdX's front-end servers collapsed under the pressure. As a result many traders got liquidated and lost a lot of confidence in the platform. They're slowly making their way back up but it really shows how an incident like this can cause irreparable harm to a product/protocol's reputation when it comes to reliability. When we think about making software, reliability isn't a big as a focus compared to more traditional industries like medicine/automobiles etc due to the ease of making changes. However, I think the mindset of ensuring reliability in all cases is hard to enforce in the land of money enabled software as it takes a different mindset when designing your architecture (not just for smart contracts but the entire stack). The team's more than capable of fixing this but it should serve as a good reminder to any DeFi team that the reliability of your front-end is just as important as the reliability of your contracts, especially if the number of 3rd party interfaces for your protocol is limited. Furthermore, if liquidity is a moat to defend, a large loss of it can really impact both sides of the money market's equation. Stepping back though, one thing which does concern me is that when many liquidations take place on-chain liquidators are scrambling to liquidate eligible positions to claim a reward. Competitive bidding spikes gas prices up really high and anyone that doesn't keep up doesn't end up being able to liquidate a position. CDPSaver encountered this briefly during the last massive drop, but as the size of DeFi grows I'd anticipate this becomes a bigger problem. Protocols can mitigate this temporarily by increasing collateral requirements although there's going to have to be a point where we have to start moving DeFi to layer 2 and using the main chain as a settlement layer. I think there's a real opportunity for someone to build a layer 2 system that makes it attractive for many DeFi protocols to build on although the incentive for each team to come to a common layer 2 solution isn't particularly high. Furthermore, if there is some sort of layer 2 system, there's probably a great opportunity to introduce a token as well to capture part of that value. If there's one thing I've been hearing through various conversations, it's that the only real monetisation strategy in crypto is tokens. A layer 2 consensus token is almost as good as a base layer token - something that sells very well to VCs and other large investors.

  • I think everyone's in on the fact that DeFi is a great use-case for blockchain technology - only question is can competing chains get a piece of that action? As wrong as I could be, I'm willing to bet pretty strongly that no - they can't. Rule #1 in the DeFi game is that liquidity is king. Now when I say liquidity it has two aspects to it. First is the base layer coin must be liquid, valuable and have a large group of actors with accrued wealth from that coin. Second, the base layer chain must have a stable coin with a significant liquid pairing to the base layer coin (ETH/DAI, ETH/USDT etc). Third of all, you need developers to build out all the infrastructure to make money market protocols, synthetics etc. Many VCs are willing to bet that point 3 can be solved through better, faster technology + a strong developer community. However I think point 1 and 2 are commonly forgotten. Let's run through this:

    • Team: Hello, we're XYZ, an Ethereum "killer" that can do 10,000 TPS and solves the scalability trilemma

    • VC: Great, we'd like to get floor prices so by the time this goes to the public we can return a minimum 10x to our LPs or 1000x if you truly live up to your Ethereum killer promise

    • Team: Cool, we'll take your money and leave out retail because regulatory reasons but also we can use this as leverage for the next round of institutional money

    • VC #2: VC #1 came in? Great. We'll come in at a higher price as long as we know there's another round or retail comes next.

    • Team: Sure. rinse repeat until the token's been marked up 10x.

    Now the token itself launches, but what happens? Well, it basically dumps or only drops 50% (best case scenario). However there's also been a few key properties that are worth taking note of:

    1. Early VCs hold a large stake while making a killing from selling a small portion

    2. No retail people are interested because they weren't included in

    3. Developers aren't convinced about the viability of the platform as the only party that's shown confidence/trust is VCs whose agenda was purely monetary

    This poses a problem for being a competing "DeFi" chain since there may be a protocol to build a competing MakerDAO/Compound/Synthetix although who's actually going to lock up their money? Sure every VC talks about "generalised mining" and being "value add" but you've got to look at it from their point of view. Why would they lock up $10m worth of their tokens and then pay say 5% interest to borrow a stable coin unless they really think it's going to go up? But even then, I really don't think they're going to get mandate from their LPs to go long, risk the capital and pay for it as well. This also makes a big assumption that the base layer token has good on-chain liquidity via DEXs (because contracts gotta liquidate somewhere). Money locked in DeFi is from early ETH holders and ICO whales - something no other chain has. To conclude, money locked in DeFi doesn't represent capital but trust at it's core. Trust that the value of this ecosystem will go up and not liquidating at a low price is the smart thing to do. Conversely, I'd also argue that ETH locked in DeFi is capped out because the amount of people with capital who trust the price will go up is approaching a local maxima. The increases we're seeing are mainly because ETH locked in DeFi includes SNX tokens (which are on a good speculative run), people adding more ETH to prevent being liquidated and price increases. Don’t believe the Twitter hype of DeFi sky rocketing.

  • Finally - what I'm excited for in 2020! Well, I think for starters I'm excited to see all the ETH killers that finally launch this year. Not because I can't wait to see them fail, but because I actually think it represents a real buying opportunity. One of these chains that launches isn't going to be useful because it ends up "killing" Ethereum, but actually manages to find a niche that no one has really thought of yet. A key component of this being true is that I think the creation of new chains will ultimately dwindle to a near low as the years progress on. Raising money for a new chain isn't going to really be that viable as investors are tired of the new chain narrative but also regulatory issues are going to sprout up as crypto competes against the existing financial system. As the next wave of money being thrown is probably going to be at the application layer, the only base layer protocols available are going to be those that are live. I'm also pretty certain that any chain that was meant to launch this year but doesn't is going to die into obscurity as the amount of catchup will be astronomically high. Similarly, we're going to see at least one, potentially more equity companies transitioning into open source protocols with a token. DeFi tokens may turn out to be extremely lucrative plays provided the value capture mechanism is good and profits earned create price action. Kyber and 0x's recent tokenomic changes have left the market underwhelmed since drive in usage doesn't have a strong correlation to the price of the token. These tokens may be initially overvalued but will represent a good buying opportunity when things cool down once again. All of this experimentation and shipping is ultimately going to set the stage for the next bull market which will fuel the next generation of speculators allowing the industry to grow and contract in another large macro cycle.

  • I hope you all enjoyed this week’s edition, also feel free to reply directly to this email to let me know your thoughts on the above!

DeFi Weekly #53

Zerion Raises $2m Seed Round, Uniswap Black-Lists Sanctioned Countries

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  • First up this week, Zerion raises $2m seed round! I find this worth taking note of as it's the second DeFi interface startup to raise within that range (after InstaDapp). Both teams executed their raises by having a couple of thousand users actively using their products. What isn't clear though for both teams is the business model as they continue to execute. I touched upon this last week about how Compound faces issues with being regulated if they decide to charge a fee. DeFi interfaces will also face a similar trajectory, if not harder one, as they don't have the added benefit of having network effects of liquidity. Most plays in this category fall into the "entry portal to crypto" thesis where if you capture the relationship with the user you own a much larger stack. However I actually don't think there's enough validation for this hypothesis at this stage. DeFi users in their current form look for lowest prices with acceptable convenience. Key word being acceptable. Case in point: Dharma has launched for a few months and still only has $1m locked up via their proxy contracts. InstaDapp has 30x the amount but by virtue of 1 large whale 10 smaller ones (there's a post that breaks down this data). Owning the relationship with the user is key in all technology products but one to provide commodity services isn't lucrative in itself. DeFi in its current form doesn't actually value UX, liquidity is the key MOAT and driver of success. Liquidity is driven by usage but the difference between web 2 users is the fact that each app needs to be trusted by consumers to a much higher degree since the literal item on the line is money. Trust is paramount and likewise brands carry more weight than they usually would. For an industry which prides itself on being trustless, users actually want someone/something to trust that can reduce cognitive overload and take care/put their money to work. Front-ends aren't actually valuable by themselves, the brand that they build around them is key. However, should a brand with enough trust and lower rates springs up it should be enough to prompt users to go elsewhere as seen in the past. The winning combo in my opinion seems to be a great front-end, solid protocol engineering and most importantly - a token that captures this value. This is probably a good segue to the next piece of new for this week.

  • Uniswap low-key bans a bunch of countries that the US has shaky relations with. However, there wasn't an official announcement - just a silent code push with no comments from Hayden or anyone else on the project. What is interesting is the fact that someone happened to re-host the front-end on IPFS without the restrictions. It's great to see the permisionless nature of these technologies take place although I think it's a key event to take note of. Many venture funded companies such as Dharma, dYdX or Set only release the bare minimum as open-source to create defensibility around their business model. However as we see more regulatory action crack down, without the front-ends many of these protocols would lose liquidity unless they have strong developer network effects at the protocol layer. The only two in my opinion that can survive are Compound and MakerDAO. The rest still have catching up to do. Dharma wouldn't have much choice as their entire value capture model is owning the end-to-end user experience, although that being said they probably could become regulated since they're aiming more for the US centric high-interest account play (evident through emphasis on Coinbase above other sign up options). Thinking about this a bit more deeply it becomes clear to teams that they have two choices, either bootstrap initial liquidity from existing protocols then capture value at lower levels of the stack with their user's liquidity OR build the protocol and a front-end and hope that other teams eventually build on you through your organically bootstrapped liquidity. The former option appeals to venture funded companies while the latter appeals to token-based companies. In most cases I'd say that it's hard to say which approach is better but it seems that the token based plays have a clear path to value capture and organically growing with increasing network effects due to the shared upside. No venture funded DeFi company has a remotely good chance of profitability due to their ties with the existing legal and financial system while we have MakerDAO and Synthetix becoming $100m+ protocols and a much wider group of people who are interested in their success. A project to keep an eye out for is UMA, they started off venture funded but releasing their governance token soon. My biggest question with them is how they'll continue to raise capital with a small initial raise and the tokenomics that would heavily incentivise VCs. This doesn't just go for UMA but any protocol that takes a longer term path to liquidity, if your token's market cap is $5m at $0.05, in order to raise $2m in additional capital will you need to sell 40%+ (assuming no spot discount) of your total token supply. An obvious answer might be that just set the price higher so the MC trades higher, although that becomes hard if there's enough liquidity on the market to begin with. Teams would instead need to over-charge compared to spot price by magnitudes in order to have healthy financing (which they can if liquidity is super limited which it most likely will). I don't think this is completely out-of-reach but I haven't heard much of this playing out in practice. If anyone has more ideas/thoughts on this I'd love to chat with you. To finish off the point I was making earlier, a good front-end + solid engineering + token = winning combo in crypto. Other methods rely on the VC machine to keep pouring money at higher valuations with unknown paths to profitability (which does have its benefits).

DeFi Weekly #52

Gods Unchained smashes records, Compound raises $25m, Synthetix Spartans are taking over

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  • Hello everyone, this week's DeFi Weekly is going to be a monster but buckle in as there's plenty of important things going on.

  • It's no secret that Gods Unchained is smashing records by minting over 7m+ NFTS over the past few days leaving CryptoKitties behind. The only difference is they haven't clogged the entire network while doing it. How? Well for starters: incentives. Even in 2019, as soon as investors hear of a base layer chain the pattern matching kicks in and it seems to be a worthwhile gamble to make. Joel Monegro’s Fat Protocol thesis is probably the most influential, yet misguiding, blog post written in the entire space. The thesis that value ONLY accrues to base layer chains is terribly misguided. It's not to say that it won't, but blindly believing that it's the only way is a sure shot way to lose out on the next set of returns. Gods Unchained is a perfect example of the application layer creating and capturing value ($6m worth of cards sold out) while still using "slow" blockchains (Ethereum). I'd expect over the next year or two we're going to see even more applications come out that create more value. While majority of generation 1 DeFi is infrastructure focused (MakerDAO, Compound, dYdX, Synthetix), generation 2 of DeFi is becoming increasingly application layer focused (Dharma, PoolTogether etc). This leads to my next point in today's edition:

  • Compound raises $25m for their Series A! This is a pretty big achievement as it's the most money we've seen being poured into a DeFi equity based company. Robert Leshner has a great track record which helps, but the key milestone is the fact over $100m in loans has been originated from their platform. It's not a secret that Compound's Seed investors enjoyed a good on-paper return after this Series A, however does that validate that investing in infrastructure is necessarily valuable? For context, Compound doesn't actually make any revenues as an entity. Why? As per SPT0615-JD on Reddit, "extracting fees will make them a VASP and subject them to AML/CFT requirements and licensing. Right now they are defensibly a software provider, not a money services business." (source: https://www.reddit.com/r/ethfinance/comments/dwbwiw/compound_raised_a_25_million_seriesa_from_a16z/). We're seeing Compound take the classic Silicon Valley route of creating value and then capturing it later. This model has worked very well over the past 20 years with todays' unicorns but will the same playbook work in crypto? Not so sure. In order for Compound to extract fees they're more or less going to have to become regulated which means... KYC! So when/if that happens, Compound's defensibility may go down as liquidity moves away. The reason why I say that is that actors in DeFi don't actually care about the entity providing capital, as long as it provides capital at good rates. We saw this first-hand with Dharma when they started subsidising loan origination. After the subsidies were cut we saw a sharp 40% decline in liquidity. Orders with the P2P loan matching were also present but I wouldn't count it as a large reason. The counter force which Compound is banking on is creating a larger developer community and integrating with more end user applications (exchanges, wallets etc). Since Compound is based in the US and not fully decentralised, they're still under the mercy of the SEC. Right now lending protocols aren't really on their radar, but given another 2-3 years we're going to see regulation become a more dominant theme in the space. Will the create capture value later model work or fail in crypto?

  • Last and final point for today, Synthetix is making massive waves this week by taking out second place on DeFi Pulse! What's caused the spike? It's hard to say directly but part hype and part value. In May earlier this year the amount of ETH locked up went from a few million to close to $20m. The market for once actually reacted to this fundamental value creation and the price of the token rose as well. This virtuous cycle continued till a16z invested $250k causing the price to go on an even more aggressive upwards trajectory. From the hype of the token price it's also attracted more users to the platform causing the amount of ETH to be locked up to reach over $100m! On the surface this doesn't really sound like a big deal but in comparison to Compound it's worth thinking about more deeply. Synthetix is creating and capturing value directly through their token which anyone can buy into. Value capture is created alongside value creation rather than being deferred into the future. In the current climate of 2019, tokens are extremely unpopular amongst investors as it doesn't offer the same rights and protections as equity. However the outsides returns from tokens and immediate liquidity are hard to ignore. This post by Chris Burniske is one of my favourites that I keep referring to every time: https://medium.com/@cburniske/the-best-time-to-buy-build-tokens-d14ebe7acbd3. It'll be interesting to see which tokens make their comeback from the graveyard after extreme 2017/18/19 sell pressure. Regardless, congrats to the Synthetix team for the achievement!

  • That’s a wrap for this week!

DeFi Weekly #51

Dai cap raised to $100m, Crypto lending markets lose their shine, dYdX moves away from 0x

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  • Hello $100M DAI ceiling cap! It's taken almost 4-5 years for the Maker Foundation to reach this point. Since the stability fee has dropped to 5.5% we've seen more whales take out more leverage on cheap ETH. It's unfortunate to see how lending rates have dropped from 15% all the way to 5%. Suddenly lending your money on DeFi doesn't really make sense as you're only beating the banks by 3% maximum but also taking on a lot of unquantifiable risk. Compounding this problem if you live outside the US then the fiat currency conversion better not be more than 3% otherwise you lose out on any interest that you may have accrued. High interest rates are a great use cases, provided that they can be high over a 5-10 year time horizon. As a space we got a glimpse of what practical blockchain applications could look like but like most things, I think it's still in the prototype stage. Dharma, Linen, Outlet and Juno (relayer on Nuo) will be interesting to see play out. Dharma's $ locked up has decreased to $800k in the past few days. Juno has a better chance as Indian lending rates are close to 0 however we'll need liquidity in INR stable coin lending pools - which the space is still too young to cater for. I've covered this in previous issues of this newsletter but the biggest limiting factor to crypto markets at this point in time is liquidity. Without it all the amazing ground breaking use cases we come up with aren't worth much. A useful mental model I find to think about this stuff is as follows:

    • Objective 1 - build a global and secure base layer network that enables composability (Ethereum)

    • Objective 2 - have some behaviour/objective that drives liquidity from the real world into crypto

    • Objective 3 - create financial products from liquidity in new interesting ways (DeFi industry today)

  • For the past few months I think a few of us in crypto were excited about the fact that objective 2 could be fulfilled by high interest rates and savy retail investors buying in. However with sliding interest rates I don't see this thesis playing out as strongly in the short term. The only counter argument would be that 3rd world countries could benefit from even 4% however for that to work: either USD needs to be the primary currency they care about and can get in with minimal slippage (big shot with current regulatory environment) or native currency money markets (ETH/DAI/USDC) are king at the moment. The only unexplored thesis for objective 2 could be NFTs...

  • The second interesting point I found this week was dYdX rejecting support for 0x v3 moving forward. Why? Because their native ETH/DAI market is better than 0x's and they don't want to value to accrue to ZRX token holders. On the surface this may not seem like a big deal but I think it gives us hints as to what the future of value capture may look like. Unpacking this slowly, first of all dYdX can still support and most likely will support v2 since a large amount of liquidity still exists there. The reason why they can choose to reject v3 is because infrastructure can't be undeployed and v2 will continue to exist forever. Effectively this means that open source infrastructure requires new network effects to be re-established whenever a new update comes out. ZeroEx being ZeroEx has a large relayer community that it supports, and by being part of that community they're also locked in to ZeroEx's utilities. For example, if you ever integrate into the ecosystem there's a lot of helper libraries and abstractions that help non-blockchain heavy teams establish and plug into relayer networks. If tomorrow all of this code only supports v3 and support for v2 is slowly dropped, more teams might just think it's worth biting the bullet rather than investing the amount of engineering to ensure backwards compatibility. dYdX was able to bootstrap their initial application through 0x, ETH2DAI and Kyber liquidity pools, however once they build up sufficient network effects they moved away from 0x (the only off-chain orderbook) to their own orderbook and existing on-chain liquidity pools. Long story short, applications that grow large enough can effectively build the underlying stacks that they sit on top of. Forks aren't the real threat in open-source infrastructure, retaining large players is. To make this point clear, DDEX also followed in a similar suite. Although they claimed to fork, what they really did was move off 0x once they got large enough and built their own infrastructure that suited them. Extrapolating forward could it be that once interoperability finally works (5-10 years from now) everyone builds on open permissionless networks until they can actually create their own chain and cannibalise the layers below them? DapperLabs is attempting to do this with Flow but I think the time is too early for base layers to be "forked" out from the brand's user experience.

On Chain Statistics

  • Total Locked in DeFi: $650M (ETH ATH).

  • Biggest Gainer: Synthetix up by another $10m reaching $100m locked up!

  • Interesting Stat: Augur continues to fall down the ranks to a mere $600k locked up.

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