Read on Twitter
This was an excellent overview of what's happening in the DeFI world and the thesis behind some of the larger VC funding these teams. https://twitter.com/CoveringDelta/status/1287745067789225985
It also highlights a lot of the elements that I find particularly off-putting about this space. Framework Ventures describes themselves as "managing these things like a central bank" when talking about the pegs of Synthetix assets.
The influence that VCs and funds have over these protocols is not unlike the how the wealthy and well-connected can influence legacy markets, media and governments.
I feel, maybe wrongly, that this very much against the crypto ethos. In one way or another we have ended up embedding power and influence structures into blockchain and smart contract platforms as a stopgap while true decentralisation is to be achieved soon™.
While these investors may be very noble and well meaning, you cannot assume that they'll be as willing to give up their influence over these networks when the time comes.
Likewise, you cannot assume they may not be financially incentivised to make things happen in one way or another at some point as the governance of these protocols evolves.
Funding is also particularly difficult for the fair-launch projects, as they are not as capitalised as VC-backed ones and end up relying on donations - see Grin after launch, and more recently, the whole discussion around supporting Bitcoin Core developers.
This is not something that is immediately obvious to many, but a self-funding mechanism can enable these networks to develop truly disruptive infrastrucutre and use cases that don't have rent-seeking built in to justify the ROI for those funding development.
@RichardRed0x did a deep-dive on the self-funding mechanisms that were live towards the end of 2018. https://medium.com/@richardred/decentralized-autonomous-funding-of-blockchain-projects-3c0c233ae4ad#fd26
Politea, Decred's proposal and off-chain governance system, launched nearly two years ago and has two ground-breaking proposals that are going to be delivering results imminently.
First is the decentralization of treasury funds - this will give the network stakeholders direct approval over the Decred contractor payouts.
The second is the introduction of a feeless, self-custodial, fair and truly decentralized exchange (DEX). https://blog.decred.org/2018/06/05/A-New-Kind-of-DEX/
This kind of public infrastructure will benefit the wider cryptosphere without enriching any single party and forcing users to go through a specific token as a middleman.
This is what Decentralized Finance should really be about.
