Read on Twitter
Some thoughts on long term value accrual of DeFi protocols
Firstly, I'm a big fan of @AndreCronjeTech and what he's done with yearn and yfi
From his appearances on the @bankless and @DefiantNews you can tell he's well intentioned and is mad for yield
Firstly, I'm a big fan of @AndreCronjeTech and what he's done with yearn and yfi
From his appearances on the @bankless and @DefiantNews you can tell he's well intentioned and is mad for yield
I found it amusing when he was talking about creating the YFI token, it wasnt out of greed but out of necessity for his protocols success
He issued it because he needed more people engaged in building out the platform
He knew he could never keep doing it all himself
He issued it because he needed more people engaged in building out the platform
He knew he could never keep doing it all himself
Given the speed of blockchain development, the only way a protocol can stay competitive is by getting as many talented people engaged as possible.
The scope of work to be successful is too big for any one team
Credit to @rleshner, @kaiynne and others for recognizing this early
The scope of work to be successful is too big for any one team
Credit to @rleshner, @kaiynne and others for recognizing this early
Andre recognized this, and also that liquidity incentives are not a long term solution, and to be competitive you must consistently offer the highest yielding products.
The only way to do that is to incentivize teams of people to produce new strategies
The only way to do that is to incentivize teams of people to produce new strategies
This is why the new yearn strategies are so interesting, it's setting up the framework for yfi to outsource this work and to sustainably have the best yield strategies.
Although you wonder how much of a moat there is when other protocols adopt the same strategy
Although you wonder how much of a moat there is when other protocols adopt the same strategy
It brings up an interesting point about value accrual, will it be these mercenary dev teams that ultimately accumulate all the value as they field offers from competing protocols?
Will YFI and other protocol governance get savvy and offer incentives for exclusive contracts?
Will YFI and other protocol governance get savvy and offer incentives for exclusive contracts?
Will protocols advertise theyve got the samczsun of yield strategies on their roster?
Maybe the teams tokenize themselves
What if eventually the best strategy producers are ML bots like GPT-3, and the best yield platforms have proprietary AI strategy generators
Who knows
Maybe the teams tokenize themselves
What if eventually the best strategy producers are ML bots like GPT-3, and the best yield platforms have proprietary AI strategy generators
Who knows
Each DeFi protocol is unique and faces different challenges to preserve their network effects
The only constant seems to be you need the best and deepest community working full time to keep your protocol competitive and tokens are a great way to ensure that happens
The only constant seems to be you need the best and deepest community working full time to keep your protocol competitive and tokens are a great way to ensure that happens
