Hey all, I believe that DeFi is amazing and allows individuals the ability to not only make the network stronger, but be their own bank. The issue I is that there are so many DeFi projects that all require you to have a different wallet, wrapping and unwrapping tokens, swapping, etc…, which is probably why most won’t participate in the space. I was listening to Kevin O’Leary “Mr. Wonderful” who used his own children and their friends as test subjects on a finance app, all of them said that it was to slow and not user friendly so they had to keep making it easier and easier to use until with just a click of a few buttons and less than a few minutes they were all set up and investing. I see the same problem with the DeFi space. I would attempt to build a platform that could cross bridges and bring the different platforms into one space, simplify the DeFi!
@amadeobrands My background is in Finance and eCommerce, therefore DeFi is very fitting. I would like to bring financial access to smaller Latin American producers so they can sell their products in the North American markets and vice versa. . I would love to see trade totally decentralized in the entire American Continent. I’m hoping to help a bit with my blog TradeWithoutWalls.com Obviously, a very small step in a vast industry.
Carbon Dollar
PROS:
Creating the token off the blockchain is the easy part.
A carbon dollar will be internationally acceptable.
Value is in tons of sequestered carbon, the more tons sequestered, the more money there is.
Sequestered Carbon is a natural resource akin to oil reserves.
In a sense a Carbon credit is a Proof of Work. (Bitcoin model) Whereas Bitcoin PoW requires energy/electricity as its input, this model can work on tons of sequestered carbon.
How reach consensus and solve Byzantine Generals problem.
Ties in with the ESG thrust (https://www.investopedia.com/terms/e/environmental-social-and-governance-esg-criteria.asp)
According to the UN Sustainable Development goals (https://sdgs.un.org/goals)
Challenges:
- ensure the credits are locked to the blockchain, or burnt at token issuance
- Issuance via an exchange
- Where does the blockchain reside
- PoS blockchain
- Banks as nodes
- Secure enough credits to cover Money Supply
- Legal tender
- Extractive industries to buy credits to offset
How to create the credits?
1/Public:
Hydro
National reserves and parks
2/Private:
Solar
Energy efficient stoves
Tree planting
Litter
Plastics and tyres
Regen ag
Sorry! I posted that in the wrong place
Carbon Dollar
PROS:
Creating the token off the blockchain is the easy part.
A carbon dollar will be internationally acceptable.
Value is in tons of sequestered carbon, the more tons sequestered, the more money there is.
Sequestered Carbon is a natural resource akin to oil reserves.
In a sense a Carbon credit is a Proof of Work. (Bitcoin model) Whereas Bitcoin PoW requires energy/electricity as its input, this model can work on tons of sequestered carbon.
How reach consensus and solve Byzantine Generals problem.
Ties in with the ESG thrust (https://www.investopedia.com/terms/e/environmental-social-and-governance-esg-criteria.asp)
According to the UN Sustainable Development goals (https://sdgs.un.org/goals)
Challenges:
- ensure the credits are locked to the blockchain, or burnt at token issuance
- Issuance via an exchange
- Where does the blockchain reside
- PoS blockchain
- Banks as nodes
- Secure enough credits to cover Money Supply
- Legal tender
- Extractive industries to buy credits to offset
How to create the credits?
1/Public:
Hydro
National reserves and parks
2/Private:
Solar
Energy efficient stoves
Tree planting
Litter
Plastics and tyres
Regen ag
Idea: Create an escrow system for peer-to-peer crypto asset trades on the Solana blockchain.
I don’t know what I would like to create yet, there are so many opportunities in DeFi, probably I would like to give some talks on it and identify the needs of the people who are learning about it for the first times, what they think about it.
To create a whole tokenomics with value for people might be something, I still aquire more ideas by learning as much as possible about this space and with Moralis Academy.
I think this is an interesting idea, but id have to add that it might be important to offer a sort of NFT (maybe as a membership card or something) in order to take pressure off of the token in the market.
I have had many ideas, but they are just that, ideas. I dont have the technical ability to see how they will happen but seeing how the blockchain space is growing, i know it is only a matter of time before much of what we think about comes to fruition.
I think the DEFI space will start to incorporate NFTs, either as a member type token offering benefits or fractionalizing already existing ones in order to leverage value that is off the markets. This could exist with real-estate and other ownership as well since we know companies like Realt.co are putting properties on the blockchain.
As this develops i think we are going to see existing Defi sources incorporate or become involved in DAOs, NFTs, and realworld assets. They will all merge.
tldr: this paper discusses a blockchain-based vending machine, in which space is locked over some time to allow for a dutch auction to occur on the physical good inside.
The DeFi idea here is that with sufficient value locked inside as fees, you can imagine collateralizing that and/or adding liquidity to pools using the same token for some return… furthermore, if there was sufficient interest in sufficiently high dollar- value “escrow” like this, the ownership could be tokenized and a DAO could control the fee schedule and profit-taking, etc, maybe use an insurance protocol…
i was thinking this probably isn’t best-suited for things like gold-bars or high-dollarvalue items, but it could add physical settlement assurance to items otherwise too difficult to put on-chain, i.e. kind of an oracle for things you might find or craigslist, ebay, etc! haha
all that’s in the paper, i just thought it was a solid way to instantiate off-chain assets on-chain.
@amadeobrands i’m really interested in your input on this; i think it has potential beyond just the standard “vending machine” conception… what do you think?
edit: i d k why i keep pricing crypto primitives in dollars as though dollars are somehow more sound: so silly.
The DeFi 201 course has opened my mind up to a much deeper understanding of this space. I made my first crypto investment back in October of 2020, but I only had a superficial view of the space compared to now. Analytics and lending are the two things that interest me most about this space, and I believe those aspects are where I have the clearest and deepest understanding. The importance of having constant and reliable data to continue building in this space is undersold in my opinion. For smart contracts and developers to excel as a whole, data and market conditions need to be relayed at a mind-numbing rate. Risk is also a big factor to weigh when making any type of move in crypto, and after being somewhat successful in its world while also having a couple bull runs worth of experience under my belt, I believe I can thoroughly navigate through the major risks and manage portfolios in a beneficial way for anyone (or business) looking to get into crypto. A possible crypto risk analyst or risk management position in this space I believe would be my most successful potential calling. I also have a bit of experience taking finance and business management classes in community college, which I could definitely transfer knowledge from (then into a DeFi role). Nothing would make me happier than helping people safely navigate and achieve financial stability in a space that’s interested me for quite a long time now. Lending in this space is the other aspect that has really intrigued me, and as mentioned in Decentralized Finance: On Blockchain- and Smart Contract-based Financial Markets by Fabian Schär (one of the articles provided), up-front collateral as well as credit can be the basis for anyone to obtain a loan in the world of DeFi. In my opinion, this opens up a lot of doors for
more people to obtain loans as opposed to TradFi (which is mostly based off prior credit building). Pool-collateral debt markets help people get up front admission to participate in the practice of DeFi lending, which I believe is fascinating compared to traditional financial methods. In this aspect of the DeFi world, I would love to establish a decentralized pool and tokenize related to real-world purchases like homes, cars, business loans, etc. In the most previous lecture of this course, David Hoffman mentioned his company RealT, which tokenizes real estate for people and provides a very intriguing bridge between the worlds of TradFi and DeFi. This idea really caught my eye and I thought was genius. My idea would be to create a pool that not only tokenizes real estate purchases, but any type of lending form relating to real world finance.
I am still working on my paper; but here is my first draft ( I am working on what part of DeFi i would like to search but most probably coffee supply chain; tracking the process of good coffee and reducing the middle-man expensive cost and how to increase the revenuew for coffee growers
2022 DeFi risks and opportunities; Surviving the worst crash since Bitcoin inception
DeFi risks and opportunities; Surviving the worst recession since Bitcoin inception
Can Bitcoin and other cryptocurrencies survive a ‘real’ bear market?
Certainly new outside economic events affect markets, including crypto.
The most recent big events is the Ukraine and Russia in dispute for two west regions causing Ukraine to be backed up by NATO and allies to fight against what Westerners call Russia invasion. Overall, this is impacting the global economy in oil and major commodities of the region.
The other event is rising rates of the FED and central banks to control inflation. That rapidly forced many market players to withdraw from assets and park the money in dollars.
The rise of crypto since the black Thursday in November 2020 and now hard landing is testing which projects will survive, adopt and build innovated products that keep the DeFI ecosystem dreaming in the promise of providing better Financial products
After Black Thursday of 2020, Defi still holds a relative increase in TVL and a lot of exponential development has been added into the space:
Nov 2020 BTC price ~$18,000.00usd
Nov 2020 ETH price ~$500usd total (from TVL $14.8B)
OnChain Asset Management
All of competitors in the space also has happened
Solana new ecosystem based on Proof of History
- Consistent Network outages but remains
- Solana’s Sixth network outages
Rise and Fall of Terra Luna (death spiral of algorithm stable-coin)
- Lot of liquidations and retail investors lost their staked assets by being liquidated in less than a week
- Meteoric rise and crash of Terra Luna
Gaming sector was also targeted by security flaws:
Axie Infinity:
Axie Game after the ronin hack
New Bridge-Chain Innovation with lot of vulnerabilities:
Most recent one Harmony $100Million USD exploited (June 2022)
Harmony Twitter -100M hack Announcement
Interesting video of explaining the tracing of funds transfers ( https://youtu.be/pypJKbSV3jA )
Here are more examples of hacks and exploitation of vulnerabilities on DeFi in multiple chains
13 Biggest DeFi Hacks / April 2022
There are lot of hacks, assets stolen, most of the times recovered, fiasco in death-spiral algorithm and lot of FOMO from retail; however the main blockchain(s) stands even with many technical flaws that any protocol survive, and mostly developers will improve their code to close the loopholes. However there are many things to improve and unknown issues that will be appear in the future; And inside-traders, inside-coders are scary, skilled and fearless. From an investor standpoint still DefI is the wild west in finance and very risky with awesome technology, VC looking for juicy returns and it will take another 5 years to get a robust and secure DeFI.
Off Chain Management and Bailouts
Centralized Exchanges and Traditional Finance systems have been impacting the price of the crypto market to drop drastically during a recession and it’s until now that we know which VC ad investment company are beein impacted.
This off-chain investment are still using centralized private ledgers that are hard to track but its now during the start of the bear market that we see the domino effect:
Three Arrow Capital, Celsius and BlockFi
Three Arrow Capital may be insolvent impacting companies like BlockFi , Celsius
Hedge fund 3AC had positioned in UST and death spiral caused to lose majority of their capital .
Also the stETH (Lido) depegged from ETH causing, not only 3AC to fail but also Celsius
The other impacted lender is BlockFi insolvency; which one major hedge fund was A3C. it’s liquidation of assets on Terra impacted a whopping $400million USD dumped in staked ETH to pay its debt.
Either BlockFi and Celsius have impacted for small investors to get liquidated or not able to withdraw their staked tokens generating a lot of customers dissatisfaction and loss in value,
Aggregators and Applications on top of any L1 Blockchain are still a casino game where skyrocketing can allow anyone to feel rich but reality hits hard with crypto black swan events like Terra ponzi stablecoin
Grayscale Bitcoin has dropped to close a 37% price discount. It’s not certain that 3AC has ownership of BTC; but based on last SEC reports; 3AC owns 6% of GBTC shares and valued of $256Musd.
One last note is that 3AC could have huge margin position in different CEX : FTX, BITmex and probably not in a great position to hold it due to lack of liquidity to cover the position(s)
Nothing in crypto market is lost, is just there are few winners and lot of loosers. One of the big winners is the centralized exchange FTX which is in the opportunity to rescue crypto lender companies. Latest news is about FTX bailing out multiple DeCeFi like Celsius and BlockFI
A lot have change in the crypto space and new players are taking the lead in the Application and protocol layer: Prices are going up and down depending on the fear or bullishness in the market; however the there is lot of room for improvement in the Defi Stack; as it is the market is ruthless and merciless where there is high risk for Liquidity Pool Providers, Lenders and Aggregators. Nevertheless, DeFi is very risky for investors and we should proceed with caution. It may be better to build and contribute to improve the ecosystem but despite the premises of decentralization and transparency the Economy weight in crypto finance requires a better evolution for risk-management and force honest players in the Defi Stack.
How to protect retail investors for whale liquidations?
Is it fair to compete in disproportional percentage allocations?
Is there any regulation needed in the crypto space and what it should be?
Hi, aldrin! I know a company that does something similar to what you are talking about in the coffee plantations of some South American countries. The company opens funding rounds, farmers do not have to pay very high % to borrow money (even 100% interest) and those who participate in crowdfunding receive between 6-8% APY. An interesting way to win-win.
I leave you the link to their page in case you are interested to know more.
Unfortunately, no one expected that bitcoin would fall 3 times. For me, as a crypto trader, it was a shock. It’s good that I found an article Investor Junkie, that soon, the entire cryptocurrency will fall in price, and I was able to cash out all my money. However, I believe that even if I have a large amount of money, it needs to be invested somewhere. On the same site, I read an article about investing in stocks as always a 100% option. You need to invest in shares of large companies like Apple and Microsoft that will bring you profit in the future.
that’s great… however i don’t see too much of defi or blockchain adoption there. 