Even when many events are happening that require people on CT to monitor the situation, we still found time to focus on the niche that matters to us: DeFi. It might not appear as exciting as prediction markets in this current moment, but don’t let that fool you.
A lot is happening, and to discuss where the space is at more in-depth, we invited speakers from Xerberus and DexTools to our X stage. You can listen to the recording here, or read on for an overview of what was discussed.
Speakers:
- Dom from Alvara
- Simon from Xerberus
- Wael from DexTools
On what excites speakers despite the recent bad vibes in crypto
According to Simon, there’s still a lot to be excited about in crypto, even as the crowd changes. While some bemoan that we’re becoming all corporate, he points out that this is just a result of us overindexing on [any] event.
What’s true, however, is that we’re seeing more risk-averse players enter who are not here for the next 1000x but are happy to earn $100 on their $1000 deployed. It’s a sign of maturation. Sure, the likes of Stripe and Robinhood are entering crypto, and they’re not real crypto-natives, but ultimately, this would trickle down to the rest of us.
The more people use stablecoins, the better for the ecosystem as a whole.
“Just because the weather is bad, we shouldn’t condemn the whole industry.”
Wael adds that trends come and go, but the main thesis persists. He admits to being a Bitcoin maxi whose strategy consists of selling altcoins and pouring all the gains back into “stacking sats” (not financial advice). AI is another trend to look out for, although speakers caution against trusting an AI agent with your life savings; still, many things can go wrong.
Nevertheless, it’s fun playing around with the tools, and who knows, eventually such agents could sit between the user and the market, helping traders better stick to their strategies, instead of fumbling the bag because of emotional overload.
Another growth area of crypto, despite the bearish sentiment have been perp DEXs — potentially, as Dom points out, because there’s always a market for people chasing quick gains.
Thoughts on prediction markets
They’re the elephant in the room; one cannot speak of crypto adoption these days without someone bringing them up. Even if it’s still not clear exactly what one should call what people do on these platforms.
Is it a bet? A trade?
According to Wael, at least speaking to prediction market teams, they’re staunchly opposed to it being labelled as a “bet”. Still, he’s decided to put money on Jesus not returning this year. Perhaps next.
Everyone agrees that the Kalshi/Polymarket duopoly is heating up, and both have very deep pockets, as shown by their marketing strategy, including hiring all the big voices on CT, and handing out free groceries in an expensive city (NYC).
There are opportunities for those looking to try new things or even build infrastructure around such markets. Nevertheless, the regulatory frame remains uncertain, and if recent backlash to certain predictions is anything to go by, not everything goes either.
The real value prop of crypto
One notion quickly lost in the bull market is what exactly crypto is good for beyond the number going up. Logically, the upside of downturns is to reinforce in those still here for the tech the real reason crypto will matter, regardless of economic sentiment. And that is the desire for a financial system that exists beyond the reach of governments.
Simon shares that when he speaks with family offices and asks why their clients are invested in crypto, the most common answer he receives is that they genuinely believe there is value in holding financial assets not tied to the government.
While crypto is its own cosmos, to reach more people, we cannot escape the need to work with TradFi. At the same time, we should be careful not to lose sight of the values that make crypto a viable alternative in the first place.
What’s interesting is that much of crypto’s early success can be directly attributed to learning from banking. Dom explains that we learned from the best: low float token launches closely mirror how IPOs work (except they’re not transparent), and many crypto businesses are establishing offices in the same places where TradFi goes for more creative finance.
The (non) sense of DAOs
ICYMI, there’s been a lot of drama around Aave recently, with main contributors leaving the protocol. Anyway, as such, we figured it’s worth discussing why DAOs are such a thing in DeFi.
Drama has somewhat become inherent in the context of DAOs, which isn’t surprising if you factor in that what they do is replace one middleman with 1000s.
Simon states that in his view most DAOs are confusing things and believe that everything needs to be voted on when that’s really not what they were about at all. To him, Bitcoin might be a great example of a DAO where each miner votes, and they all come to a consensus. It works autonomously and is decentralized, which isn’t really true for most other DAOs.
Speakers assume that one reason everyone still implemented DAOs during DeFi summer was to have a credible deflection mechanism the moment regulators knocked on the door. What speaks for this thesis is the number of DAOs currently shutting down (which, if they were truly decentralized and autonomous, shouldn’t even be possible).
What crypto has yet to figure out
Outside of the usual culprit, UX risk management is brought up. Another one is efficiency, which is lacking, and we’re still nowhere close to competing with web2 experiences.
It certainly doesn’t help that many of the people building crypto products haven’t worked on building for non-tech consumers before.
Thanks to everyone tuning in!