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23) And when their exchange token crashed, all the bullshit fell away and what FCoin had left was... nothing. Or, really, less than nothing. No volume, no valuation, and no assets. So how about BitMax, another exchange that lurked at the top of the fake volume leaderboards?

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24) Well I'd like to think that we played some part in this, although the truth is probably that it was going happen with our without us. They had successfully built up a significant userbase. And in 2019, BitMax turned off their transmining and fake volume.

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25) We were talking to them at the time, and said that we were only comfortable working with them if they cut out the transmining. They promised they were discontinuing anything that encouraged fake volume. We were skeptical. As it turns out, that skepticism was unwarranted.

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26) BitMax did, in fact, turn off their transmining, and the fake volume went away. And after doing that, they started to build. They launched more features, improved their tech, and listed projects.

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27) And one remarkable thing about BitMax is that it doesn’t just list random projects: it’s quietly started to list _good_ projects. Their projects have performed well, and it’s not all a “market making” mirage--that’s what happens when you choose good teams.

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28) And, on top of all of that--they’re really good to work with. We’ve had a long series of good interactions with them, and we’ve heard similar stories from others.

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29) The exchange started in many ways as a marketing ploy--which I guess is obvious from the name. But over the last year they’ve successfully combined the userbase they got with an increasingly great product.

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30) FCoin and BitMax both started out as large marketing plays--not unlike liquidity farming today. But they diverged after that; one went under while the other ended up as one of the better exchanges in the space.

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31) DeFi is now facing that choice. The growth so far has been almost entirely hot air and marketing bubbles. But the same could be said about Apple in some ways. And, obviously, Juicero. What will happen when the hype fades? What industry will we leave behind?

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32) DeFi Summer could burst, leaving an embarrassing mess behind. Or it could mark the beginning of the true decentralization of finance. To get there, we have to build good products, and leave behind a space we're proud of when the smoke and mirrors fade away.

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33) And to be clear, some of the current projects _are_ building out the space. Compound is a clean, functional product with cool use cases. Balancer extends Uniswap in an interesting way. Just because someone made a great marketing play doesn't mean there isn't substance.

9:43 PM · Jul 19, 2020Twitter Web App

Baptiste Vauthey

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Sadly, if the DeFi yield farming + very high valuations comes crashing down, I think it will leave a very bad taste in people's mouths, regardless of how cool the project is. One needs only to look at what happened after the 2017 pump and crash. Lots of people left crypto.

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Yeah that's a real worry. I think a controlled descent here is pretty important--slowly decreasing liquidity incentives until they get to more reasonable levels, etc.

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good thread! but this was shorter :P

Quote Tweet

asian exchanges: *giving out bonuses and rewards to users based on volume* eth plebs: "scam! fake volume! false marketing! centralized mess!" defi company: *does the same thing, attracts a fraction of the activity* eth plebs: "wow! such governance! decentralization!"

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☭ Anarabe ☭

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There is a DEFI hype that's clear. A growth important. However, this does not bring new users. The Ethereum ecosystem should open up to EOS. This will make it possible, thanks to Social dApps, to bring new users into the DEFI. Bitcoin - Ethereum - EOS - Cosmos = Game changer.

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☭ Anarabe ☭

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New users are coming to EOS on social and gaming dApps. They will use the DEFI on Ethereum to make loans in everyday life. They hold Bitcoin as a store of value. COSMOS will create bridges for all blockchains.

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How will mstable innovate beyond being a broken stablecoin exchange solely serving thirsty defi farmers? You just invested in it

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Absolutely love the insights you bring to DeFi. Excited Almeda has been very active in governance and looking forward to more in the future!

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Most defi trades are still constrained within Ethereum. Sometimes you want the real #btc and not the the fancy wrapped stuff

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