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5) Well ok, but is it trading? Curve.fi has done nearly $100m in volume today, greater than Deribit and Bitfinex put together. Uniswap has traded $36m today. The majority of its total volume ever has come this month. 1inch is nearing $1b total historical volume

SBF

@SBF_FTX

Jul 19, 2020

6) OK, so people are locking value in DeFi, and trading volumes are up massively. Are valuations up? Well, duh. COMP, LEND, MKR and SNX each have higher mkt cap than any DeFi project used to, and combined fully diluted value is billions.

SBF

@SBF_FTX

Jul 19, 2020

7) So, ok, the numbers look pretty good--they all pretty strongly support explosive growth. So what's the counterargument?

SBF

@SBF_FTX

Jul 19, 2020

8) Well, one could point to the relative scale of those numbers. Sure, DeFi is approaching $1b of total historical volume. On a busy day in March, FTX traded over $5b. One exchange, in one day. And it wasn't the only one. All of DeFi ever still hasn't caught up.

SBF

@SBF_FTX

Jul 19, 2020

9) But, OK, still, DeFi is growing, right? I actually really like the anecdote that DeFi traded ~2x Bitfinex today. Bitfinex is famous of many things--most of all an anonymous enemy on Twitter (remember when bitfinex'd was a big thing?).

10) But ask

, and you'll hear a different set of things. Among them: a strong aversion to substance-free volume. Bitfinex fees are relatively high and they're proud of that because it means their volume is real and their trades really wanted their trades.

SBF

@SBF_FTX

Jul 19, 2020

11) In fact, Bitfinex has processed billions of dollars of fiat/stablecoin trades this year (creations/redemptions/USD deposits/withdrawals). But those don't show up in their 'volume', because they don't consider it to be real, substantial deltas changing hands.

SBF

@SBF_FTX

Jul 19, 2020

12) Sure, Bitfinex only traded $35m today. But it probably made around $50k on that (leo.bitfinex.com). DeFi exchanges traded $100m and had a revenue of..... $0. FTX also had similar stablecoin trading volume today to DeFi. But we also didn't count it.

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Replying to

and

Disagree that revenue was zero. For example, curve charges 4 bp / swap that goes to liquidity providers, so it generated the same order of magnitude of fees as bitfinex, ~$30k on $75mm volume.

Replying to

and

I don't super count it if it goes to LPs--a fee from takers to makers is the same as just changing the prices of trades by that amount. Net fees to a third party (exchange) not participating would represent actual gains from trade.

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Though either way it's only really interesting if the revenue is greater than the liquidity incentives, which it definitely isn't.

9:52 PM · Jul 19, 2020Twitter Web App

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Also very much disagree with the fact that it goes to Stakers / LPs means that it not real. It’s still value capture - even if it’s not what you are used to in traditional world / your CEX. The fact fees is not more than liquidity mining TODAY also doesn’t mean much.

Replying to

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Agree if it goes to Stakers. Disagree with LPs--they might just be MMing at a loss without that fee, so really it's just changing the trade price.