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SBF
@SBF_FTX
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@SBF_FTX
13) Instead we classified them as deposits/withdrawals--depositing USDC and withdrawing TUSD, 1:1. Which, I guess, would correspond to infinite TLV on a stablecoin:stablecoin pool.
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SBF
@SBF_FTX
15) And how about the locked volume? Again, it's all stablecoins. Compound, the largets, is mostly people borrowing DAI from themselves; Curve is basically all stablecoins. Most of DeFi right now is people locking, trading, and lending stablecoins against each other.
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SBF
@SBF_FTX
16) Why? Well, because at this point any project with their salt has liquidity incentives. The total notional per day is around $1m (!!!). So people are buying, and selling, and borrowing, and lending, and locking their stablecoins for pay.
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SBF
@SBF_FTX
17) And where is that pay coming from? It's coming from the governance tokens, really. They're being airdropped on platform users. And all of a sudden they have huge valuations.
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SBF
@SBF_FTX
18) But you can't spend valuation. So really, the money that liquidity farmers make is coming from the people buying the governance tokens. And why are they buying those governance tokens at so much higher a valuation? Because their projects TLV is up.
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SBF
@SBF_FTX
19) So that's the whole cycle. Liquidity incentives --> TLV up --> valuation up --> larger incentives --> TLV up more --> ... It's a positive feedback cycle, starting out of nothing, creating billions of volume, locked assets, and valuation.
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SBF
@SBF_FTX
20) But it's not creating revenue, or value for users (outside of the price paid by governance token buyers, of course). It's the entire sub-industry. Out of nothing, it made something. Transmining. But, you know, decentralized.
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