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Jul 21, 2020

1) My second post on The State of Defi: Trust, Centralization, and Usability. (For the first post, see here: twitter.com/SBF_Alameda/st)

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2) As before: a) Some others know DeFi better than I b) I don't know the future, I'm just guessing c) Not investment advice d) In the end value is in the eye of the beholder. It doesn't matter what I think, it matters what you all think.

8:15 PM · Jul 25, 2020Twitter Web App

3) There are some things we can't really control, and there are some parts of us that just are, no matter what we do. This thread is not about those. This is about what we choose to make of what we have.

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4) This story ends in DeFi, but it starts at a centralized exchange in 2016. One of the strongest and most influential forces in crypto is disloyal employees. This might be obvious to some, but it was shocking to me at first. It no longer is.

5) I've had the undeserved privileged of never hating my boss. I lucked out with my parents, and after graduating my first boss was one of the people I admire most in the world. And the last few years--well, I guess I've had my moments of disappointment in our CEO :P

6) But a lot of people I know _do_ hate their boss, and feel as much loyalty to those who have helped them without any incentives as they do with the company that mostly just gets in their way. Most places in crypto are like this. Most, but not Bitfinex.

7) Say what you will with Bitfinex--they have one of the best teams in the industry. The entire c-suite is devoted and sincere, and the whole company can tell. They don't get out too much--Bitfinex does way less marketing than comparable exchanges (and way more tech).

8) They have some fire in their eyes, and I've wondered sometimes whether it was forged in the depths of 2016 as they fought through their shitstorm. They keep going, and keep building, and work extremely hard (I'm sure we've woken them up more times than they can count).

9) Anyway their dedication stands out because most teams don't have it. Instead most have about as much drive as you'd expect when you send a market order for 500 more employees, settling tomorrow. The newer employees just don't really have that much agency at their job.

10) And as the younger employees grow frustrated, the core team starts to slow down. The company becomes "corporate". Missions change--not to market demand, but to whatever you can still do with a large, unweidly group that's torn between being bored and tired.

11) And it shows. Most projects have bugs they never bother fixing because they just don't really care, and hard but rewarding pathways that "aren't a good fit for their strategic vision". Sometimes they die out. But sometimes they make a lot of money. Such is life.

12) Nothing in the above paragraphs sounds like DeFi. Say what you will about YFI--it's _definitely_ not slow or boring or corporate. It's new and exciting and scary and weird and rough around the edges. DeFi is glowing with enthusiasm right now.

13) But a lot of it doesn't really feel to me like Paolo staying up late to finish processing transactions for the day. It feels more like 2017, and it actually feels surprising that the mascot for Yield Farming isn't Doge.

14) There's optimism. But it's easy to be excited when money is falling out of the sky, in this case almost literally. Everyone was proud of crypto in 2017. And now everyone's proud of their yield and their bags. But just as 2017 ended so will the DeFi Summer.

15) What will remain-and endure-will be in some ways frustratingly random. But in others it will make total sense. True yield can be a business model, but inflation isn't, and most of the current growth of DeFi traces back to buying usage of your platform by giving away tokens.

16) Some of those will be around for a while but most will die off as soon as they stop giving away their tokens for marketing--or as soon as people stop paying for them. And what will be left, more often than not, are the teams gave it everything.

17) I've written a fair bit about Compound. Partially it's because COMP is hot! But also I've known some of the team for a while. And for more years than most projects last, they've been grinding. And it shows.

18) For one thing, they know their shit. But also their platform speaks of a vision and drive to build a damn good product. Who knows how much value the governance will bring in the end, but it's implemented beautifully, cleanly, and powerfully.

19) Which is important, because the truth is that it takes about 2 weeks to build a functional DeFi borrow-lending platform. The fact that they have one, and minted an ERC20 token, and were around for the DeFi explosion, doesn't really say much about them. The details do.

20) I don't know how Compound will evolve. Maybe it will die out for another platform with more Yield. I would be sad. But sometimes that's how the world works. Or maybe they will keep grinding, and keep reaching further, and be the project people admire.

21) I'm not going to shit on any particular projects here. The truth is most of my targets have done quite well for themselves this year! Joke's on me, I guess. But most projects in DeFi are stupid. They're half-assed and overconfident and lack much real utility.

22) Anyway, people often tell me that I need to slow down, and rest more, and make sure to maintain work life balance. I smile and nod, because I think it (usually) comes from genuine care and worry. I draw that fire away from my colleagues, but the truth is many are as guilty.

23) It's 3:40am as I write this, and I'm not the only one here. Slack pings, machines beep, keys clack, and we keep moving forward. I know I've stressed out lots of coworkers; you can see it in their eyes sometimes as they fight to stay awake until they finish their project.

24) Facebook pings, and unlike Slack it gets ignored. That can wait. Anyway, I smile and nod, and say I'll try to catch up on sleep soon, but I know I won't. Nishad sits next to me, eyes blurry; he can't go to sleep until we list a new market. If he stays up for it, so will I.

25) But more than that, I don't _want_ to slow down. Because the truth is that sometimes those sayings about moderation and just doing your fair share are bullshit. There's always more you can do, and usually more is better, whether it's more features or more stability.

26) And for most of the people I’m fortunate enough to work with, this isn’t just a job, a thing you do to buy food and shelter. It’s our goal and our passion, or at least a stop along that path.

27) We want to bring it as far as it can go, and we want to do it right. Otherwise there’s no way anyone would wake up at 3am for a phone call, or settle balances from their bed before turning it.

28) And there’s now way Gary would have gotten on a plane across the country for a company that didn’t exist yet if ‘good enough’ were the goal. Sometimes we see that in another project, and hope we can find a way to be on the same side.

29) They might not make it. But they’ve given themselves a fighting shot, and more than that they’ve given themselves a chance to do more than just ‘well enough’. It happens, now and then. It happened when we talked with Swipe, and felt like ‘oh, yeah, they really care'.

30) It happened when we talked with Transfero, and when QCP took us out to dinner the first time we met them. It’s happened sometimes in DeFi, too, but not as much as it should.

31) And that’s a Big Deal, because right now DeFi has a lot of hype. It has a huge opening. It’s future will depend on what it makes of that. Because if the space never gets faster or more powerful or better designed, it will go the way of 2017.