The Faces of DeFi - The People Behind the Future of Finance Pt. 1
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The FTX collapse has many people in the crypto industry exploring the question “what if the exchange was decentralized?”. While the FTX situation unfortunately isn’t the only event this year that negatively affects the broader crypto industry, these events force the community to take a pause and think about what crypto was intended to create. If you look at the Bitcoin white paper, Satoshi Nakamoto writes “We have proposed a system for electronic transactions without relying on trust…To solve this, we proposed a peer-to-peer network using proof-of-work to record a public history of transactions that quickly becomes computationally impractical for an attacker to change if honest nodes control a majority of CPU power.” If the crypto community takes a step back to analyze the events that have had negative impacts on crypto, they tend to be a result of trusting a centralized entity.
Decentralized finance better known as DeFi directly uses the principles of Bitcoin by providing financial services in a trustless manner via smart contracts. These services include investing, yielding, trading and more. Many of these DeFi projects are permissionless which allows anyone to use the platforms. An example of how this is relevant is in the lending space which hasn’t been fair to everyone. For example, Wells Fargo is currently being sued because of alleged racial discrimination. In DeFi, permissionless platforms do not gate keep access to these financial services as users don’t have to worry about biases that would prevent them from receiving funds. From this example, the value of DeFi is recognizable, which is why the community should explore using these platforms.
One of the top DeFi platforms is Compound. Compound is designed to allow users to earn yield from their crypto and enables borrowing. Currently, Compound has over 2 billion dollars in collateral and 587 million dollars borrowed from the Compound protocol. Compound was founded by Robert Leshner and Geoffrey Hayes. Robert Leshner is the CEO of Compound and is a thought leader in the space as he has 116 thousand Twitter followers. As a partner of Robot Ventures, he has also invested in DeFi and Web3 companies like Optimism, Syndicate, and Lido. Robert has proven to be all in on DeFi and Compound has received trust from significant market leaders like Binance, Crypto.com, and Coinbase. By building Compound and investing in the space, access to fair financial services broadens from Robert’s contributions.
Uniswap is the top decentralized exchange (DEX) with a 4.5 billion dollar market cap. Recently, Uniswap has also ventured into the NFT Market as well by offering an aggregator based on the Genie acquisition which allows people to buy and sell NFTs across marketplaces. Uniswap was founded by Hayden Adams in 2017 after he read a Reddit post by Vitalik. Ironically, Hayden would build arguably the most important dApp on the protocol. Uniswap recently raised a round of funding of over 165 million dollars led by Polygon featuring investors like Paradigm, A16z, and Variant, demonstrating the need that the DEX fills in the market. Considering the contagion that has occurred in November of this year, it isn’t unreasonable to predict Uniswap will experience growth as more crypto investors look to shift their investment routine away from centralized exchanges. With this growth, more users will understand the power in having sovereign ownership of their finances.
Stani Kulechov is the founder of lending platform Aave and most recently, decentralized social media protocol, Lens. Aave is a decentralized liquidity protocol that enables its users to supply, stake, and borrow crypto assets. Developers can also build their own dApps on top of the Aave protocol. Aave has gained significant traction as there are currently 5.9 billion dollars of liquidity locked in Aave from 13 different markets including Ethereum, Avalanche, Optimism, and Arbitrum. Lens is a newer project but makes sense that Stani would pursue this opportunity. Stani is very active on Twitter, has over 218 thousand followers and even joked that he would be the next CEO of the platform. Lens is still in closed beta but has already won one of Decrypt’s Cryptie award for being the 2022 DeFi project of the year. By founding both Aave and Lens, Stani has the opportunity to integrate new features from Aave into Lens that will help creators monetize, and provide differentiated peer to peer finance interactions that current social media platforms lack.
DeFi leaders are crucial to the industry because they are building tools that embody the original ethos of Bitcoin. Robert, Hayden, and Stani have all built organizations that are core entities in the crypto ecosystem. They are building companies that also comprise of the essential actions required to perform in order to elevate financial well being and build wealth. Another commonality that these three builders share is they contribute to projects in a variety of verticals in the industry, through investing, building, or expanding product offerings. With the goal of scaling the entire industry it would be beneficial for there to be collective collaboration between these talented individuals. As discussed in this previous article, DAO to DAO Relationships: Describing Business Partnership Through a Web3 Lens, the web3 industry is not steered by competition. With this in mind, the opportunities for collective industry progression between these individuals are limitless.
Sources:
https://bitcoin.org/bitcoin.pdf
https://www.usatoday.com/story/money/2022/04/26/wells-fargo-being-sued-discriminating-against-black-borrowers/7451521001/
https://aave.com/
https://coinmarketcap.com/currencies/uniswap/
https://blockchain.news/news/aave-stani-kulechov-launches-social-media-platform-lens-protocol
Hey friends, thank you so much for reading this newsletter. Follow @cryptojeter on Twitter and reshare your favorite articles.
If you found extraordinary value from this article, you can show your support by sending a tip to CryptoJeter.eth (crypto wallet) or $CryptoJeter (cash app). I am really grateful for your support.
Opinions are my own!!!
About the Author:
Hey Friends! Thanks so much for checking out the Crypto Jeter newsletter. I’m Austin and I write this newsletter weekly to shine a light on emerging web3 startups and display the innovation and various evolutionary moments impacting the industry.
In 2017, during my sophomore year at Morehouse College, I bought my first fraction of a Bitcoin and have since been inspired by the financial access blockchain technology creates.
Over the last 5 years, I’ve built community and learned so much and am excited to share my thoughts with the crypto ecosystem
I truly enjoy meeting founders, investors, and contributors who are in the crypto space so please feel free to send me a DM on Twitter to @Cryptojeter if you’d like to chat.