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>being thrown around a technology that is dodgy at best I have yet to meet someone that says this who has foreseen the implications of defi. In my mind, as an

>being thrown around a technology that is dodgy at best I have yet to meet someone that says this who has foreseen the implications of defi. In my mind, as an early bitcoiner, that was the original promise of bitcoin. A list of coins by market cap is full of absolute junk: https://www.coingecko.com/en https://www.coingecko.com/en A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity. There's a huge difference between the two worlds. Don't confuse dogecoin's "I like the stonk" hype with Maker's muscle. The "blockchain" isn't the point. The systems made possible on top were always the point, and that's what makes "blockchain" so valuable.

TechBro8615 5y ago
FYI, but this is HN, so you might like to know that "enormity" has a specific meaning with negative connotation, it's not just a way to describe something as "really big," (enormous) but rather "really evil."
- staticautomatic 5y ago
  It’s bizarre that this is being downvoted. I wouldn’t call it “really evil” but the negative connotation is legit. See...any dictionary.
  - deleted 5y ago
    [deleted]
  - Udik 5y ago
    (in neutral use) large size or scale. "I began to get a sense of the enormity of the task"
    - staticautomatic 5y ago
      Is that a quote from a dictionary or what?
      - Udik 5y ago
        Yep, Ofxord Languages (the one provided by google) https://languages.oup.com/google-dictionary-en/ https://languages.oup.com/google-dictionary-en/
        staticautomatic 5y ago
        And when I Google “define enormity” I get “ noun 1. the great or extreme scale, seriousness, or extent of something perceived as bad or morally wrong. "a thorough search disclosed the full enormity of the crime" 2. a grave crime or sin. "the enormities of the regime" “
        Udik 5y ago
        Just click on "translations and more definitions" at the bottom.
- creata 5y ago
  > Although enormity has been used since the late 1700s to denote large size, this usage continues to be disparaged by various language commentators who argue that enormity should be reserved for senses related to "great wickedness." It is enormousness, they insist (a hefty and considerably less common word), that should be used in reference to great size, despite the fact that, like enormity, it too originally was used to denote wickedness or divergence from accepted moral standards. For better or worse, this proscription has been widely ignored by many English speakers, including professional writers. — https://www.merriam-webster.com/dictionary/enormity https://www.merriam-webster.com/dictionary/enormity It's not as clear as you're making it out to be.
teh_infallible 5y ago
^^ You would think a group of engineers and founders would see that, and yet HN remains stubbornly, irrationally anti-crypto.
- deleted 5y ago
  [deleted]
- Yizahi 5y ago
  Ask yourself a question - why is that? What is the reason for this phenomenon? Why does a group of comparatively (to other public forums) competent engineers from different fields are skeptical about crypto"currencies"? Do they they have an ulterior motive? Maybe they are secretly shorting everything in crypto? And if not, then maybe they can be listened to? :)
fossuser 5y ago
Agreed - the DeFi tech is really interesting: https://medium.com/dragonfly-research/what-explains-the-rise-of-amms-7d008af1c399 https://medium.com/dragonfly-research/what-explains-the-rise... There's a lot of snake oil speculative no knowledge spam from people that easily give off a bullshit vibe. So I get that a lot on HN that haven't closely looked at it would be turned off by that and just dismiss it entirely out of hand. There's some real stuff going on here too and it's worth a deeper look - I think the knee-jerk dismissal is a mistake. At this point over ten years in, it's worth at least taking a deeper look at even if (I'd argue especially if) you're a skeptic. I also suspect there's some pseudo-intellectual skepticism cynicism as signaling going on like there always is. Specifically on BTC: https://www.matthuang.com/bitcoin_for_the_open_minded_skeptic https://www.matthuang.com/bitcoin_for_the_open_minded_skepti...
gpvos 5y ago
defi = decentralized finance, https://en.wikipedia.org/wiki/Decentralized_finance https://en.wikipedia.org/wiki/Decentralized_finance
monkeydust 5y ago
I have to agree aside from the nonsense coins there is something going on about Defi that makes me think it could rewrite a lot of capital markets. The beauty of it is that it's all software, no middle, back office teams running reports and reconciliation processes.
- mustafa_pasi 5y ago
  It's not all software though. There must be an office somewhere where any actual real world assets are somehow linked to tokens. This is what puzzles me. When you add that one office, you loose the decentralization aspect and then what's the point of it all?
  - programmarchy 5y ago
    Yes there must be interfaces with the real world. The classic example is a “tooth fairy” insurance policy where a smart contract yields a coin if the user loses a tooth. How do you verify “proof of tooth”? This is where the concept of an oracle comes in. Chainlink is attempting to provide a decentralized, tamper-proof oracle network for smart contacts so if you want to know about the cutting edge look at what they’re publishing.
    - jerry1979 5y ago
      Do Chainlink oracles offer any kind of benefits over Discreet Log Contracts like the ones we see on Suredbits[0]? [0] https://oracle.suredbits.com/ https://oracle.suredbits.com/
    - monkeydust 5y ago
      But are you not then putting your faith into a central party (Chainlink) even if they apply some level of decentralization as to how they say publish a price level?
ignoramous 5y ago
> "I like the stonk" hype with Maker's muscle. Some of the tech in the web3 space is so genuinely interesting [0]. And defi's evolution has been nothing short of rapid. It is kind of sad that crypto-currency related topics don't invite as much positive attention and technical discussion on HN. [0] Especially, XaaS apps on top of Ethereum v2, Cosmos, and Polkadot.
- piva00 5y ago
  I suspect because as many others here my time is limited. Given the amount of scams, misinformation, hype-fueled marketing talk, it's hard to parse information on the crypto-space and so I'm completely put off by it. Don't take me bad, I believe there are innovations happening there that we will see the results on the mainstream on the next 10 years, it's just too much of an effort for just a curiosity from my side. I keep up with articles shared here on HN as I believe it acts as a curation and filtering tool but I can't keep up with the rate of fads, new technologies, scams and dead technologies on the crypto-space, it's simply exhausting.
eMGm4D0zgUAVXc7 5y ago
I'm pro-crypto-currency but I don't understand this, explanation follows: > A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity. The top ones are all lending and exchanges. Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway! And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist. So they can't really be used as a pro-crypto argument like you're doing because then the solution you're arguing for would only need to exist to solve a problem which it has created itself. So what is so revolutionary about these?
- Slartie 5y ago
  > and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway! That's why all this "lending" is a joke anyway. They lend you less than your collateral. If you want to "borrow" 1 BTC, for example, you need to first have the value of x BTC (with x being something larger than 1) in the form of some other crypto as a collateral and lock that up somehow. So if I want to borrow 1000$, I first need to provide 1000€ and then hope the $/€ rate doesn't come too close to 1:1, because at that point my borrowing position is liquidated and I end up having paid interest for borrowing money I already had in the first place. If that sounds ridiculous, that's because it is. Lending needs trust and is thus inherently incompatible with trustless cryptocurrencies.
  - tim333 5y ago
    It's more like borrowing a few k against your house to buy stuff. It has its uses.
    - Slartie 5y ago
      Its only "use" is to artificially inflate the total crypto market cap by effectively providing another source of leverage to crypto coin traders. And no, it is not at all like borrowing against your house. You can live in a house, even if you secure a loan with it. If living in your house is your primary use case for your house, which is the case for a lot of people, that's totally fine. You cannot "live" inside of your BTC. They are a token of value that is effectively useless to you if you cannot do the only thing that you can possibly do with a token of value: spend it for something else you desire to have.
graeme 5y ago
> I have yet to meet someone that says this who has foreseen the implications of defi. Can you give a use case that isn’t intra crypto speculation? That seems to be what Defi consists of at present. Ultimately finance serves to help with capital allocation and production in the real economy. So: is Defi helping the real economy do things it couldn’t do before? Or, is there a plausible use case for this in formation? Please be specific. A lot of people seem enthused by this, but no one has been able to explain it in a way that shows the use.
- tim333 5y ago
  Not sure if this counts or not. I've got a friend who bought ETH which went up, borrows USDC against it which then swap for fiat money, which he's then investing in a music/bar business. Similar to buy a house, it goes up, mortgage it to invest in business.
- tarsinge 5y ago
  Oracles bring the possibility to interface with the real world. For example to track underlying assets like equities, oil, gold... You can these use DeFi services like borrowing with that asset portfolio.
  - graeme 5y ago
    Thanks, just looked into Chainlink. That actually looks interesting. Is it being used for any real world applications yet?
norswap 5y ago
The top 7 on Defi Pulse (1) are currency exchanges ("liquidity pools") and overcollateralized loans, which are mostly used by speculators to get leverage. Useful, I guess. But enormous — only in monetary terms. I believe crypto & blockchain technologies have a future. But we ain't there yet. (1) and I suspect more than that, those are just those I'm familiar with.
- graeme 5y ago
  What do you think that future is? I’m curious, since you believe it in but also are able to see that most of Defi by volume is just speculation. I’d be interested to hear to pro-Crypto case.
  - norswap 5y ago
    Barring original developments, simply replacing the existing financial infrastructure — replacing the middlemen by smart contracts and decentralized organizations. This is less costly to build (in terms of infrastructure and paperwork) and much more flexible. Also, anybody with a good idea or use case can enter the space. Companies that could be replaced/rebuilt on the block chain include Visa, stock exchanges (NYSE, CBOE), Swift, Stripe, ... The blockchain also feels like the natural progression of a process of digitalization and increased transparencies. For many proposed uses, you don't actually need a blockchain, but it turns out to be the easier choice anyway. Let's make up an example: say we didn't have a way to track containers (the kind that travel on ships) - it would be much easier to set it up on the blockchain as an Ethereum NFT than spinning the required infrastructure. The blockchain also comes with governance cookie-cutter solutions. In the real world, you'd need to set up or contract a company to run the servers — who owns this company or who does it contracts to? The blockchain solution is easier to set up and probably easier to sell once the technology becomes more accepted. Another way to look at this is that the blockchain makes it easier to set up real-world APIs which enables not only to track things (recorded on the blockchain, a secure ledger) but also to perform real world actions (e.g. orders) that involve real-world financial values. Central to that is the ability to represent physical assets on the blockchain (e.g. our containers for before - you trust that the blockchain is an accurate representation of reality because you trust the transactions signed by container companies). Note that this vision is in a certain sense quite boring. Nothing really fundamental changes for the common man, though he may end up benefiting from the resulting innovations.

TechBro8615 5y ago

FYI, but this is HN, so you might like to know that "enormity" has a specific meaning with negative connotation, it's not just a way to describe something as "really big," (enormous) but rather "really evil."

staticautomatic 5y ago
It’s bizarre that this is being downvoted. I wouldn’t call it “really evil” but the negative connotation is legit. See...any dictionary.
- deleted 5y ago
  [deleted]
- Udik 5y ago
  (in neutral use) large size or scale. "I began to get a sense of the enormity of the task"
  - staticautomatic 5y ago
    Is that a quote from a dictionary or what?
    - Udik 5y ago
      Yep, Ofxord Languages (the one provided by google) https://languages.oup.com/google-dictionary-en/ https://languages.oup.com/google-dictionary-en/
      - staticautomatic 5y ago
        And when I Google “define enormity” I get “ noun 1. the great or extreme scale, seriousness, or extent of something perceived as bad or morally wrong. "a thorough search disclosed the full enormity of the crime" 2. a grave crime or sin. "the enormities of the regime" “
        Udik 5y ago
        Just click on "translations and more definitions" at the bottom.
creata 5y ago
> Although enormity has been used since the late 1700s to denote large size, this usage continues to be disparaged by various language commentators who argue that enormity should be reserved for senses related to "great wickedness." It is enormousness, they insist (a hefty and considerably less common word), that should be used in reference to great size, despite the fact that, like enormity, it too originally was used to denote wickedness or divergence from accepted moral standards. For better or worse, this proscription has been widely ignored by many English speakers, including professional writers. — https://www.merriam-webster.com/dictionary/enormity https://www.merriam-webster.com/dictionary/enormity It's not as clear as you're making it out to be.

teh_infallible 5y ago

^^ You would think a group of engineers and founders would see that, and yet HN remains stubbornly, irrationally anti-crypto.

deleted 5y ago
[deleted]
Yizahi 5y ago
Ask yourself a question - why is that? What is the reason for this phenomenon? Why does a group of comparatively (to other public forums) competent engineers from different fields are skeptical about crypto"currencies"? Do they they have an ulterior motive? Maybe they are secretly shorting everything in crypto? And if not, then maybe they can be listened to? :)

fossuser 5y ago

Agreed - the DeFi tech is really interesting: https://medium.com/dragonfly-research/what-explains-the-rise-of-amms-7d008af1c399 https://medium.com/dragonfly-research/what-explains-the-rise... There's a lot of snake oil speculative no knowledge spam from people that easily give off a bullshit vibe. So I get that a lot on HN that haven't closely looked at it would be turned off by that and just dismiss it entirely out of hand. There's some real stuff going on here too and it's worth a deeper look - I think the knee-jerk dismissal is a mistake. At this point over ten years in, it's worth at least taking a deeper look at even if (I'd argue especially if) you're a skeptic. I also suspect there's some pseudo-intellectual skepticism cynicism as signaling going on like there always is. Specifically on BTC: https://www.matthuang.com/bitcoin_for_the_open_minded_skeptic https://www.matthuang.com/bitcoin_for_the_open_minded_skepti...

gpvos 5y ago

defi = decentralized finance, https://en.wikipedia.org/wiki/Decentralized_finance https://en.wikipedia.org/wiki/Decentralized_finance

monkeydust 5y ago

I have to agree aside from the nonsense coins there is something going on about Defi that makes me think it could rewrite a lot of capital markets. The beauty of it is that it's all software, no middle, back office teams running reports and reconciliation processes.

mustafa_pasi 5y ago
It's not all software though. There must be an office somewhere where any actual real world assets are somehow linked to tokens. This is what puzzles me. When you add that one office, you loose the decentralization aspect and then what's the point of it all?
- programmarchy 5y ago
  Yes there must be interfaces with the real world. The classic example is a “tooth fairy” insurance policy where a smart contract yields a coin if the user loses a tooth. How do you verify “proof of tooth”? This is where the concept of an oracle comes in. Chainlink is attempting to provide a decentralized, tamper-proof oracle network for smart contacts so if you want to know about the cutting edge look at what they’re publishing.
  - jerry1979 5y ago
    Do Chainlink oracles offer any kind of benefits over Discreet Log Contracts like the ones we see on Suredbits[0]? [0] https://oracle.suredbits.com/ https://oracle.suredbits.com/
  - monkeydust 5y ago
    But are you not then putting your faith into a central party (Chainlink) even if they apply some level of decentralization as to how they say publish a price level?

ignoramous 5y ago

> "I like the stonk" hype with Maker's muscle. Some of the tech in the web3 space is so genuinely interesting [0]. And defi's evolution has been nothing short of rapid. It is kind of sad that crypto-currency related topics don't invite as much positive attention and technical discussion on HN. [0] Especially, XaaS apps on top of Ethereum v2, Cosmos, and Polkadot.

piva00 5y ago
I suspect because as many others here my time is limited. Given the amount of scams, misinformation, hype-fueled marketing talk, it's hard to parse information on the crypto-space and so I'm completely put off by it. Don't take me bad, I believe there are innovations happening there that we will see the results on the mainstream on the next 10 years, it's just too much of an effort for just a curiosity from my side. I keep up with articles shared here on HN as I believe it acts as a curation and filtering tool but I can't keep up with the rate of fads, new technologies, scams and dead technologies on the crypto-space, it's simply exhausting.

eMGm4D0zgUAVXc7 5y ago

I'm pro-crypto-currency but I don't understand this, explanation follows: > A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity. The top ones are all lending and exchanges. Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway! And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist. So they can't really be used as a pro-crypto argument like you're doing because then the solution you're arguing for would only need to exist to solve a problem which it has created itself. So what is so revolutionary about these?

Slartie 5y ago
> and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway! That's why all this "lending" is a joke anyway. They lend you less than your collateral. If you want to "borrow" 1 BTC, for example, you need to first have the value of x BTC (with x being something larger than 1) in the form of some other crypto as a collateral and lock that up somehow. So if I want to borrow 1000$, I first need to provide 1000€ and then hope the $/€ rate doesn't come too close to 1:1, because at that point my borrowing position is liquidated and I end up having paid interest for borrowing money I already had in the first place. If that sounds ridiculous, that's because it is. Lending needs trust and is thus inherently incompatible with trustless cryptocurrencies.
- tim333 5y ago
  It's more like borrowing a few k against your house to buy stuff. It has its uses.
  - Slartie 5y ago
    Its only "use" is to artificially inflate the total crypto market cap by effectively providing another source of leverage to crypto coin traders. And no, it is not at all like borrowing against your house. You can live in a house, even if you secure a loan with it. If living in your house is your primary use case for your house, which is the case for a lot of people, that's totally fine. You cannot "live" inside of your BTC. They are a token of value that is effectively useless to you if you cannot do the only thing that you can possibly do with a token of value: spend it for something else you desire to have.

graeme 5y ago

> I have yet to meet someone that says this who has foreseen the implications of defi. Can you give a use case that isn’t intra crypto speculation? That seems to be what Defi consists of at present. Ultimately finance serves to help with capital allocation and production in the real economy. So: is Defi helping the real economy do things it couldn’t do before? Or, is there a plausible use case for this in formation? Please be specific. A lot of people seem enthused by this, but no one has been able to explain it in a way that shows the use.

tim333 5y ago
Not sure if this counts or not. I've got a friend who bought ETH which went up, borrows USDC against it which then swap for fiat money, which he's then investing in a music/bar business. Similar to buy a house, it goes up, mortgage it to invest in business.
tarsinge 5y ago
Oracles bring the possibility to interface with the real world. For example to track underlying assets like equities, oil, gold... You can these use DeFi services like borrowing with that asset portfolio.
- graeme 5y ago
  Thanks, just looked into Chainlink. That actually looks interesting. Is it being used for any real world applications yet?

norswap 5y ago

The top 7 on Defi Pulse (1) are currency exchanges ("liquidity pools") and overcollateralized loans, which are mostly used by speculators to get leverage. Useful, I guess. But enormous — only in monetary terms. I believe crypto & blockchain technologies have a future. But we ain't there yet. (1) and I suspect more than that, those are just those I'm familiar with.

graeme 5y ago
What do you think that future is? I’m curious, since you believe it in but also are able to see that most of Defi by volume is just speculation. I’d be interested to hear to pro-Crypto case.
- norswap 5y ago
  Barring original developments, simply replacing the existing financial infrastructure — replacing the middlemen by smart contracts and decentralized organizations. This is less costly to build (in terms of infrastructure and paperwork) and much more flexible. Also, anybody with a good idea or use case can enter the space. Companies that could be replaced/rebuilt on the block chain include Visa, stock exchanges (NYSE, CBOE), Swift, Stripe, ... The blockchain also feels like the natural progression of a process of digitalization and increased transparencies. For many proposed uses, you don't actually need a blockchain, but it turns out to be the easier choice anyway. Let's make up an example: say we didn't have a way to track containers (the kind that travel on ships) - it would be much easier to set it up on the blockchain as an Ethereum NFT than spinning the required infrastructure. The blockchain also comes with governance cookie-cutter solutions. In the real world, you'd need to set up or contract a company to run the servers — who owns this company or who does it contracts to? The blockchain solution is easier to set up and probably easier to sell once the technology becomes more accepted. Another way to look at this is that the blockchain makes it easier to set up real-world APIs which enables not only to track things (recorded on the blockchain, a secure ledger) but also to perform real world actions (e.g. orders) that involve real-world financial values. Central to that is the ability to represent physical assets on the blockchain (e.g. our containers for before - you trust that the blockchain is an accurate representation of reality because you trust the transactions signed by container companies). Note that this vision is in a certain sense quite boring. Nothing really fundamental changes for the common man, though he may end up benefiting from the resulting innovations.