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This accident actually proves the exact contrary. Despite these obvious flaws, people are still using DeFi. There must be something of value in there that you'

by leppr 5y ago

This accident actually proves the exact contrary. Despite these obvious flaws, people are still using DeFi. There must be something of value in there that you're missing. And it's not speculation, as there are way better ways to speculate in crypto than by using DeFi (shittokens, NFTs, ...).

Lazare 5y ago
Lottery tickets aren't a good investment, but people still buy them. It's certainly true that there is activity in the DeFi space, and it's certainly possible that this activity is because DeFi is just so gosh darn amazing at solving people's need for basic financial products. ...at least in theory. But if you're going to make that rather extraordinary claim, I think you need to provide some extraordinary evidence.
- leppr 5y ago
  I'm disputing the logical conclusion from the facts at hand that no real problem is solved, not providing a value judgment about DeFi. It's not an extraordinary claim but common knowledge in the start-up investment land that when you see an ugly, flawed product get an unexplained amount of engagement, you become interested. > Lottery tickets aren't a good investment, but people still buy them. Lottery tickets solve the real problem of hopelessness about improving one's financial situation through work. It might not be a worthwhile investment in financial terms, but it has its use just like entertainment media or alcohol.
tschwimmer 5y ago
People inject heroin, drink liters of soda and gamble their life savings away too, but none of that is evidence that these are healthy or socially valuable activities. My explanation of the prevalence of DeFi is that it's currently at or near the peak of the hype cycle and there's a ton of money to be made either by trying to legitimatize the ecosystem or else via run of the mill pump and dumps.
roca 5y ago
"There must be something of value in these tulip bulbs because everyone is investing in them."
- leppr 5y ago
  Investing != using. https://cryptofees.info/ https://cryptofees.info/ People pay tens of millions of dollars everyday to use these on-chain platforms. They could avoid all those fees if they just wanted to speculate on token prices by using centralized exchanges, of which many have very lax KYC requirements.
  - roca 5y ago
    I don't have a breakdown of what people are using Ethereum for, but certainly a lot of those uses are stuff like NFTs, i.e. implementing other purely speculative assets. And there are lots of crypto startups using Ethereum, whose money is sourced from a different kind of speculation (er, "investment"). So again, it's not enough to just point at activity and say "look, real value!"
    - leppr 5y ago
      I don't disagree that the vast majority of the activity derives more or less indirectly from price speculation of some sort. But the thing to note is that so much of it is done on-chain instead of on centralized exchanges which have comparatively negligible fees. At the very least this proves the technologies themselves as suitable platforms for speculation (vs simply being the target of speculation). "Speculation platform" is already a big, legitimate and very popular use case (the importance, influence and appeal of Wall-Street in the US and the whole world is evidence of this).
      - roca 5y ago
        But how much of the "value" of the chain "as a platform for speculation" is simply the hype around crypto? (Which is, in large part, driven by speculation-driven rising prices of cryptocurrencies.) For example, anyone could have sold the equivalent of NFTs decades ago using a centralized ledger (perhaps using multiple trusted third parties for security). That didn't happen. Likewise, it's pretty clear that if you have a startup idea that could be implemented with or without crypto, you get a valuation boost if you take the crypto route. (Hello Long Blockchain Corp.) So: speculation-driven cryptocurrency prices rise -> entire crypto sector hyped to the moon -> startups move in to collect hype-driven investment -> smart contract activity observed -> this "proof" of utility drives more hype. And of course there are other intersecting loops.

by leppr 5y ago

Lazare 5y ago

Lottery tickets aren't a good investment, but people still buy them. It's certainly true that there is activity in the DeFi space, and it's certainly possible that this activity is because DeFi is just so gosh darn amazing at solving people's need for basic financial products. ...at least in theory. But if you're going to make that rather extraordinary claim, I think you need to provide some extraordinary evidence.

leppr 5y ago
I'm disputing the logical conclusion from the facts at hand that no real problem is solved, not providing a value judgment about DeFi. It's not an extraordinary claim but common knowledge in the start-up investment land that when you see an ugly, flawed product get an unexplained amount of engagement, you become interested. > Lottery tickets aren't a good investment, but people still buy them. Lottery tickets solve the real problem of hopelessness about improving one's financial situation through work. It might not be a worthwhile investment in financial terms, but it has its use just like entertainment media or alcohol.

tschwimmer 5y ago

People inject heroin, drink liters of soda and gamble their life savings away too, but none of that is evidence that these are healthy or socially valuable activities. My explanation of the prevalence of DeFi is that it's currently at or near the peak of the hype cycle and there's a ton of money to be made either by trying to legitimatize the ecosystem or else via run of the mill pump and dumps.

roca 5y ago

"There must be something of value in these tulip bulbs because everyone is investing in them."

leppr 5y ago
Investing != using. https://cryptofees.info/ https://cryptofees.info/ People pay tens of millions of dollars everyday to use these on-chain platforms. They could avoid all those fees if they just wanted to speculate on token prices by using centralized exchanges, of which many have very lax KYC requirements.
- roca 5y ago
  I don't have a breakdown of what people are using Ethereum for, but certainly a lot of those uses are stuff like NFTs, i.e. implementing other purely speculative assets. And there are lots of crypto startups using Ethereum, whose money is sourced from a different kind of speculation (er, "investment"). So again, it's not enough to just point at activity and say "look, real value!"
  - leppr 5y ago
    I don't disagree that the vast majority of the activity derives more or less indirectly from price speculation of some sort. But the thing to note is that so much of it is done on-chain instead of on centralized exchanges which have comparatively negligible fees. At the very least this proves the technologies themselves as suitable platforms for speculation (vs simply being the target of speculation). "Speculation platform" is already a big, legitimate and very popular use case (the importance, influence and appeal of Wall-Street in the US and the whole world is evidence of this).
    - roca 5y ago
      But how much of the "value" of the chain "as a platform for speculation" is simply the hype around crypto? (Which is, in large part, driven by speculation-driven rising prices of cryptocurrencies.) For example, anyone could have sold the equivalent of NFTs decades ago using a centralized ledger (perhaps using multiple trusted third parties for security). That didn't happen. Likewise, it's pretty clear that if you have a startup idea that could be implemented with or without crypto, you get a valuation boost if you take the crypto route. (Hello Long Blockchain Corp.) So: speculation-driven cryptocurrency prices rise -> entire crypto sector hyped to the moon -> startups move in to collect hype-driven investment -> smart contract activity observed -> this "proof" of utility drives more hype. And of course there are other intersecting loops.