4 ms·

I think DeFi was an interesting idea with some potential. It seems like nobody was able to come up with a solution that found widespread use, but with the right

I think DeFi was an interesting idea with some potential. It seems like nobody was able to come up with a solution that found widespread use, but with the right application it might have worked. But for now, it looks like that window of opportunity is gone. Maybe with the next crypto generation...

lottin 4y ago
The problem with DeFi is that can't be used for financing. Financing requires seizable assets whereas blockchain assets are intrinsically unseizable. It can still be used for things like swaps, but that market isn't very large.
- bidirectional 4y ago
  Swaps aren't very large? It's very easily a trillion-dollar market even without the misleading quoting of notional as market size.
  - lottin 4y ago
    Where does this number come from?
    - bidirectional 4y ago
      Here's one source: https://www.bis.org/publ/otc_hy2111.htm https://www.bis.org/publ/otc_hy2111.htm Reports notional as in the hundreds of trillions and market value over ten trillion. Unless I'm misreading you and you're talking about defi swaps? Though surely the analagous tradfi market shows the potential there.
      - lottin 4y ago
        These are credit default swaps. I don't know if they are implementable as smart contracts (I don't think so, but I could be wrong). I was thinking about overcolateralised DeFi loans which can be seen as a kind of swap where two parties exchange the returns of two different assets.
- tjansen 4y ago
  You could create seizable assets if you find a way to create a legal framework that allows you to hold and transfer physical or intellectual property via NFTs. If you could own the copyright to an ape picture, instead of an NFT with the URL to an ape picture, it could be actually worth something. Trading physical property as NFTs would create a lot of possible applications. I always thought that trading-property-as-NFTs and the insurance market would be the most interesting applications for DeFi.
  - politician 4y ago
    If stocks and bonds were allowed to be traded as digital NFT-like contracts than true settlement could be completed in ~minutes rather than ~days.
seunosewa 4y ago
What was the best application of defi in your view?

lottin 4y ago

The problem with DeFi is that can't be used for financing. Financing requires seizable assets whereas blockchain assets are intrinsically unseizable. It can still be used for things like swaps, but that market isn't very large.

bidirectional 4y ago
Swaps aren't very large? It's very easily a trillion-dollar market even without the misleading quoting of notional as market size.
- lottin 4y ago
  Where does this number come from?
  - bidirectional 4y ago
    Here's one source: https://www.bis.org/publ/otc_hy2111.htm https://www.bis.org/publ/otc_hy2111.htm Reports notional as in the hundreds of trillions and market value over ten trillion. Unless I'm misreading you and you're talking about defi swaps? Though surely the analagous tradfi market shows the potential there.
    - lottin 4y ago
      These are credit default swaps. I don't know if they are implementable as smart contracts (I don't think so, but I could be wrong). I was thinking about overcolateralised DeFi loans which can be seen as a kind of swap where two parties exchange the returns of two different assets.
tjansen 4y ago
You could create seizable assets if you find a way to create a legal framework that allows you to hold and transfer physical or intellectual property via NFTs. If you could own the copyright to an ape picture, instead of an NFT with the URL to an ape picture, it could be actually worth something. Trading physical property as NFTs would create a lot of possible applications. I always thought that trading-property-as-NFTs and the insurance market would be the most interesting applications for DeFi.
- politician 4y ago
  If stocks and bonds were allowed to be traded as digital NFT-like contracts than true settlement could be completed in ~minutes rather than ~days.

seunosewa 4y ago

What was the best application of defi in your view?