The China Ban Can't Stop New DeFi (tl;dr)

Transcript

crypto gaming is the next frontier coordination allows us to explode in all sorts of directions and is the china band bullish for defy all this and i'm luke and this is tldr where we catch you up on all the headlines and important narratives from around bankless this week as always there are going to be links down in the show notes so you can do a deeper dive into any of these topics now before we get started i want to shout out our sponsor xerion xerion's a big player in the dashboard crypto portfolio manager game but they're also rolling out a series of really cool nft related features this includes ways to flex like home screen widgets on your phone and apple watch faces and also more technical features like sending nfts between wallets and detailing nft's attributes if i had a

crypto punk i'd be showing it off at zerion dot io ariana simpson from a16z came on the podcast this week to discuss the absolute explosion that we've seen in crypto gaming since the start of d5 gaming has emerged as an obvious use case for crypto but it's been slower to arrive than other sectors for one game development takes a long time and it also requires scale so now that we're scaling with layer twos and side chains there's no surprise that gaming has seen a boom alongside it axiomfinity has had an outrageous year building an entire economy on top of its vibrant community this is a salient example of the concept of play to earn gaming has evolved substantially from the early days of going to a store and buying a disk or a cartridge or going to an arcade and currently we see a to win ecosystem

with microtransactions for skins on fortnite or your favorite player on 2k but with nfts crypto is leveling this up players can now own their in-game assets generating value for themselves and their community you know if you look at the history of crypto we've really spent the last few years building the core infrastructure that was necessary in order to start um enabling some of the more consumer facing and application layer experiences including games we've now reached a level of kind of functionality where we can build things on top and so i think the fact that um you know that's the point that we're at now is what's enabling a lot of these gaming and

entertainment experiences obviously first and foremost axi but the whole ecosystem around it too to really start to flourish crypto has always had a very high barrier to entry it can be a little bit daunting you have to be fairly technical um and gaming i think occupies a really unique space in the sense that it's allowing people who might otherwise say i don't know how i would get into this you know what's a transaction what's the hash what's either scan you know all these things to start playing around with it in a way that's a lot more approachable and fun frankly and so what we're seeing is that it's really opening

the floodgates for a whole universe of new crypto users once people come in start playing games see you know the fun the potential economic upside you know the communities like there's just so many positive things that can be found in these experiences as people play around with it um you know then they start to percolate out into other parts of the crypto ecosystem the growth of crypto gaming is a key pillar of the emerging metaverse and it will be really interesting to watch as high quality game studios continue to build on crypto rails gaming is just one example one fractal of what's happening in crypto right now this industry is taking off in all sorts of directions at a breakneck

pace and this is due to us leveling up our ability to coordinate that's what david talked to get coin founder kevin owaki about in this week's layer zero progress becomes exponential so basically every new money lego that gets added to the ethereum open source world means that there's a new possibility that i can build when i walk into a hackathon i like to say that you walk into an ethereum hackathon today and you can get enough software off the shelf to build something during the weekend as three hackers that some bank 10 years ago would have to have 100 people and 20 million dollars worth of budget to build with closed source because there's this exponential ability to just pull new legos off the shelf and every new lego creates a new permutation of something that can be

built and so i think we're going to see exponential this is this is why i think the open source financial system is going to be the closed source one is because progress is just exponential in it you can build things so much faster with with open source libraries than you ever were able to in the old financial system so that's what makes me almost certain that d5 is going to beat out tradify eventually evolution happens on a generational scale each time something iterates it has the chance to get better to improve to innovate and the internet is giving us the ability to iterate at a faster and faster clip this is exaggerated even more when we promote open source software building things that anybody can use and that right there as kevin puts it allows us to stand on the shoulders of giants when we

promote open source software we can more easily promote public goods and as time seems to be speeding up on us we are quickly launching ourselves into the next generation of society how it's all going to shake out is still a big mystery and it definitely depends on our priorities if we incentivize open source public goods and promote coordination and collaboration on an individual and collective scale and seek harmony with the world around us there is a good chance we can find ourselves on trajectory for a solar punk civilization and if we don't well blade runner and weaver vendetta are pretty cool movies on a more practical level our tactic this week covered fixed yield with barnbridge in dfi we're pretty used to seeing variable interest rates but fixed yield brings the stability and reliability that many investors want to

see barnbridge's smart yield system offers fixed-rate yield opportunities on your assets and is building out infrastructure for composability for both collateralizing their products and scaling to layer two solutions read the article to learn more about how to earn fixed yield and some of the other cool projects barnbridge is working on we also covered lira which is an options protocol that deployed natively to optimism's layer 2 rollup lyra lets you buy and sell options and also provide liquidity for those options now derivatives and defy have been tricky in general first because they're difficult to both price and scale but also because they're inherent risks to counterparties the liquidity providers lira uses synthetic spot markets to measure both price and volatility and the products here offer investors exposure to leverage hedging and income all of this

would be impossible without scaling and although derivatives can be tricky to understand options are extremely powerful financial instruments and it's definitely a level up for d5 also ben covered rory capital this week in the rgt token rari has been a blue chip in this new wave of defined native protocols we've seen emerging recently their fuse protocol creates isolated money markets which means there are fewer limits to how many different kinds of assets can be lended or borrowed rari is moving the direction of opening fuse to permissionless pool creation which could mean an explosion of new borrowing and lending markets paraphrasing ben rory could become the uniswap or sushi swap of money markets i'm personally really interested in this emerging sector of newer d5 products that rari finds itself right in the center of

they've partnered with protocols like olympus dow index co-op fey tocomac yearn and more what's good with the new d5 the last big narrative we covered is regulation in china and the u.s and there is a lot going on here there's regulation worries and there's also macroeconomic worries but for the same reason there may be cause to be bullish on the macro picture and bullish on regulation in market monday david talked about the infeasibility of regulating crypto if everything in crypto is a security and you want to regulate all of it well there has to be a trade-off somewhere you either have to change what you're willing to regulate or how you regulate it there's simply too much building going on to rule with the firm grip gary gensler talks about in state of the nation sahil bloom came on to talk about the evergreen scandal this chinese real

estate giant taking on gargantuan sums of debt and the current liquidity fallout although this pales in comparison to the 2008 crisis sahil describes us as the tip of the iceberg of the reckoning and credit looming before us this is all taking place amidst another china crypto ban but this time it seems a little more serious data sites like coin market cap are being blocked and exchanges like kobe are closing out accounts this has had the side effect of capital pouring out of centralized exchanges and into d5 i think everything is long-term bullish for crypto man i just think it's like the natural trend of progress and technology and society is where we are headed with these things and so i think that like these blips along the way these bands the different people that are going to try to take control it's

like trying to put you know a dam in front of a river that's moving it's just gonna find ways to pour around it and continue marching towards where it's ultimately going and we're going downstream progress is being made real technologies and applications are being built and you can't stop that in in such a simple way and so i um i continue to be just long-term bullish short-term who knows i mean governments do crazy things it causes price impacts i don't really have a view short term ever on things but long term the technologies are real they're here to stay and there's real useful high utility stuff being built which at the end of the day is what matters people want to be free and the more that nation states

tighten their grips the more people in their capital will flee to the amnesty of defy centralized exchanges can be stopped but stopping defy is a much greater challenge so with that i want to quickly shout out our sponsors gemiini lido ave and uniswap these are places where capital is fling as the credit bound nation states falter also this video wouldn't be possible without them so thanks a lot and finally none of this is financial advice eth is risky d5 is risky but we are headed west it's the frontier it's not for everyone but we are glad you are with us on the bankless journey see you next time hey we hope you enjoyed the video if you did head over to bankless hq right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence

we recommend joining our daily newsletter podcast and community as a bankless premium subscriber to get the most out of your bank list experience you'll get access to our market analysis our alpha leaks and exclusive content and even the bankless token for airdrops raffles and unlocks if you're interested in crypto the bankless community is where you want to be click the link in the description to become a bankless premium subscriber today also don't forget to subscribe to the channel for in-depth interviews with industry leaders ask me anythings and weekly rollups where we summarize the week in crypto and other fantastic content thanks everyone for watching and being on the journey as we build out the bankless nation