Unlocking Opportunities in the Ever-Evolving DeFi Landscape
DeFi remains an enduring area of interest for us, and unlike many others, it has already proven its product-market fit. The past few years have witnessed a surge in yield farming and overcollateralization, with the fundamental sectors of on-chain swapping, money markets, decentralized stablecoins, and derivatives being already well-established by strong players with substantial track records and impressive lindy effects.
However, we anticipate upcoming innovations and the potential resurgence of older concepts that may now find their moment in the spotlight. If you possess a genuinely superior approach, rather than just minor adjustments to existing settings, we would certainly be intrigued. Otherwise, it appears that major projects in the sector are merely compounding their positions.
For better or worse, we view blockchain infrastructure as not only a catalyst for digital property rights but also as a driving force behind the overarching trend of hyper-financialization across all domains, ultimately fostering the creation of capital markets that do not exist today. We find it particularly exciting when new markets can be unlocked through the utilization of crypto rails, and we are eager to explore your innovative ideas in this regard.
A glimpse of what we are most excited about:
The origins of Prediction Markets can be traced back to Augur, the first Ethereum ICO, though it never gained widespread popularity. In recent times, they've fallen out of the spotlight, but Polymarket has managed to thrive and grow its userbase. In a world rife with misinformation and psyops, prediction markets are emerging as a reliable tool for gaining a clearer view of reality.
In the context of sports, rather than relying on experts' opinions to determine the favorite for an upcoming game, we often turn to the game's odds. We're witnessing a similar shift in various industries, where opinions are increasingly shaped by probabilities, seen as a more accurate reflection of reality. This trend extends beyond the realm of crypto speculation and is gaining traction in diverse communities.
Although Polymarket initially started as a versatile option, it now has the potential to establish itself as a prominent player in a specialized market, with room for growth. Looking ahead to 2024, we're particularly excited about opportunities related to the US elections, which we believe will thrust this topic back into the mainstream. However, we anticipate a similar evolution to sports betting, not only in politics but also across a wide range of online communities.
In the realm of crypto, our approach to equity and tokens often appears unconventional. While Bitcoin (BTC) and Ethereum (ETH) can be likened to programmable commodities or money, governance tokens tend to resemble "programmable" equity. There may exist a tradeoff between the qualities of a commodity and equity, but the prevailing direction for many applications should be to acknowledge the rights typically associated with equity holders. Some protocols have already ventured into revenue-sharing arrangements, pursuing the right to dividends.
Our interest lies in a protocol capable of lending or selling governance voting rights attached to a token, thus creating a non-voting derivative. Much like how you can lock and trade your "right of dividend" for a predetermined duration on platforms like Pendle Finance, we envision a marketplace for trading voting power.
Token holders should have the flexibility to convert their tokens into non-voting shares on demand. Governance may only hold significance for specific actors in particular circumstances. Hence, we aim to empower holders primarily interested in a protocol's cash flow to either lease this function for compensation or hold a derivative traded at a discount while relinquishing governance rights.
Decentralized fundraising and launchpads have long been standout products within the crypto sector. Following the ICO craze, regulatory challenges made public fundraising onerous, enabling venture capitalists to consolidate their position. We hold a strong appreciation for Fjord Foundry, formerly known as Copper Launch, which conducts sales utilizing programmable Dutch Auctions to circumvent issues like frontrunning.
We envision a protocol featuring a programmable price curve that mirrors the user-friendly experience of platforms like Coinlist while ensuring KYC-compliant sales.
The reading above provides just a taste of what currently excites us the most. But that doesn't mean we're not open to other sectors and venture ideas. If you're building something in this particular sector that you are extremely passionate about, don't hesitate to apply. We can’t wait to hear from you!