It's very tempting in the face of trading/speculation-driven growth to look at what's happening in DeFi lately and shrug it off as another manifestation of the 2017/18 ICO bubble.

This misses two really critical shifts in our understanding of crypto networks and tokens:
1) ICOs raised pre-launch on white papers full of vague ideas, with a big question mark around value accrual for their native tokens.

DeFi protocols are live, offer services that their users value, and their native tokens are capital assets with clear ability to capture value.
Solving value capture is a critical step in legitimizing tokens! It means you can value them using traditional valuation methods like discounting future cash flows. This easily increases the addressable investor audience by 10x, if not way more.
2) One of the key premises of the ICO boom -- that crypto assets could be used to bootstrap a network -- has now been validated by multiple non-Bitcoin networks.

This is a really big deal and is vastly under-appreciated.
Yes - many yield farmers may be short-term oriented. But some clearly aren't -- for example, the top 10 COMP voters include multiple application-level companies that are clearly invested in Compound's long-term success, and COMP is a key part of incentivizing and aligning them.
More importantly, DeFi protocols can evolve their incentive schemes to solve for long-term alignment. It's a vast design space, one that now has multiple early wins. Dismissing it over objections to a specific model misses the forest for the trees.
So where do these shifts lead?

It's impossible to say, but it looks like we're about to explore an ocean of new incentive schemes around open, blockchain-powered financial applications that want to build a new financial system for inclusion and meritocracy.
These new assets are a financial analyst's dream: disruptive, venture stage projects, with real-time balance sheets and income statements, that are beginning to trade on fundamentals and traction. Good research can deliver alpha.
In a somewhat circular manner, these protocols will initially serve each other. The first place assets will get listed will be a permissionless DEX. The first credit markets for them will be on permissionless lending desks.
However, even if fueled by trading/speculation in the early days, the result is a build-up of digital liquidity. As liquidity grows, more use cases will be unlocked.

Digital liquidity on open networks has massive utility --regardless of what people are using it for right now.
No doubt we'll see hacks and blowups that cause user losses. People should be careful when using DeFi protocols, and manage risk (for ex: insure yourself at @NexusMutual).

Nexus is emblematic of the ethos of this space -- if it's broken, it will find new ways to fix itself.
Finally, there's a silver lining to the risk: battle-testing in the wild with real money will, over time, result in hardened, more secure protocols. 2020 so far has been a step towards that.
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For a more detailed look, I wrote a post exploring this topic: https://medium.com/blockchain-capital-blog/entering-the-defi-token-era-820160f2fc1b
You can follow @_alekslarsen.
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