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DeFi projects that are not *directly* interoperable with Ethereum and it's mature markets are pretty unlikely to see adoption. There's simply no point, liquidity is king.
However, other non-DeFi use cases will start to migrate unless L2 starts seeing significant traction soon.
However, other non-DeFi use cases will start to migrate unless L2 starts seeing significant traction soon.
This is a problem for Ethereum for a couple reasons.
1. Ethereum has a significant cultural moat
Since Ethereum was the first real smart contract platform, it has significant stickiness as the platform of experimentation for new ideas. That leads to new ideas and new use cases.
1. Ethereum has a significant cultural moat
Since Ethereum was the first real smart contract platform, it has significant stickiness as the platform of experimentation for new ideas. That leads to new ideas and new use cases.
Because of this experimental attitude,
2. Ethereum has very mature development tooling
Since new ideas and use cases are created on Ethereum, that leads to new tooling and approaches for how ideas are *created* in the first place. Developer tooling is Ethereum's second moat.
2. Ethereum has very mature development tooling
Since new ideas and use cases are created on Ethereum, that leads to new tooling and approaches for how ideas are *created* in the first place. Developer tooling is Ethereum's second moat.
This is extremely important.
The easier it is to *conduct* experiments on Ethereum, the more experiments it will see. Experiments turn into valuable projects, with valuable assets created, leading to the final moat
3. Ethereum has the largest variety of valuable assets
The easier it is to *conduct* experiments on Ethereum, the more experiments it will see. Experiments turn into valuable projects, with valuable assets created, leading to the final moat
3. Ethereum has the largest variety of valuable assets
This is a 2nd order effect of how culturally significant and developer friendly Ethereum has been so far. More experiments => better tooling => more valuable assets.
DeFi needs valuable assets to survive. If there aren't a significant enough share of assets on Ethereum, it dies.
DeFi needs valuable assets to survive. If there aren't a significant enough share of assets on Ethereum, it dies.
DeFi is a sticky narrative, but it's not enough to live by itself. If there aren't valuable assets with significant and justified monetary premium above their on-paper value, the entire house of cards collapses (just like regular finance!)
Eventually, DeFi-only strangles itself.
Eventually, DeFi-only strangles itself.
So, it's important we coddle and support non-financial use cases on Ethereum, if we want to continue to see Ethereum as a breeding ground for new ideas, better tooling, building a valuable economy overall, that DeFi can leverage to create value for future growth.
Growth is good.
Growth is good.
This is my reasoning for why I don't really care about other chains trying to capitalize on the whole #DeFi trend. Real DeFi goes naturally hand in hand with organic growth and cultural significance of the platform.
Speculation only gets you so far. https://twitter.com/ErikVoorhees/status/1297956558513594376?s=20
Speculation only gets you so far. https://twitter.com/ErikVoorhees/status/1297956558513594376?s=20
