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DeFi’s user base needs to be decentralized, says the former managing director of ConsenSys

July 31, 2020

In a webinar organized by Kraken entitled “Reduction expectations: The future of the Ethereum” (his English name is “DeFi-ing expectations” and does a little pun on DeFi), The invited panelists discussed the emergence of decentralized funding, its defining characteristics and the measurement of its success.

The webinar took place on July 31 and was attended by The best known influencers of the DeFi ecosystem are Anthony Sassano, co-founder of EthHub.io, Ryan Sean Adams, founder of Mythos Capital, Andrew Keys, managing partner of Darma Capital and former managing director of ConsenSys, and William Mougayar, one of the first investors in Ethereum and former advisor to the Ethereum Foundation.

Pete Rizzo, Kraken’s general editor moderated the panel, often ask somewhat provocative questions about the nature of the DeFi movement.

Metrics and decentralization

DeFi’s user base needs to be decentralized, says the former managing director of ConsenSysDeFi’s user base needs to be decentralized, says the former managing director of ConsenSys

One of the questions raised on the metric of the total locked value, ask with Rizzo Why is it important and what is its usefulness?

Sassano made a short introduction noting that it was first popularized by the statistics website DefiPulse to measure how much Ethereum is blocked in the logs, with the result that it would not add to the selling pressure.

“It’s a very primitive view,” he said. Sassano said the metric had recently been checked. because this value can easily be taken from the networks.

A possible improvement would be a chain cash flow metric that measures how much money flows through logs in a given period of time. Market manipulation (laundry trade) could continue to be used to reinforce this metric, he warned, especially if the protocol does not charge commissions. “Every metric we want to assign is incomplete due to the design of the systems.” completed.

Keys suggested another metric:

“What interests me most is the Gini coefficient. I want millions of people to borrow $ 100 instead of one person borrowing $ 1 million. […] I think that’s an important metric for ecosystem growth, so we don’t have one […] an economy of 1% (versus) again 99%. “

This poses a major problem with the highly charged nature of today’s DeFi ecosystem. For example, 30 wallets do more than 70% of the activities on platforms like Compound, according to the data from, DappRadar.

Keys argued that too The Gini coefficient is an important component for measuring decentralization.

“We have to decentralize the user base. The smaller the amount of money, the better.”

However, Sassano noted that, given the current cost of gas commissions on Ethereum, it’s not very practical to start small in the DeFi room.

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