I hope you enjoyed this, I had to put together something substantial to culminate my thoughts, and make up for my absence. If you have any questions or fail to grasp any of the aforementioned concepts, google is your friend  For those who would like to read this in its entirety here is the entire writeup on google docs. https://docs.google.com/document/d/1ibtQPfwGIGzaoEcoJ9R5v_h7aQuvrDwVLTd0xYipxJo/edit?usp=sharing

22/22

This All Sounds Great, So When Bottom Ser? - It's tough to tell. I think we are within striking distance of a meaningful bottom. Maybe we have another 20-30% of downside to go, but that pales in comparison to the asymmetric risk reward of what's to come for DeFi in the next decade. We are likely to consolidate for a period of time, before emerging into the next stage of the DeFi bull run. But expecting DeFi tokens to ultimately go to 0 like a lot of people - well, that's just plain silly.

21/22

The Embedded DeFi Thesis - DeFi is not going away, in fact it is much more likely to be "embedded" in all of crypto you use going forward. That piece of metaverse land you want to rent. The short term USDC loan you need against your $500k BAYC. The Axie NFTs you want to trade for a new video game bundle NFT. That will all happen via DeFi primitives. NFTs, GameFi, and DeFi will compound into one over time. They will each be each others biggest use case.

20/22

This is Not Just an Ethereum DeFi Love Story - Yes, I believe in censorship resistance from state attacks and max decentralization. I don't like blockchains that can be turned on and off either. But even with L2 season, the demand for financial application compute will outstrip that which Ethereum itself can provide. Alt Layer-1s such as solana, Terra, Algorand, Cosmos will play an important role, especially in application specific use cases. Some primitives need to be even cheaper and faster than what ETH 2.0 + Layer 2 can provide.

19/22

The Identity and Compliance Layer - Whether you agree or disagree with KYC and AML, it indisputable that DeFi needs some sort of identity layer for institutional scale capital to participate. This does not have to be gross! We have the technology and capability today to make identity and compliance in DeFi decentralized and zero-knowledge proof based. At minimum, we need to verify participants aren't on a sanctions list. This unlocks another $100tn+ of eligible DeFi participation...

18/22

Bringing real world assets into DeFi will also lower overall correlation risk of assets backing these novel systems, thereby lowering total systemic risk. Plus, we will finally be tethered to real world economic activity, and not only be self-referential.

17/22

DeFi That Has a Real World Impact - Real world assets are anything physical that can be represented on-chain. Real estate, invoices, or even Spotify payments represent trillions of dollars of untapped assets for DeFi, that also bring faster and cheaper capital to SMEs.

16/22

Layer 2 Scaling Will Unleash New DeFi Primitives - We now have 6+ Layer 2 scaling solutions fully in production and operational. We can now begin to imagine the possibilities of a high throughput, composable, and scalable DeFi architecture. Low cost, streaming payments and machine-to-machine payments through SuperfluidHQ. Decentralized perpetuals and options on dydx protocol that rival FTX on speed and performance. Log-in to a website via your ETH wallet and unlock walled content via UnlockProtocol to pay-per-article.

15/22

This Missing Pieces to Blow the 🚪s Wide Open - Overcollateralized lending, automated market makers, stablecoins, and synthetic assets (the core primitives of DeFi 1.0) got us sprinting out the starting gate. Protocol controlled revenue and advanced tokenomics (ponzi-nomics?) of DeFi 2.0 took us one lap around the track before we fully tripped over ourselves. We didn't need more embedded leverage. What we really needed was scalability, real-world asset connectivity, and an identity layer for DeFi.

14/22

Stop it, GL with your Worthless Governance Tokens - For many reasons, DeFi protocols couldn't turn on protocol fees out the gate. We’ve still got TradFi making 5 - 25% across financial products, I’ll venture to say that with established brands, DeFi protocols will be able to turn on protocol fees of 5 - 50bps at scale. At worst, DeFi token holders have the option value to control tens of billions of dollars of DeFi Treasuries. Those worthless DeFi governance tokens may not be so worthless after-all.

13/22