One of the most critical things you can do as an investor imo is not succumb to hindsight bias. So to that end, I definitely did not see this COMP launch playing out like this. Not even close. Here’s a few things I got wrong.
Didn’t anticipate the evolutionary governance token play. Launch with gov only and then let the token holders decide how to capture value. Genius in hindsight, not obvious until recently.
I’ve said for a while lending protocols will struggle to build moats. Switching costs are low and there are not many areas to build strong differentiation. This was so wrong.
I didn’t put a lot of assets into either of Compound or Aave for a long time but once I did I could feel the risk of smart contract issues viscerally. The longer you have a lot of value and survive the better and it will be hard to be run down. See Lendfme.
I didn’t see how you could build a strong community without a token to bootstrap it, but even then some kind of value capture was needed governance was not enough. I can see a very strong community emerging around COMP now given the wide range of people earning it.
I did not anticipate the impact to the funnel incentivised lending/borrowing would have. This is the biggest miss by far. I just doubled the amount of assets I have in compound, but it’s the new lenders flowing in over the next weeks and months that will really make a difference.
10m supply. This was another miss, the impact of earning something worth $10’s of dollars vs cents is palpable here.
Overall my takeaway is do not underestimate a strong team in DeFi. I’ve been a big supporter of compound for a while now, but I still massively underestimated them!
Congratulations @rleshner & @compoundfinance on taking back the 2nd slot on defipulse as well. It wouldn’t surprise me to see compound at #1 soon and I would have said at the start of the year that was 1% chance.
