Thread by @ZeMariaMacedo

Crypto is a liquidity blackhole

Everyone I introduce to the space starts off with 0-10% of their net worth invested and ends up with >50%. Even their cash moves to stables

Other than aggressive regulation, I don’t see anything TradFi can do to reverse this trend

TradFi is a government sanctioned monopoly where:

- one entity (central bank) mints the cash
- a few government licensed entities (banks) intermediate the way this cash is distributed to individuals

Like all monopolies, it’s structurally inefficient

TradFi:

- Highest “risk-free” yield available to most people is <1%
- Riddled with frictions like KYC/AML, awful bank UXs and general lack of innovation
- Your money is custodied by bankrupt banks and seizable by insolvent governments
- Opaque

DeFi:

- High yields available
- Efficient
- Open & transparent
- Non-custodial

Result : DeFi swallows TradFi whole, voraciously sucking up financial and human capital

Now, I'm not a moonboi don't get me wrong. The current DeFi UX isn’t ready to swallow all of finance. Ethereum is too expensive, wallet UX is too shitty, and fiat on-ramps still suck

And yet, even the current incarnation of DeFi has sucked in $50B worth of value

DeFi will continue to evolve much quicker than anyone thinks possible because of open-source + composability, which makes innovation compound exponentially

Those of us who were here in 2017 can feel it. This is not 2017

We exponential nao

There will be drawdowns and volatility along the way as human nature means price inevitably gets ahead of fundamentals

You can try and time these or you can realize where the super-cycle is headed and just HODL

Use the extra energy to BUIDL instead