Thread by @ogiberstein

Crypto and DeFi are gamifying and connecting innovation across finance, community building, art and governance in so many ways at such breakneck speed that it is hard to follow and distinguish between value and madness.

Enter @templedao

🧵 A Thread (Value or Madness?)

1) When seeing videos of people burning things as part of the #fireritual for @templedao, I got ... curious?

Bootstrapping in DeFi is not just community building, it is cult building. Some, like @OlympusDAO, @AlchemixFi, @iearnfinance and @SushiSwap have done a great job.

2) Others have gone the traditional VC route and raised rounds (@Uniswap).

But as in everything, saturation sets in. There can only be ONE @OlympusDAO community and so on.

To stand out, you must do something truly special.

@templedao: Hold my incense stick

3) The gamification and ritualisation starts already in the process. Create a game for users that requires experimentation and involvement to gain entry. Pretty much everyone starts with the same chance. Create FOMO and hype (the videos) but backed by a genuinely interesting...

4) .. product proposition. All built effectively within a 'game' where each member is a cult member in the temple.

Needless to say, the meme game, art and story-telling is top-notch. Standards are very high if you want to stand out with something like that in DeFi these days...

5) So let's summarise the community/cult bootstrapping side: a carefully executed beautiful strategy to make it fun, exclusive, effectively a treasure-hunt together with big brain people to form a powerful and committed community early on always with the potential...

6) to make huge gains.

That's the carrot hanging off the DeFi wagon and why so many people are in this space. Cults are fun but cults that can be financially rewarding if you bet on the right horse combine all the sweet spots for us Degens. Needless to say, the @templedao...

7) ..community are true stand-out degens in a space full of degens. The Priesthood of Degenerates and the Temple of Apes all in one❤️

So what is the value proposition of @templedao you may ask? Ponzis without product are just a ponzi. Luckily, @templedao seems to be a...

8) product-led Ponzi with some fascinating elements of innovation.

So apart from interesting treasury mechanics around its $TEMPLE token, what purpose does @templedao actually try to achieve?

9) First of all, $TEMPLE is being designed to be a safe haven against volatility.

The treasury management innovation that @OlympusDAO has brought to DeFi is immense and can be found here once again.

The economics behind $TEMPLE are deliberately designed to basically 'suck out'

10) volatility from the token. High staking rewards will encourage traders to seek refuge in the temple to weather the storm outside.

Meanwhile, the treasury generates more stable returns to benefit stakers.

I would argue this is more similar to 'private Centralbanks' ...

11) and hardly comparable to anything we know in the TradFi world. Again, somewhat similar conceptually to @OlympusDAO [@templedao is NOT a fork though]. Another comparison would be to a 'low-volatility' hedge fund with certain lock-in mechanics around joining/leaving managed...

12) through a governance token. So combine some cult-building vibes, token design innovation and financial experimentation and you arrive at the Temple.

If @OlympusDAO is the future algo-stable coin of DeFi, @templedao could be the @Wealthfront style robo-advisor since it will

13) offer pools with different strategies for different risk-appetites later on.

Another way of putting this: @templedao is a competitor to @iearnfinance which simplifies yield-farming while @templedao simplifies more traditional long/short strategies.

There is no ETA on this

14) I have deliberately not gone into any of the token mechanics as they are well explained on Medium and by big brains like @korpi87 here:

https://twitter.com/korpi87/status/1441901618866245634?s=20

15) Another great explanatory thread by @Priyansh053:

https://twitter.com/Priyansh053/status/1442134278544838658?s=20

Generally I'd argue there's a correlation between good explanatory threads created by community members and a project's success, another reason to be interested...

16) Now what are some risks? Like always in DeFi there are plenty!

First, cult building is a volatile endeavour. What starts off with positive vibes could quickly turn nasty. You want FOMO but you don't want TOO much of it. By restricting access through the Fire Ritual...

17) $TEMPLE will hopefully be held by a sufficiently large committed following but without excluding the masses who 'didn't make it'.

I had missed out on @OlympusDAO Discord sale by a day but never felt like I wasn't able to be part of the community.

18) Let's see how @templedao will handle the 'insiders' vs 'outsiders' dynamic!

Of course there are many technical and economic risks. If I understand correctly, @templedao's treasury will be investing options/futures to achieve a less volatile portfolio (@ribbonfinance?)

19) These are fairly new primitives in DeFi and for sure there are economic and Smart Contract risks a-plenty. My main concern, also for @OlympusDAO, is whether 'Risk-free Value' or Intrinsic Value for $TEMPLE is actually as safe as we think [could treasury be drained?]...

20) But these are risks that early adopters take into account in return for outsized potential returns.

@templedao certainly sounds like quite an interesting new take on volatility and risk-management in DeFi and I can't wait to see how it will play out.