kain.eth Profile picture
27 Oct, 18 tweets, 4 min read
Here is part 2 due to 25 tweet limit on threads 😓.
When was the last time we hit a 50m+ install base of a transformational platform? It was 2010. Here is the first three years of iPhones sales.
Instgram, Uber and other Apps that launched as the iPhone install base scaled were able to tap into this new platform to grow at phenomenal rates.
What does that have to do with DeFi? DeFi is not really user facing, it feels like it is because we’ve relied exclusively on enthusiasts since 2018. But the average user is more likely to interact with DeFi as infrastructure via a mobile wallet in the future not directly.
Now let’s pull all these threads together. The intersection of NFTs and culture will drive massive user growth over the next few years. But there is an still an unsolved issue holding us back. Scaling.
The Ethereum ecosystem is scaling but this year has been slower than many people expected. But by early next year we will have multiple production ready layer twos, combine this with ETH2.0 progress and Ethereum will be able to handle 50m+ users next year.
Once all these conditions are met we will begin to see apps that leverage the DeFi infrastructure we have built over the last few years to provide 10x user experience for financial products by aggregating and improving the overall UX.
Unfortunately, no matter how much we might wish it DeFi itself is not capable of driving user growth alone. It is too niche. But once we have millions of people who get Ethereum UX patterns, we will be able to transition these users to a far better financial system.
Like the rise of the App Store it is impossible to predict what shape this will take, but when you combine a transformational technology with a huge user base amazing things happen.
Crypto UX seems weird now, but so did email once (the crypto boomers will understand) new user behaviours take time to train but eventually they go from weird to common knowledge. The concept and power of self-custody will become part of our culture in the next decade.
To the point where most people forget it was ever weird in the first place. But the key is you need something to drive this, NFTs are the killer app for crypto and will drive adoption for the foreseeable future. NFTs are still super early, the design space is huge.
DeFi will undoubtedlybe the financials rails of future. It is simply too efficient compared to TradFi and no amount of regulation is going to slow this down. Especially when you have tens of millions of users adopting new apps that leverage DeFi rails. The Uber effect.
The volumes we see across even the most popular DeFi protocols right now are trivial compared to what is coming. We have a tiny niche audience of enthusiasts currently, but DeFi will conquer the world, it will just do it in stealth mode.
What does this mean for DeFi tokens? The way I see it playing out is you will have small number protocol contributors who hold tokens, then you will have enthusiasts who also hold tokens and then you will have a huge user base that just want to consume services not govern them.
The revenue these DeFi protocols generate will be enormous, so you will also have a group of people who simply want exposure to the asset class without having to govern it. Staking services and other forms of passive exposure will expand their user bases drastically.
At scale DeFi tokens that generate cash flow will be primarily priced based on these cash flows rather than on almost complete speculation about future growth, as they are now. The dominant protocols will have valuations many multiples higher than today.
The future is going to be built on open protocols, this will lead to a massive increase in market efficiency. Lower barriers to entry for startups will allow for rapid progress once we have a large enough install base. This will create a positive feedback loop.
The end state is a world where most infrastructure runs on Ethereum. The dominant protocols will capture an insane amount of value, but they will do so by being open, transparent and composable. wagmi.

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More from @kaiynne

27 Oct
As promised, a thread on where DeFi goes next and why DeFi summer was not the zenith. I’m feeling particularly self-indulgent so this is going to be a long thread.
Original tweet I am responding to is here.
It is irrefutable that every og DeFi token has been rekt against ETH in the last year, in hindsight this really shouldn’t be surprising. During DeFi summer the blue chip projects were not just the dominant ETH narrative they were the only narrative.
Read 25 tweets
8 Aug
I’ve been thinking a lot lately about the intersection of DeFi, NFTs, art and gaming lately. Putting my current thoughts into a thread…
The first thing I want to highlight is the difference between attention and impact. Many things that garner high attention are not impactful, think the latest marvel movie. While many things that are high impact get minimal attention, think novel mathematical proofs.
As excited as we have all been about DeFi the reality is that it falls into the category of finance, which is typically high impact but low attention. The one offsetting factor being that speculative manias are often high attention. As are market implosions.
Read 12 tweets
22 Jun
One month later, checking in. Balance of probabilities definitely shifting towards bear market, but I don’t think we have confirmation yet.
In late May we were in -40% now -50%+, the further we go the more unusual this would be in historical terms as a bull market correction. But this is already historically a weird bull market.
A few points that really stand out and may have head faked the OG’s. I will mainly focus on BTC here. The biggest imo is the ATH->ATH ratio.
’11 ->’13 ratio ~30x
’13 -> ’17 ratio ~20x
’17 -> ’21 ratio ~3x 🤯
Read 13 tweets
28 Apr
Something I’m a little concerned about given the recent interactions I’ve had with the BSC and SOL communities is that they seem to be genuinely gaining organic traction. Much more so than say EOS or Tron last cycle. I have some thoughts about this…
Firstly Solana is pretty clearly an upgrade on the previous generation of ETH killers. Primarily because they have managed to hide the scaling trade-offs much more effectively.
The likelihood of EOS devolving into plutocracy was called out by many people including Vitalik pretty early on, but obviously the reality was even worse than most people including myself expected. And it was fairly easy to point out where they had forsaken decentralisation.
Read 13 tweets
1 Feb
Now that sXAG (silver) markets are live I want to provide some context on the situation for those who have not been living in the Synthetix discord for the last few years.
Firstly, sXAG is a Synthetic ERC-20 (lives on Ethereum) silver token that tracks the price of silver via this @chainlink oracle: data.chain.link/xag-usd.
This allows anyone in DeFi to get price exposure to silver without needing a traditional brokerage account or paying crazy spreads on bullion. Synthetix also supports sXAU (gold) and sOIL (Brent Crude Oil) as well as a number of forex currencies like GBP and AUD.
Read 20 tweets
19 Jan
It appears that “you are just a VC project” might become this cycle’s “no token, no ICO” both of these statements are just counterproductive virtue signalling imo. The no token mantra alone probably set us all back 18 months due to overcorrecting for ICO scams.
I said many times through 2018 and 2019 you actually want scams and other fuckery, not having them is a sign of underinvestment, which is far worse than the alternative.
The market can solve these problems and it clearly has already to a large extent, deal structures are now much clearer and incentive aligned than they were in 2017. Does that mean we won’t see vaporware raise tons of money this cycle? Of course not! But again that’s a good sign.
Read 13 tweets

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