The design space for decentralized exchanges (DEXs) is expanding multi-dimensionally as the cost of blockspace falls, rollups and appchains proliferate, and solutions for interoperability improve. A thread on where some of the exciting innovation is happening. There are many dimensions for innovation in the DEX space. Below are 9 of the most promising along with just a sample of the teams working on each.

NFTs can grow to be a trillion-dollar market. To function smoothly at this scale, NFTs need deep, efficient debt markets. @variantfund is backing @NiftyApes, a powerful NFT-collateralized lending protocol, because we believe it can be a foundational primitive for the NFT market. 1/ @captnseagraves and @zherring are the right founders to build the next generation of NFT debt infrastructure. We’re incredibly excited about the benefits that NiftyApes will unlock for both borrowers and lenders.

0/ Your NFT bag is about to get much more liquid. Hundreds of millions of dollars will flow into NFT market making, and this will be a game changer for marketplaces, creators, collectors, and communities. Read on for more thoughts. 🧵 1/ The current state of the market: illiquid jpegs. BAYC turns over 5-10% of the collection in unit terms per month.

0/ We’re excited to announce that @variantfund co-led @MorphoLabs seed round. We believe Morpho can become the default gateway for borrowing and lending in DeFi. Read on to find out why! 🧵 1/ Morpho is a lending pool optimizer and aggregator that enables borrowers and lenders to enjoy better APYs through peer-to-peer (P2P) matching while benefiting from the depth of liquidity and familiar user experience of lending pools like Compound and Aave.

Variant is excited to back @eulerfinance, which is raising the bar for borrow-lend protocols on its path to becoming market leader. Euler’s design is full of innovations that benefit borrowers, lenders, and liquidators. One key: rethinking liquidations. Read on to learn more.🧵👇 2/ Euler’s liquidation approach benefits borrowers in two major ways. First, Euler implements “soft liquidations:” the positions of liquidated accounts are reduced just enough to bring them back to a healthy ratio of collateral to debt (initially 1.25).

0/ Thought I'd share a few things I've learned from >15 years of trading (including through the 2008 crisis). Short thread:

1) manage risk. if your book can't take another major decline in the market, you need to cut risk so that you can live to fight another day 1/
2) stick to your process. This matters most in tough tapes.
3) If you're not set up to trade volatile markets, don't be a hero. Instead take the time to do research and deploy capital when the market is suitable for your strategy

At Variant, we see a future where the market cap of decentralized stablecoins is in the trillions and are always interested in innovation in the space. Some quick thoughts 👇 1/ I’ve been thinking a bit about a framework for comparing stablecoins and identifying opportunities for design improvements.