Session 11 – DeFi in the Wild: Fair Distribution and Accessibility Panel with with Mariano Conti of YFI, Marc Zeller from Aave, Joe Gerber from IDEO Notes by 4NTS Note: These are notes taken from the talk itself. They are subject to reporting or copying errors. Any reprinting should go back and quote the video itself directly. Mariano Conti - https://twitter.com/nanexcool Ex Head of Smart Contracts at Maker Foundation, yield farming enthusiast. Joe Gerber - https://twitter.com/joe_gerber_ VC at IDEO Ventures, one of the founders of FairLaunch Capital Marc Zeller - https://twitter.com/lemiscate Working at Aave as one of the integration leads Yalor: “What is the definition of fair?” Joe: “For those who haven’t heard, we launched an experiment called Fair Launch Capital. Our key idea was “How do we create a crypto-native way of fair funding of projects?” And so, the question of what is fair is what we were thinking about a lot. For a lot of people, project being fair means that is it 100% community-owned and the ownerships is liquidity-mined, and this is an interesting and powerful mechanism, which enables fairness but isn’t inherently fair. One thing we know is that fair is very contextual, and the original intent is to create a fairly governed community”. Mariano: “I’ve heard the word fair so many times and we can see from release of YFI everybody thought it was fair. However, it was still a whale’s game. Is it fair for whom? Is it fair because it is distributed far and wide? Is it fair that the team that spent years building something has to rely on the community? There are so many nuances to fairness. We got the influx of meme coins and food coins, which I don’t count in all this, but I am intrigued to see where do we go with all this.” Marc: “We have no fucking idea about this concept. I recently worked influencing the whales, and in the end of the day whales are not THAT influential in DeFi, because they have the same voting mechanisms as other people in DeFi. Therefore you see the democratization of portfolios in the spaces. If your portfolio is too small, you can’t do anything because of the fees, and if your portfolio is too big, you can’t do anything because you will crash the price with the amount of coins you have, therefore you have to land in that sweet spot in the middle.” Mariano: “I wanted to ask you because Fair Launch already announced their first project. How did you decide on it? I think you got a ton of applications” Joe: “We announced this week that Marqet is going to be our first project. They are doing margin trading on top of Aave and Synthetix. We were blown away by the amount of people that provided support and had shown their interest in Fair Launch capital. We wanted to find founders that wanted to be pioneers for the Fair Launch path. That requires a lot of risk-taking and boldness from the founders part. We wanted to demonstrate that fair launch is not just a fork of existing protocol and giving away all of the ownership through liquidity mining. As we start designing the distribution for this, we want to show that liquidity mining is one way of rewarding distribution. There are glimmers of other ways that value is measured or rewarded.” Yalor: “Interesting thing that I saw was Aavegachi, and I like the memeability of the project. I really like their way of rewarding value.” Marc: “With YAM, you didn’t even have to provide the liquidity, just deposit some tokens. At least in Uniswap, you are providing liquidity to the largest DEX in the world. We are trying to do the same with Aave, where you provide liquidity and get the fees. I think that this is a fair relationship.” Yalor: “These mechanisms that we are creating and experimenting with now are very innovative. For example, Uniswap dropped more funds to its users than US government dropped to its citizens in a form of a citizen check. If more projects and organizations will start doing this, it will be an engine of funding more individuals of doing things inside the DeFi ecosystem. What do you guys think?” Mariano: “Let me say first that I was gushing over UNI airdrop. There are a lot of stories about UNI airdrop changing lives for them. For some of the people in Argentina it was a year’s worth of salary. I don’t even know where I was going with this *laughs*” Yalor: “The interesting thing is that if you get in a liquidity pool, you get rewarded no matter where you are or where are you from. It’s heartwarming” Joe: “This shows the power of DeFi and it’s power to change the world. A USDT stablecoin in an environment with inflation is a gamechanger. People all over the world have new and different opportunities. The second interesting thing is that Uniswap dropped the coin retroactively. This means that the people that were using the product because they liked it and not because they thought that they would be rewarded. And that seems very fair to me. I think more project should follow that path and drop the tokens retroactively. Once downside is that 40% of Uniswap is still owned by a very small minority. It’s fine because that’s still a start point, but I hope that in a few years this won’t be the norm anymore.” Marc: “This was a crypto UBI for sure. Another interesting story is that Kleros provided liquidity on Uniswap for a long time, and they are from Argentina. They got more than a year of funding, which is amazing for a small project, and there were several projects that were helped like that.” Joe: “I was inspired how many people reached out and wanted to give back that money to fair launch or to Gitcoin. This spirit of reciprocity is amazing. Open source has a business model now.” Mariano: “Maybe it’s not that widespread, but I noticed a couple of projects talking to me about this – instead of developing in the open they start to be more protective of their code because they are afraid of the clones. If somebody didn’t like in the way you did your launch, somebody can do a copy and do the same project with another form of distribution. I hope that cloning will stop some time.” Joe: “I think that we should distinguished between forks and fair launch, even though they overlap. Forks sometimes happen because people want a fair launch. They are not going away, and they change the competitive dynamic completely. I think it won’t go away and I have to say that fair launch isn’t forking. It is necessary but not sufficient to build an economic system, because the liquidity isn’t loyal. It also goes back to the definition of contribution and what we understand by “contributing”” Yalor: “Can we talk about contributing a bit? How can we do a better job to reach a wider community of users” Marc: “Mass adoption can only happen on Layer 2, more than 80% Ethereum users in the future might not interact with layer 1 and I am completely fine with that. They don’t have to, they can insert fiat into yield farming through a bridge, no need to interact with layer 1. With Aave we have quite a community in Argentina, we have a lot of community there that got some DAI and deposited it in Aave, and we are working on the solution to make these people pay less gas fees, and the solution is to make them interact with Layer 2 directly.” Mariano: “There are a lot of good things happening because the projects are on the layer 1 though. I hope that we will be able to interact with layer 2 in a few lines of code, because we can already do that with layer 1, and it is amazing. Swapping a stablecoin on Maker in a few lines of code”.
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