Speculation as go-to-market Strategy DeFi

From Variant: https://variant.fund/articles/speculation-as-go-to-market-strategy-defi/

All builders know Boostraping methods are the sinews of war for crypto product. Users are worried about their money and the risk of a new smart contract. => team needs to provide a compelling product to reassure future users and give them good incentives.

  • Currently, the most successful project achieves rapid PMF by enabling financial speculation => purpose: providing the initial liquidity spark for the protocol properly function

~ New DeFi entrants should focus on providing UX that welcomes speculators

  • DeFi protocols are not just new fintech apps; they require motivated participants in a brand new financial market → incentive strategies: airdrop; liquidity mining; high leverage => financial speculation

The risk of this financial speculation is that it generates metrics and creates the appearance of achieving sustained PMF. It’s hard to identify a true PMF, but one way to know if it’s not achieved is to observe what’s happened when the incentives and bootstrapping mechanisms are stopped → these metrics still maintained? What about the user’s retention? Do they still have the same engagement?

~ Joseph de la Vega’s Confusion de Confusiones in 1688, described the frenzied nature of financial markets: the author described the early stock market as a “gambling hell” with “two classes of speculators.

  • Speculators are, in fact, the first constituent group needed for establishing new markets.

Collaboration at Scale

Source from Arthaud

The author is asking himself a question: web3 provides us with a new set of tools to tackle civilization’s most urgent problems.

The problems that will define our future as a species are:

  • global
  • wicked in nature → difficult or impossible to solve because of incomplete, contradictory, and changing requirements Both of them require collaboration → need better tools for collaboration at scale.

  1. Online Collaboration with internet, where you can:

    • learn
    • coordinate
    • work together independently of national borders But certain blockers limit our ability to collaborate: - bureaucracy: administrative; banking; fundraising - lack of financial incentives for participants - lack of trust and transparency

  2. Onchain Collaboration with Web3 enables and highlights new properties:

    • experimenting new way to work together towards a shared objective (revisiting the bureaucracy)
    • better incentive alignment (financial incentives)
      • ownership => makes collaboration more scalable
      • holding tokens → shared objective
    • creation of more public goods (improve the trust and transparency)
      • transparent because that can be audited by anyone → don’t require trust from a central entity
      • we don’t need to trust anyone; we just need to verify each other behavior

Internet + Web3 = set of tools that should be leveraged to tackle problems to the best of our ability

Web3 collaboration at scale:

  1. increases scalability of projects by creating financial incentives to participate
  2. breaks down the barriers to participation by decreasing the bureaucracy without requiring pre-existing trust

Project: Index Network

Empowers individuals to build and use custom search engines without compromising data ownership, composability, collaboration, or monetization.

What Index Network provide?

  • a tool that enables users to translate their expertise and skills into valuable, owned, and monetizable content (= blockchain proprieties). Current problem: “Web discovery tools have fallen short when it comes to connecting users with meaningful information online”

How does Index Network work?

  • Powered by Lit protocol, creators and users can:
    • establish on-chain access
    • linked collaboration
    • monetization
    • DAO membership
    • own particular NFT
  • Via Ceramic Network, IN offers
    • data interoperability and composability
    • allows discoverability of different data models, such as:
      • attestation; events and products
    • build on top of IPFS, Ceramic offers:
      • guarantees indexes are housed on a decentralized network
      • letting users construct, own, and store their data (independent of centralized third parties).

What’s possible with Index Network?

  • user’s can create and design custom search engines:
    • each index focuses only on the content specified by the user.
    • index are searchable and filterable → work as topic based search engines
    • AI provides: predictive search / semantic comprehension => fostering richer and more contextually revealed search results
  • creating indexes
  • monetizing access to indexes