RE: What The YAM Drama Can Tell Us About DE-FI
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When it sounds too good to be true, it usually is..
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When it sounds too good to be true, it usually is..
Lol My dad always says that, even about Bitcoin and I get that but I feel like Bitcoin is different
I agree. And I just finished reading an interesting article and found that I didn’t fully understand before what this yield farming really is.
It is not nothing. The coin that is farmed is real and is used for governance of the decentralized project, but it is helpful to think of it as an investment in a startup. Nobody will guarantee you that it will still exist a year from now.
Also DeFi is still a very new industry. So there are loads of things that can and will go wrong.
But I saw the code for the YAM smart contract was never audited and people still jumped into it, I'm not saying the designer of the contract was malicious but it was misused by someone, since yes a lot of people lost money but someone won big time on the trade.
I don't see how yield farming is a net positive for the ETH ecosystem, yes people are making money but its a zero sum game of moving capital around but not actually doing anything constructive with it
Oh I didn’t know that. That is exactly why you should consider this totals farming, like most other crypto projects, high risk investments.
Well, the idea was that users of the system would get the tokens and then would take part in the governance of the project. But because the token can be traded, people found ways to maximize their gain.
Decentralized governance is cool, but when the benefits of the token are too big then people will go for the gains rather than the governance.
You make such a great point there I was actually listening to a debate on that topic that anything that is about governance or utility on chain is better suited to have a lower unit price or it actually holds back the system
Not every crypto is meant to be a hard money asset like BTC, these more complex ones like ETH that’s virtual machines require more daily transactions to operate and playing thousands makes more sense just to use operations
Then like you say on the flip side if is just pumping you get people who are more focused on trading than using the utility and they overwhelm the system and supply and then actually detract from using the chains services
Exactly.
Also, there isn’t much point in several different kinds of gold. Because then we still don’t know how much gold A is work in terms of gold B.
But decentralized projects that are governed by the people that actually use it. That is a great idea and we can easily have millions of those, as long as they don’t try to be a better bitcoin.
I don't mind if there are two trying to do the same thing in a sector lets say with Oracles, BAND and Chainlink are trying to do that, so them competition brings down the price of the service, instead of one ruling the sector.
Bitcoin is so different from other projects, it's about anything other than its provable scarcity, I think most blockchains are trying to do too much, look at Eth its always pivoting trying to find something that will stick
I don’t know that much about ETH, but I think innovation is sort of necessary to keep the interest of people and make sure that DeFi dapps are not built on another blockchain.
I don't actually believe in one blockchain for one thing, I think its only a sign of the times, eventually which chain works won't matter, you would just use the front end you like and do what you need to and the dapp will talk to the chain it thinks is best or needs to extract something from, that's why I'm like oh this chain or that project, they're all just pushing us towards the same direction
That’s an interesting thought. In that future dapps would tell you which blockchain they use as a sort of ISO certification.
It could also become something like android or iOS platform that has many dapps and the most popular ones are on both platforms available.
I’m curious what it will become.
I think there will be something like you mention but the way I see chains is the way I see codebases, like do you care if the site is written in java, or C++ or PHP? No you just want to use it because it solves a problem for you. the front end will pick and choose how it executes and what tech it uses and you just do your thing like login to a site, pay a user etc you won't be any the wiser.
For us who like the stuff, we would dive deeper but for grandmummy she doesn't have to be any the wiser than she would be using Facebook
That is a valid point indeed. And yes most people don’t care at all why technology works, as long as it works.
The article I read: https://www.coindesk.com/defi-yield-farming-comp-token-explained