DeFi Is For Kids Apparently

Most people don’t realize the impact DeFi will have on the future of finance and humanity.

 

But they can’t keep marketing like this.

 

This is not the way.

 

The following is nothing more than an editorial piece.  Do not let it offend you.  You’re better than that.

Defining Terms

 

Let’s define some terms here, but do it in my own unusual way.

 

“DeFi” is short for “Decentralized Finance” of course, but it encompasses more than what we’re talking about here.

 

DEX platforms, DeFi wallets, lending, derivatives, all that great stuff that will one day take over the majority of how people do things.  All of those items are involved in the DeFi ecosystem.

 

I’ll be mainly referring to DEX platforms, because they are the most front-facing and recognizable pieces of DeFi.

 

Remember, in order for mass adoption, we need normie money.  Never forget that.  And normies don’t see things the way crypto nerds do.  And crypto nerds have a really hard time wrapping their heads around this concept.

 

If DEX platforms are going to be the face of DeFi, things have to evolve way past where we are now in terms of marketing.

 

Well It Works, Doesn’t It?

 

I blame Ethereum for this.  Damn their incredible success!!

 

During the very early days of DeFi and DEX platforms, almost everything Ethereum touched turned to gold.

 

UniSwap was the first big blowout DEX platform, and continues to be the largest to date.

 

If you click the above link and go there, you will notice how the interface has changed a lot since the early days.

 

The early days were a lot more cartoony.  Lots of pastel colors, cartoon unicorns, etc.  If you remember, you remember.

 

 

Now most people wouldn’t think twice about this, they just wanted to use the platform for what it was.

 

But up-and-coming platforms DO pay attention to stuff like this, and not only attempt to mimic, but often attempt to become even more bombastic than their predecessors.

 

In their minds, it was clearly the cartoon element that drew people in, so why not make ours even MORE ridiculous and silly.

 

It is finance after all, right?

 

 

And oooooh did things go off the deep end after that.

 

Enter:  PancakeSwap and SushiSwap

 

Pancake swap really takes the cake here (no pun).

 

 

In all fairness, I have recommended PancakeSwap on the 10-Minute Contrarian Podcast, but it was because of their APY compared to their risk, which at the time was more than worth it.  Now, not as much, but I’ve always said about things with good yield/risk ratios, “If it’s there, take it”.

 

But during DeFi Summer, platforms like PancakeSwap and SushiSwap went berserk, and made their founders decamillionaires.

 

Again, I’m not stupid, this was a brilliant move by Binance and the creators of PancakeSwap.  It’s an Asian company, and many East Asians respond very well to this kind of cutsie-poo imagery.  They’ve grown up with it, and unlike most Western cultures, much of it stays relevant after childhood.

 

I do understand marketing, and the psychology therein.  And I do nothing but applaud PancakeSwap for their product and how they made it all happen.

 

But the monster it created….

 

Why Cardano, WHY??!!

 

Cardano is still my favorite blockchain, ecosystem, and my top token is, and has always been ADA.

 

Because Cardano, as we all know, is for patient people with more developed brains and psyches.

 

At least I used to think this.

 

Cardano developers had the chance to greatly improve on an existing product that was clunky and expensive.  A product that was pandering to the lowest common denominator of Western crypto investors.

 

And they somehow found a way to do worse all across the board.

 

The early days of Cardano DeFi were quite exciting.  We all hoped for a day where we could do either all or most of our finances on the Cardano ecosystem for just a few shiny nickels per transaction.

 

And you could actually do this right now if you really wanted to.  But nobody really wants to anymore.

 

The UI and UX were huge disappointments if you ask most chain-agnostic people.  Many of the things people wanted to use most and were looking forward to how easy and seamless they would be, ended up getting the total opposite.

 

I figured them out just fine over time, but the learning curve was more than I anticipated, I will say that.

 

But this isn’t what sunk Cardano DeFi 1.0.

 

It was more a product of horrible timing.

 

The DeFi crash of 2022 happened right as a lot of these platform were just getting a real head of steam.

 

Single-token APYs crashed to “Who gives a shit anymore?” levels.  APYs for liquidity pools and such still stayed relatively high, but it didn’t matter anymore because….

 

All of the Cardano DeFi tokens crashed too.

 

Now not ALL of them did, but enough to make most people completely lose interest.

 

At the end of the day, it doesn’t matter how much people “believe in the project”.

 

It only matters if number go up.  And a lot of people will still stay with it as long as number doesn’t go down.

 

But number went down.  Hugely.  How hugely?

 

To put it into perspective — for example, I love what the Bitcoin Cash blockchain does.

 

Just like Litecoin, which I am long-term bullish on, it primarily does one thing, and does that one thing really well, without any disruption.  Very clean, very fast, very inexpensive, just what crypto was always supposed to be.

 

But Bitcoin Cash has been a really bad investment.  Like, historically bad.

 

As much as BTC has crashed recently, take a look at what BCH has done relative to an already crashing BTC:

 

 

Double-whammy.

 

And not only has the ADA token fallen about 65% this year, most ecosystem tokens have crashed against an already plummeting ADA token.

 

 

Number go down.  Number really really go down.  And against something that already went down a lot.  These tokens performed so poorly, it had most bag-holders calling these applications “scams” and “rug-pulls”.

 

Most of them clearly are not, but you can see what really motivates most “believers” at the end of the day.

 

But I’m Getting Off Track Here

 

When these Cardano DEX platforms were beginning to launch, what was their identity?

 

How did they plan on getting people on board?

 

How did they plan on getting people to use their platforms instead of their competitions?

 

Attractive and creative pools and farms were certainly one of the ways.

 

But here we go with the freaking cartoons again.  Ohhhhh the cartoons.

 

SundaeSwap, as most of you know already, is in the picture that highlights this entire blog.

 

 

I can see the board meeting now.

 

“We’ve seen the success Pancake Swap had with it’s clear and apparent marketing to toddlers.  What we need to do is capture the market below their target market.  Any ideas?”

 

If you go to SundaeSwap’s homepage as of post time, you’ll noticed very little has changed on this front.

 

And it’s not like their competition was any better.

 

If you don’t want to give your money to a smiling bowl of ice cream (no BS, I just broke out laughing as I was typing that, I had to stop for a minute), why not give it to a cartoon space cat instead?

 

 

Or how about a superhero!

 

 

Cardano does have a few DEX platforms that do not go this route, such as VyFi and ADAX Pro, but they’ve yet to achieve even a fraction of the initial success as the ones who went the Saturday Morning Cartoons route.

 

And look, I can’t knock it for working.  There are far more “man-children” in the crypto space than I anticipated (just wait until you get into the NFT space), and every generation responds to different things.

 

But it still has a real degree of pandering to it — and not pandering to the types of people who are serious about their money, and therefore usually have more of it.

 

I’m serious about my money, as should you be.  And I will be placing very little of my money in anything that represents themselves with a silly cartoon.

 

I’m just playing the odds here people, don’t be mad.  Most people are going to do the same thing.  You gonna get all mad at them too?

 

Become A Serious Player

 

I hate to say it, because DeFi is anti-bank in every way, which is great, but they need to take a page out of how a bank markets itself if it ever wants to have a realistic long-term future.

 

How often do you see actual banks represent themselves with cartoon characters?  They’re credibility would crumble overnight.

 

Maybe if they have a special savings account for kids or something like that, but almost no serious bank wants to represent themselves that way.  Not even Web2 online banks have dared to go this route.

 

You know which classic financial institutions will do this sometimes though?  Quick-cash places who need to market to lower-income people.

 

 

It shows what they really think of you at the end of the day.

 

We need more seriousness in the industry.

 

If you look at the rest of DeFi, they actually do represent themselves with a lot more integrity.

 

The majority of wallets, because that’s what holds your ACTUAL MONEY, of course want you to take them more seriously, so by in large you won’t see the cartoons here (MetaMask, I know, I know)

 

Crypto lending is a serious business too, so top ADA lending platforms like MELD, and Liqwid avoid this type of representation too. Liqwid has an 8-bit raindrop on it.  Actually pretty “adult” by comparison.

 

However, as I said before, your DEX platforms are your most front-facing aspects of your DeFi ecosystem.  This is what people will see the most often.

 

I have another theory on why this dichotomy exists as well…

 

We are still at a stage where most people do not value their crypto the same way they do their cash.  They see them more as virtual gambling chips, hence the marketing.

 

But this will change over time too.

 

If you want your DEX to have longevity, and not just pander to impulsive, lower-income Zoomers for a few years, you have to step it up.

 

I want very serious people handling my money.  Not people who represent themselves as a smiling bowl of ice cream.

 

Pretty soon, fees will no longer be much of a factor in terms of which DEX we choose.  The ETH merge just happened today.  We’ll see what it does, but this was a huge step towards lower transaction fees for all users across the board.

 

As investors evolve, and as the industry strives for mass adoption, the pendulum is going to need to swing the other way.

 

Safety, options, ease of use, and if possible (even though I know it’s DeFi) service are going to be things people seek out the most in the DeFi space.

 

Things like high-yield APY farms and pools will probably never go away, but anyone who is interested in those things is probably already using them.  Again, we need to gain mass adoption here.

 

And how we represent ourselves to the public is where it starts.

 

Bullish on the Future (And Past)

 

I am deeply pulling for all of the companies I just got done making fun of.  I have actually enjoyed using most of them, I understand what it takes to pioneer a company in this space, and I would love nothing more than to see they, and the ecosystem become wildly successful.

 

They’re taking most of the bullets so the industry as a whole can thrive, never forget that.

 

And remember too, I’m only being critical of what has become version 1.0 of this movement, and I think it’s fair.

 

But make no mistake, it has been nothing but a remarkable positive long-term.

 

Version 1.0 hardly ever goes down in history as a “success”.

 

As for Cardano, maybe it isn’t a success just yet, but the flags have been planted.  And I can’t wait to see what’s next for the current platforms, and what evolves from it all.

 

In order for there to be a 2.0, there has to be a 1.0, and IMO we have officially had its genesis, its bull, and its bust.  It was all very, very necessary.

 

We are currently in its bust cycle, so TradFi by default starts to look a lot better, but I have a strong feeling this will change over time.

 

TradFi in many ways is hanging by a thread.  All it needed was one crazy decade to bring down the whole house of cards…

 

I mean, we’ve resorted to printing trillions of pretend dollars just to keep everything from collapsing in on itself.

 

Where do you think we go next?

 

Conclusion

 

Proponents of the way DeFi has been marketed so far may say something to the effect of “VP, DeFi isn’t all stuffy like banks are, it’s supposed to be FUN and EXCITING.”

 

I’m taking the other side of that argument.

 

Maybe it’s fun and exciting when times are good.  But that’s not where we are, and that’s certainly not where we’re going.

 

A lot of really dumb things can still work (temporarily) at the tail end of a bull market.  But we’re not there anymore.

 

Plus, your audience is growing up.  And a lot of them have gotten burned and/or disappointed by the old ways.

 

Maybe it’s time to realize you’re dealing with money, a very serious matter.

 

It’s time for a collective shift.  An intelligent one.  A step forward.

 

 

— VP