This time is different
Traditional finance is finally getting a facelift.
Thanks to new digital rails, TradFi’s walled gardens are becoming full-blown developer platforms. Names like Stripe and Plaid are synonymous with the “API economy” enabling this renaissance. (Yes, only 15 years into the smartphone revolution, you can now see your bank account balance on third-party apps.)
Of course, depending on your time horizon—and IQ level—crypto’s potential here should be even more exciting. See the tweet below.
Jokes aside, you don’t need to be a crypto true believer to see how DeFi is moving at lightspeed compared to traditional finance. We explored this tension with a new analysis of where DeFi is “eating” parts of TradFi. (Spoiler: tranche lending and structured products, arguably Wall Street’s bread and butter, are now being done on-chain.) The post is this week’s free Daily and available to all.
For clients, we have fresh deep-dives on the FEI genesis launch, new NFT use-cases, and a guide to decentralized derivatives. (Institutional subscribers can also watch video of the bi-weekly analyst call breaking down each piece.) On the podcast side, there’s an interview with Illuvium founders in anticipation of $ILV’s token sale this week, as well as recent interviews with the founders of Alpha and Alchemix. Plenty to dig into over the weekend.
Understanding FEI’s Genesis Event by Paul Burlage
- Users can commit ETH to the Fei Protocol bonding curve in exchange for the pro-rated share of the FEI (stablecoin) raised.
- The bonding curve price of FEI starts at $0.5 and scales up to $1.01 as more ETH enters the curve.
- Delphi Daily subscribers & clients can see the full brief here.
To InfiNFT and Beyond: Exploring New Use Cases by Alex Gedevani
- Yearn has lagged on a price-performance basis compared to other DeFi majors over Q4 2020 to Q1 2021.
- Zapper, Alchemix, and Curve, each in their own way, represent unique integrations that are important for Yearn.
- With the backbone built, Yearn v2 is off to the races. V2 Vaults have brought in sizeable AUM, but ALCX farming catalyzed this TVL growth
- Read the full brief here.
- Volume for BTC and ETH perpetual swaps is well-over $2 trillion per month now, making the total addressable market for decentralized derivatives extremely high.
- The hunt for scalability continues across multiple different venues. Synthetix on Optimism, AlphaX & MCDEX on BSC, Vega & Injective on native app-chains, Serum on Solana, etc.
- Institutional clients can read the full report here.
In Search of Yield: How DeFi is Reinventing TradFi by Ashwath Balakrishnan
- Yield in the context of traditional finance is cash flow you can generate on top of your principal, while in the context of yield farming, it’s earning a token in exchange for providing liquidity.
- For the average retail investor in crypto, the only access to pure yield is lending coins on platforms like Aave, Compound, BlockFi, and others. Retail investors in TradFi can access yields by either depositing money in a savings account or by buying bonds issued by governments and corporations.
- There are new ambitious projects taking on TradFi. Ribbon Finance is an on-chain structured products provider that specifically focuses on yield generation opportunities in the options market, while DeFi projects like Saffron Finance and Barnbridge are building the infrastructure for tranched lending.
- Read the full brief here.
As mentioned, we will continue to iterate on the design of our Delphi Debrief based on your feedback—so please let us know which section you enjoy the most and what else you’d like to see!