https://twitter.com/BowTiedLunatic/status/1490886973631787008
1/ The DeFi ecosystem will ultimately evolve to have the same core components of TradFi, but democratized.
L1 tokens that build these functions have potential to be the most successful long-term altcoins IMO. Here are a few I believe are positioned for success...
2/ Crypto will foreseeably be cross-chain, it already is, and it will need a financial market at the center of it.
At its core, @THORchain will act as the DeFi financial market, providing liquidity and cross-chain swaps across major L1 chains, all while being non-custodial.1
3/ $RUNE token has 4 roles: liquidity, security, governance, and fee rewards. Each role is fully integrated into the tokenomics and value accrual mechanism.. Still one of the most ingenious designs I have read about.
The incentive pendulum of @THORchain auto balances
4/ yield rewards between node operators and liquidity providers to ensure the protocol maintains the optimal 2x bonded value to TVL in the pools. This gives $RUNE a baseline deterministic value of 3x the TVL of non-RUNE assets in the pools.
via: https://thorchain.live/thorchain/chaosnet
5/ Beyond that, TC will be soon be offering synthetic tokens and other derivative assets to continue expanding its DeFi applications.
6/ Currency is the blood of every fin system, allowing an agreed upon exchange of value. Ideally, it holds its value between transactions and we trust it will be accepted.
We are witnessing how important a non-censorable stablecoin is, one driven by economics.
7/ @terra_money is an ecosystem on its own, with plenty of niche projects, but at the center stands $UST. The algorithmic stablecoin powered by $LUNA with an $11.3 billion market cap.
8/ $UST and $LUNA work in tandem to provide economic incentive to keep $UST pegged to $1.00 through arbitrage. No price oracles, obscure collateralizing assets, or trusted entities needed.. Just basic ECON 101 principles.
9/ Terra is being implemented as the backend of real world debit card payment systems like Chai in Korea and Alice, dropping soon in the US (along with many others).
Having tangible use cases outside of degen farms yield farms and LPs bridges the gap between internet money
10/ and paying for groceries, but also creates a baseline demand to mint $UST by burning $LUNA. In theory, this would be uncorrelated to the crypto market volatility and help bring some stability to $LUNA price as it becomes more mature.
11/ @OlympusDAO is attempting to build what I view as the first DeFi financial institution, one resembling a central bank to increase stability. An ambitious idea and likely necessary in the long-run.
I would like to see it mature some, but I will be watching $OHM closely.
12/ These are just 3 of the 5 components of a developed financial system that we will likely see evolve in DeFi and 3 examples that I believe are leading their competition. They all may not last forever, but they will certainly help their successors learn from their journey.