Original compilation: 0x9F, Rhythm BlockBeats

Original compilation: 0x9F, Rhythm BlockBeats

As an early participant and advocate of DeFi, I have always believed thatA decentralized currency and network needs to be powered by a decentralized financial stack.Otherwise, we can only transfer crypto assets between centralized custodians.

Many of the foundational DeFi protocols built during the 2018 and 19 bear markets became known and thrived during this cycle, becoming the core financial foundation of other protocols. They continue to prioritize security and risk management, making them less fun to speculate on and use.As the bull market progresses, more participants are chasing higher risk opportunities, and many are even very proud of themselves.Some of them have achieved spectacular gains, making the narrative of DeFi 2.0 replacing 1.0 popular.

As investors who focus on DeFi, we were ridiculed and missed "DeFi 2.0". On the whole, the market usually rewards such opportunities for risk-taking.We have discussed, researched, and debated many times internally what is a real and sustainable "narrative" and what is an unsustainable "narrative".But the market definitely wants us to be more open about how a project can be successfully structured and channeled in different ways. After all, on many teams and projects, we have been proven wrong many times over.

Although we continue to support DeFi projects on Ethereum, we also recognize that there is a market demand for DeFi projects built on other public chains.We do not take an EV (Expected Value) based approach to investing, but only invest in on-chain projects where we believe the ecosystem will thrive in the long term.DeFiance had the opportunity to invest in many much-contested L1 asset OTC trades, but we passed on most of them even when the alt L1 narrative was all the rage. Instead, we continue to focus on DeFi and provide support selectively.

I've been skeptical of Algorithmic Stablecoins and Terra since 2018. However, Terra's success in 2021 challenges my view. We see a whole bunch of legitimate and respected people supporting Terra - Jump, Delphi, Hashed. The Terra ecosystem has the best UI/UX and developers, and is the leading protocol built with the Cosmos SDK.

With the formation of LFG, we believe that the Terra model can thrive with these good opportunities:

1. Partial mortgage model (BTC support)

2. Anchor Yield Adjustment

3. Increase or decrease UST supply at a smoother rate

4. Wide range of non-reflexive and mainstream applications of UST, such as payment

finally,

finally,This is not just the success of UST, but the success of a crypto-native Stablecoin backed by a sovereign blockchain network.However, the fragility of this design has once again been exposed in a weak market environment. We've grossly underestimated how powerless the brightest and most capable people are in bad situations when natural physics and fundamentals are against you.

In the face of reasonable skepticism and criticism,Deference to the "smartest guy in the room", the arrogance of the leaders and the community was a big part of Terra's downfall.No one can be above the market, and the lesson of arrogance must be destroyed is repeated.

In the process, many of us lost our way, and I belittled people I once held in high regard. Rigorous debate based on extensive research and analysis is frowned upon, and lazy personal attacks are instead used to silence skeptics."Your opinions and opinions are worthless and unreasonable because I have been proven right in the past and I am more successful and richer than you."This kind of rhetoric has become a common argument for many people in our industry who forget that they were also nobody a few years ago. While I would not normally engage in such behavior, I have done nothing to call out and advise some of my friends and industry associates not to act in such an attitude. After a period of time, I also became a little shaken and accustomed to this behavior.

This sentence sounds even more striking now:If you remain neutral in the face of injustice, you take the side of the oppressor.

As the industry grows exponentially, crypto VCs play an increasingly important role as public beacons as the public lacks common standards that can be used to assess the legitimacy of Web3 projects.We all need to hold ourselves to higher standards. This role has been well-documented by non-Web3 VCs, even though some of them have chosen to bow to market pressure in the face of competition from heterogeneous investors such as Tiger and SoftBank. This has led to some major failures, such as WeWork, that have tarnished the VC's reputation with the public. I highly recommend The Power Law: Venture Capital and the Making of the New Future for an overview of VC's history and role in shaping the tech industry.

The LUNA incident will undoubtedly set the industry back and attract more legitimate scrutiny from officials and regulators. We need to do better than we are to prove that this industry is worth supporting and advocating for. Encryption is the freest market in the world, and there will always be people with bad behavior. This requires us to do more criticism and review ourselves to prevent such incidents from happening again. We need to be more professional.

i think it shouldAdvocate for a more comprehensive DeFi disclosure framework. Before encouraging the public to use and access DeFi, we should do our best to educate the public and raise public awareness of DeFi, instead of forcing KYC/AML like in the traditional financial field.A reputable, independent and well-managed DeFi directory, and a comprehensive disclosure framework are important and can do a lot to bridge the knowledge gap, such as the registry disclosed by Messari, is more detailed, perhaps as a by-product of cryptographic utilities.

The LUNA incident was a matter of extreme humiliation and hardship for me. We were generally correct about the bear market and thus more cautious, but many of our assumptions were challenged and disproved. We could have done more to stop this from happening.We have been too liberal in the past and accepted many unacceptable behaviors with our portfolio teams, industry partners and key leaders. In the future, we will only give full support to the invested teams and projects morally.

With great power comes great responsibility.With great power comes great responsibility.I also want to give credit to the rational skeptics who were willing to step up and endure the wrath of the mob to expose the whole thing: Galois Capital willingly risked the reputation of the industry collapsing, and all the other major influencers who have been warning about the risks , you guys are doing a great job.

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