Meter hosted our very first DeFi event called “The State of Decentralized Finance” on August 22, and it was a roaring success!
Bringing together more than 200 of the keenest minds in blockchain, the DeFi mini-conference comprised of keynote speakers, panelists, founders, builders, venture capitalists, investors, and many more enthusiasts.
The venue was abuzz with excitement, fruitful discussion, and unforgettable learning experiences. Panelists and keynotes presenters included leading DeFi builders, such as 0X, Set Protocol, Compound, Maker, dy/dx and Coinlist.
The top VCs and investors that were represented at our event include Pantera Capital, Paradigm, Electric Capital, and NGC.
The speakers kept the attendees spellbound with their insights, observations, and their views on the new trends and opportunities that are currently crystallizing in the industry.
Some of the key topics for discussion were as follows:
- How on-chain assets and stores of value in the crypto world cannot lead to mass adoption.
- The risks associated with DeFi projects — including smart contracts and blockchain oracle risks.
- Programmable tokens of DeFi and how they allow people to combine different types of financial products together — like Lego building blocks — and create great opportunities for innovation in an unexpected way.
Key Takeaways from the Event
Here are a few takeaways and summaries of presentations and discussions from the event.
Discussion from a presentation by Xiaohan Zhu, CEO of Meter
A decentralized business has all its revenue and expenses transparently recorded on the blockchain. The transparent nature of blockchains allows investors to have a holistic understanding of their investments in such business instantly. It reduces misunderstandings and frictions between investors and entrepreneurs, also eliminating potential fraud.
When putting the physical assets (like fiat money) on a chain, the real value is still off chain and not moved into the cryptoworld.
For example: if you send a bar of gold through Fedex, the value of that particular gold bar is not adding value to Fedex, only the mailing fee is.
To grow the economy in the crypto world, decentralized businesses have to create enough value to attract people to give value in the physical world and move the value permanently on-chain. If we build a crypto economy using a fiat-based stablecoin system as the base layer, all the value we create will end up under the custody of the issuers of the stablecoins, thereby creating huge systemic risk.
Key Feedback from the DeFi Developer Panelists
DeFi enables enterprises and individuals to conduct business, trade assets, leverage markets, and exchange many more financial instruments.
Currently, most DeFi users are hardcore crypto users who have experience using crypto wallets and who are comfortable interacting with blockchains. However, more everyday mainstream users are expected to start participating when ongoing DeFi improvements make it more user-friendly.
The basic logic and business development method of DeFi is very similar to Internet-based finance. Which means that at the beginning stage of DeFi projects, a centralized operating team is still needed to promote and operate the day to day activities until it is possible to let DeFi exist autonomously as a fully functional system.
DeFi projects include substantial systemic risk which requires particular attention. Risks mainly exist in smart contracts and oracles. We believe that the next critical step in DeFi is to develop base layer solutions that are free from any centralized intervention, and that are secure, and tamper/fraud-proof.
Key Feedback from the VC and Investor Panelists
The DeFi market is still in its early stage, therefore DeFi business valuations are still in uncharted waters. The valuation for cash flow-based DeFi projects can refer to traditional valuation methods. However, the valuation of value-storage projects can be difficult and controversial.
As a matter of fact, DeFi refers to both crypto-based finance and centralized finance (CeFi) projects. But given the fact that CeFi projects are easier to use at this stage, they are more common than DeFi projects.
The advantage of DeFi is that it can accelerate innovation because DeFi is not hamstrung (yet) by regulation. Programmable decentralized tokens allow people to combine different types of financial products together -like Lego blocks- which creates great opportunities for innovation, and in an unexpected way.
Besides, many people believe that it is necessary to incorporate Bitcoin into the DeFi ecosystem in a trustless way.
The State of Decentralized Finance Meetup was a huge success!
Please view and enjoy all the talks and discussions on the Meter Youtube Channel.
For the Bay Area locals we are hosting another event on October 30th, Discussing ‘The State of Blockchain Interoperability.’ Please RSVP to secure your spot now.