TL;DR | The China Ban Can't Stop New DeFi

Follow Luke on Twitter! https://twitter.com/luke_spotlong ------ 📣 ZERION | Your Gateway to the Metaverse! https://bankless.cc/Zerion ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 🎖 CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini​ https://bankless.cc/go-gemini%E2%80%8B 💧LIDO | DECENTRALIZED STAKING https://bankless.cc/Matcha 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants/dharma ------ Topics Covered: 0:00 Intro Zerion https://bankless.cc/Zerion 0:45 Crypto Gaming Podcast with Arianna Simpson https://shows.banklesshq.com/p/the-crypto-gaming-revolution 3:29 Coordination Layer Zero with Kevin Owocki https://shows.banklesshq.com/p/-layer-zero-kevin-owocki 5:27 Fixed Yield Guide to Barnbridge https://newsletter.banklesshq.com/p/how-to-earn-fixed-yield-on-barnbridge 5:53 Options on Layer 2 Guide to Lyra https://newsletter.banklesshq.com/p/a-guide-to-options-on-lyra 6:29 New DeFi Is Rari Undervalued? https://newsletter.banklesshq.com/p/is-rari-undervalued 7:09 Regulation is Bullish Market Monday https://newsletter.banklesshq.com/p/build-faster-market-monday Podcast with Sahil Bloom https://shows.banklesshq.com/p/evergrande-and-chinas-crypto-ban 9:17 Closing & Disclaimers ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Crypto gaming is the next frontier. Coordination allows us to explode in all sorts of directions. And is the China ban bullish for DeFi? All this and more on.

• 0:11Speaker 00

  I'm Luke and this is TLDR, where we catch you up on all the headlines and important narratives from around Bankless this week. As always, there are going to be links down in the show notes, so you can do a deeper dive into any of these topics. And before we get started, I want to shout out our sponsor, Xerion. Xerion's a big player in the dashboard crypto portfolio manager game, but they're also rolling out a series of really cool NFT related features. This includes ways to flex like home screen widgets on your phone and Apple Watch faces, and also more technical features like sending NFTs between wallets and detailing in NFTs attributes. If I had a CryptoPunk, I'd be showing it off at xerion.io. Oriana Simpson from A16Z came on the podcast this week to discuss the absolute explosion that we've seen in crypto gaming. Since the start of DeFi, gaming has emerged as an obvious use case for crypto, but it's

• 0:56Speaker 00

  been slower to arrive than other sectors. For one, game development takes a long time and it also requires scale. So now that we're scaling with Layer 2s and sidechains, there's no surprise that gaming has seen a boom alongside it. Axie Infinity has had an outrageous year, building an entire economy on top of its vibrant community. This is a salient example of the concept of play to earn. Gaming has evolved substantially from the early days of going to a store and buying a disc or a cartridge or going to an arcade. And currently, we see a pay to win ecosystem with microtransactions for skins on Fortnite or your favorite player on 2K. But with NFTs, crypto is leveling this up. Players can now own their in-game assets, generating value for themselves and their community.

• 1:38Speaker 01

  You know, if you look at the history of crypto, we've really spent the last few years building the core infrastructure that was necessary in order to start enabling some of the more consumer facing and application layer.

• 1:53Speaker 01

  Experiences, including games. We've now reached a level of kind of functionality where we can build things on top. And so I think the fact that, you know, that's the point that we're at now is what's enabling a lot of these gaming and entertainment experiences, obviously first and foremost, Axie, but the whole ecosystem around it too, to really start to flourish. Crypto has always had a very high barrier to entry. It can be a little bit daunting. You have to be fairly technical. And gaming, I think occupies a really unique space in the sense that it's allowing people who might otherwise say, oh, I don't know how I would get into this. You know, what's a transaction?

• 2:38Speaker 01

  What's a hash? What's either scan? You know, all these things to start playing around with it in a way that's a lot more approachable and fun, frankly. And so what we're seeing is that it's really opening the floodgates for a whole universe of new crypto users. Once people come in, start playing games, see, you know, the fun, the potential economic upside, you know, the communities, like there's just so many positive things that can be found in these experiences as people play around with it. You know, then they start to percolate out into other parts of the crypto ecosystem.

• 3:17Speaker 00

  The growth of crypto gaming is a key pillar of the emerging metaverse and it will be really interesting to watch as high quality game studios continue to build on crypto rails. Gaming is just one example, one fractal of what's happening in crypto right now. This industry is taking off in all sorts of directions at a breakneck pace, and this is due to us leveling up our ability to coordinate. That's what David talked to GetCoin founder Kevin Awaki about in this week's Layer Zero.

• 3:40Speaker 02

  Progress becomes exponential. So basically every new money Lego that gets added to the Ethereum open source world means that there's a new possibility that I can build when I walk into a hackathon. I like to say that you walk into an Ethereum hackathon today and you can get enough software off the shelf to build something during the weekend as three hackers that some bank 10 years ago would Have to have 100 people and $20 million worth of budget to build with closed source. Because there's this exponential ability to just pull new Legos off the shelf. And every new Lego creates a new permutation of something that can be built. And so I think we're going to see exponential. This is, this is why I think the open source financial system is going to beat the closed source one is because progress is just exponential in it.

• 4:24Speaker 02

  You can build things so much faster with, with open source libraries than you ever were able to in the old financial system. So that's what makes me almost certain that DeFi is going to beat out TradFi eventually.

• 4:36Speaker 00

  Evolution happens on a generational scale. Each time something iterates, it has the chance to get better, to improve, to innovate. And the internet is giving us the ability to iterate at a faster and faster clip. This is exaggerated even more when we promote open source software, building things that anybody can use. And that right there, as Kevin puts it, allows us to stand on the shoulders of giants. When we promote open source software, we can more easily promote public goods. And as time seems to be speeding up on us, we are quickly launching ourselves into the next generation of society. How it's all going to shake out is still a big mystery and it definitely depends on our priorities. If we incentivize open source, public goods and promote coordination and collaboration on an individual and collective scale

• 5:16Speaker 00

  and seek harmony with the world around us, there's a good chance we can find ourselves on trajectory for a solar punk civilization. And if we don't, well Blade Runner and V for Vendetta are pretty cool movies. On a more practical level, our tactic this week covered fixed yield with Barnbridge. And DeFi, we're pretty used to seeing variable interest rates, but fixed yield brings the stability and reliability that many investors want to see. Barnbridge's smart yield system offers fixed rate yield opportunities on your assets and is building out infrastructure for composability for both collateralizing their products and scaling to layer two solutions. Read the article to learn more about how to earn fixed yield and some of the other cool projects Barnbridge is working on. We also covered Lira, which is an options protocol that deployed natively to optimism's layer two roll up.

• 5:58Speaker 00

  Lira lets you buy and sell options and also provide liquidity for those options. Now derivatives and DeFi have been tricky in general. First, because they're difficult to both price and scale, but also because they're inherent risks to counterparties, the liquidity providers. Rari uses synthetic spot markets to measure both price and volatility and the products here offer investors exposure to leverage hedging and income. All of this would be impossible without scaling and although derivatives can be tricky to understand, options are extremely powerful financial instruments and it's definitely a level up for DeFi. Also, Ben covered Rari Capital this week and the RGT token. Rari has been a blue chip in this new wave of DeFi native protocols we've seen emerging recently.

• 6:38Speaker 00

  Their Fuse protocol creates isolated money markets, which means there are fewer limits to how many different kinds of assets can be lended or borrowed. Rari is moving in the direction of opening Fuse to permissionless pool creation, which could mean an explosion of new borrowing and lending markets. Paraphrasing Ben, Rari could become the Uniswap or Sushi Swap of money markets. I'm personally really interested in this emerging sector of newer DeFi products that Rari finds itself right in the center of. They've partnered with protocols like Olympus Dow, Index Co-op, Faye, TokenMac, Yarn and more. What's good with the new DeFi? The last big narrative we covered is regulation in China and the US and there is a lot going on here. There's regulation worries and there's also macroeconomic worries. But for the same reason, there may be cause to be bullish on the macro picture and bullish on regulation.

• 7:22Speaker 00

  In Market Monday, David talked about the infeasibility of regulating crypto. If everything in crypto is a security and you want to regulate all of it, well, there has to be a trade off somewhere. You either have to change what you're willing to regulate or how you regulate it. There's simply too much building going on to rule with the firm grip Gary Gensler talks about. In State of the Nation, Sahil Bloom came on to talk about the Evergrande scandal. This Chinese real estate giant taking on gargantuan sums of debt and the current liquidity fallout. Although this pales in comparison to the 2008 crisis, Sahil describes this as the tip of the iceberg of the reckoning in credit looming before us. This is all taking place amidst another China crypto ban, but this time it seems a little more serious. Data sites like CoinMarketCap are being blocked and exchanges like Wobi are closing out accounts.

• 8:06Speaker 00

  This has had the side effect of capital pouring out of centralized exchanges and into DeFi.

• 8:10Speaker 03

  I think everything is long-term bullish for crypto. I mean, I just think it's like the natural trend of progress and technology and society is where we are headed with these things. And so I think that like these blips along The way these bands, the different people that are going to try to take control. It's like trying to put, you know, a dam in front of a river that's moving. It's just going to find ways to pour around it and continue marching towards where it's ultimately going. And we're going downstream. Progress is being made. Real technologies and applications are being built. And you can't stop that in in such a simple way. And so I I continue to be just long term bullish. Short term, who knows? I mean, governments do crazy things. It causes price impacts.

• 8:53Speaker 03

  I don't really have a view short term ever on things. But long term, the technologies are real. They're here to stay. And there's real useful, high utility stuff being built, which at the end of the day is what matters.

• 9:05Speaker 00

  People want to be free. And the more that nation states tighten their grips, the more people in their capital will flee to the amnesty of DeFi. Centralized exchanges can be stopped, but stopping DeFi is a much greater challenge. So with that, I want to quickly shout out our sponsors Gemini, Lido, Ave and Uniswap. These are places where capital is fling as the credit bound nation states falter. Also, this video wouldn't be possible without them, so thanks a lot. And finally, none of this is financial advice. Eth is risky, DeFi is risky, but we are headed west. It's the frontier. It's not for everyone, but we are glad you are with us on the bankless journey. See you next time.

• 9:38David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast and community as a bankless premium subscriber to get the most out of your bankless experience. You'll get access to our market analysis, our alpha leaks and exclusive content, and even the bankless token for airdrops, raffles and unlocks. If you're interested in crypto, the bankless community is where you want to be. Click the link in the description to become a bankless premium subscriber today.

• 10:15David Hoffman?

  Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, ask me anythings and weekly rollups where we summarize the week in crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the bankless nation.