Feb 28, 2020
Ethan is joined by Evan Kuo from Ampleforth, for a exploration into the potential of DeFi - Decentralized Finance.
Today's decentralized assets, such as Bitcoin and ETH, can be seen as the primitive building blocks for tomorrow's DeFi use-cases. These include lending, debt, and synthetic equities, however, we quickly come to a realization of their inherent limitations. Evan breaks down how their limitations are due to their high correlation to each other and why they bring about the need for extreme overcollateralization and the risk of autoliquidation.
This brings up a big problem in crypto that not many are addressing. The diversification of these primitive building blocks will be required for DeFi to reach its potential. Hypercorrelation is a huge problem, one that threatens the very viability of cryptocurrency.
Further topics covered in this episode: