Did DeFi really revolutionize VC? Thoughts after the rise of grassroots projects such as YFI and Sushi

Last weekend, the price of YFI broke through $35,000, and everyone's attention was focused on DeFi.

Since the yield farming and liquidity mining craze broke out, a common theme we have encountered is: fair launch.

In the world of Ethereum, there is a long-standing assumption that fees in rent-seeking protocols will generally tend to 0, or at least as low as possible, because any protocol that introduces fees also introduces an incentive for forks that can provide the same product/service but without the fees.

Therefore, people believe that a protocol or team can only charge a certain fee as long as the threat of forking the protocol is minimized.

All the money Legos over the past 2-3 years have given the grassroots community the tools they need to replicate every DeFi application on Ethereum and re-release it with a new set of protocol owners.

Now, for VC protocols where both the team and investors hold a high percentage of tokens, there is actually an opportunity to fork its code, introduce some yield farming incentives, and redeploy the same products and services under new management. ( Translator's Note: For example, the recently popular Sushi project )

The motivation is so simple that it’s easy to predict that every DeFi application will have a “fair launch” replica.

Frankly, the incentives here come from the same energy as many ICOs in 2017: the team that forks the protocol has privileged knowledge and gets to reap the benefits early. Yet, at the same time, the incentives are completely different because the forked team does not have the ability to take a disproportionate share of tokens or print any currency for themselves.

Same model, new structure, a big step in the right direction.

Will the new boss be the same as the old one?

Ryan tweeted on Sunday that VCs need to buy retail chips to get in on YFI, which suits his preferences, and the tables are turning!

But Jacob Franek of Coinmetrics raised an objection, saying that many venture capital funds are also in these yield farms. James Prestwich also echoed his point of view, saying that the average position of DeFi farmers who are farming is $117,000. This is obviously not a game for retail investors, but a game for whales, just like the old bosses.

Jacob and James missed something, we just invented a new way to give retail investors the same level of access as VCs! Joey Krug of Pantera Capital confirmed this, his fund was not designed to farm YFI so they had to buy it.

Universal Law

It is important to remind ourselves that there are some laws that are written into the fabric of the universe itself and that can never be violated, such as:

1. Capital begets capital;

2. Those who are paid to earn money will perform better than those who do not;

3. Professionals and professional teams have more resources to make smarter decisions than the retail crowd ;

Something else that is also written into the fabric of the universe is the human tendency to create new systems of fairness that become permanently integrated into the world.

The world is always trending towards being more fair and equal, and the way humans organize themselves across time is becoming increasingly fair.

In the new round of fair issuance and liquidity mining, we did not put VCs behind retail investors. On the contrary, we gave retail investors the tools and opportunities to become VCs!

Venture capital will never go away, there is always the possibility of getting ahead of the curve, or paying someone else to do it for you, that's VC.

The fair launch of Ethereum does not care whether it is VCs or retail investors competing for returns. If someone tries to limit VC participation, it will no longer be a fair launch.

Let me reiterate, if you participate in a fair launch with $10 or $10 million, this means:

With Ethereum, not only can you create your own bank, but you can also be your own VC.

The rules of the game have changed.