12 - The Protocol Sink Thesis
How DeFi protocols become the foundation for everything
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🎙️NEW PODCAST EPISODE
May 18, 2020
When someone gives you money how confident are you that it's really yours? That's a settlement guarantee. It operates at the base layer of our societal tech stack and usually requires law and nation-states to enforce. With crypto we have something new, we have settlement assurances. That changes everything.
Protocols with higher settlement assurances are more dense. They sink to the bottom of our societal tech stack and become the foundation for everything else. This is the protocol sink thesis, that DeFi protocols with the highest settlement assurance will become the base layer..the base layer for crypto banks, commercial banks, and even nation-state banks.
When enough value is locked and enough time has passed, the money protocols win. That's what the thesis predicts!
Dive into the protocol sink thesis w/ Ryan & David!
Settlement guarantees through time
Legal system settlement & traditional finance
Why protocol settlement changes everything
Protocol Sink Thesis ("How DeFi Wins")
Why Trusted things get built on
How DeFi protocols sink
Time Value Locked as the meter stick
How to test the thesis
The transition to long-term thinking
Understanding this thesis will help you become a better crypto investor.
Before the episode begins we also talk about:
Grammy-award winner RAC issues on Ethereum
Tools from our sponsors to go bankless:
Monolith - holy grail of bankless Visa cards
Aave - money lego for lending & borrowing
(Article) It's the Settlement Assurances Stupid
(Article) Crypto-fiat: mutualistic or parasitic?
(Article) Great protocol sink
(How-to) How to buy $TAPE token
Watch for evidence of protocol sink thesis:
Crypto exchanges add DeFi protocols
Trustless stablecoins like DAI taking from USDT
Stablecoins issued on public chains like Ethereum
More value flowing into BTC and ETH
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