# Furthermore - llms-all.txt Furthermore publishes essays and research on open systems, crypto markets, internet-native coordination, and financial systems. Generated: 2026-07-08T18:11:31.118Z Posts included: 13 ## Posts ### The Incentive Full Stack URL: https://www.furthermore.co/the-incentive-full-stack/ Published: 2026-05-29 Tags: prediction market, growth, incentives, web3 Excerpt: Inside Polymarket’s growth orchestra: product pull, liquidity, referrals, rebates, and retention. Body: Polymarket’s prediction market PMF is the visible story. But who gets paid to make truth liquid? What behavior gets rewarded? Does it compound? This post originally was a series of tweets last week I decided to pull together in one post. If I missed something or got it wrong, let me know on 𝕏. Incentive Full Stack Polymarket is orchestrating incentives like a symphony: * 2022: UMA and USDC rewards paid betting liquidity into existence (link1, link2) * 2025: Dub.co signup affiliate links: $0.01/click + $10 first deposit (link) * 2026: Native fee-share referrals: 30% from your referrals, 10% from theirs, with a 180-day boosted fee-share window (link) * 2026: Maker rebates that recycle fees to makers (link) * 2026: Taker rebates that reward repeat trading (link) * 2025/26: token airdrop buzz (link) Each instrument trains a different behavior: show up, deposit, trade, provide liquidity, return, or farm. Referral Mechanics Is the first deposit a user, or something else? Partners optimize for the metric they are paid on. That is one reason why Polymarket’s multiple prongs are interesting. The Dub.co affiliate program rewards arrival: * $0.01/click * $10 first deposit But Polymarket’s native program rewards trading fee flow: * 30% from your referrals * 10% from the people they refer * 180-day boosted fee-share window That native layer rewards bringing users who can bring more users that stay a while. Not just a signup, but rather a distribution node. And that is before liquidity rewards, maker/taker rebates and airdrop buzz enter the room. Getting users is one game. Getting the right users to return is a little bit of science and magic. Polymarket’s referral design already appears to be changing, which is the point: incentive systems are iterative. Product Flywheel Polymarket has a zeitgeist product flywheel built in. The ultimate internet native growth loop. * Hook pulls you in. * Ignition spreads it. * Gravity keeps you. * Integrity earns trust. * Scale takes it everywhere. A major event becomes a market-- The market produces odds-- The odds become a screenshot -- The screenshot becomes an argument -- The argument brings traders-- The traders move the odds-- Then the new odds become the next screenshot. That is the product loop. * CFTC settlement. * Thiel funding halo. * Election odds beating pundits. * FBI raid. * Maduro bet. * Wall Street integrations. The headline machine becomes the headline while the incentive stack turns that attention into a set of behaviors. Retention The Polymarket question I keep coming back to is retention and reactivation. @hildobby’s Polymarket retention cohorts (Dune) give a few clues measuring active-address return behavior. This is not new-user retention. It measures whether active maker/taker addresses came back in later months. In Sep-Oct 2025, multiple older cohorts woke back up: * Aug 2024: 18% → 31% * Oct 2024: 17% → 29% * Nov 2024: 18% → 30% * Dec 2024: 23% → 35% * Jan 2025: 20% → 30% * Mar 2025: 29% → 40% That looks less like one mystery cohort and more like a platform-wide reactivation wave. What pulled them back? * ICE investment? * U.S. relaunch buzz? * Airdrop tease? * Referral incentives? * Product changes? * Something else? Polymarket’s growth looks less like one magic lever and more like a stacked incentive system. Only Polymarket knows the full recipe. But the breadcrumb timing helps tell a story. On User Depth and Orchestration Looking at the results, it becomes clear that these are less one-off growth hacks and more a musical score. @etheroin drops a useful breakdown: * 2.69M total users * 910K+ wallets traded under $100 * 35K users crossed $100K volume * 5,798 wallets crossed $1M volume Scans like a wide but shallow pool. A lot of people touched the product, only about 1.4% crossed $100K in volume. That is where the next incentive layer gets interesting. Referrals can bring users in. Fee-share can reward trading behavior. Maker and taker rebates can deepen liquidity and activity. Airdrop buzz can pull dormant users back and give them a reason to learn the system. Strings, horns, bass, percussion. Different instruments. One score. This is where Polymarkets’ “growth pull” compounds yet again. Builder Scorecard Judge the incentive by the user it keeps. Most growth programs measure the easiest thing to fake. They count arrival but they miss return behavior. Polymarket’s stack spans affiliate clicks, first deposits, fee-share referrals, liquidity rewards, maker rebates, taker rebates, airdrop buzz. Here is a scorecard for growth teams: * Did the user return? * Did they generate fees? * Did they trade or use the product more than once? * Did they show up again after the event ended? * Did the partner bring the right user segment? * Did the program create reactivation? * Did the incentive create farming? * What are the LTV and CAC per cohort? Clicks tease intent. First deposits signal commitment. Maker and taker rebates add depth. Airdrop buzz makes the surface harder to read. But the score is never finished. Each cohort asks again: who came back? why they came back? and what they were worth? I am opening 1 advisory slot this summer for teams building growth systems that need the whole orchestra to hit on time. If this problem has started showing up in your dreams, the answer is probably buried in the options. DM me on 𝕏. Let’s excavate it. ### Who Owns What? A Look at Token Rights, Disclosure and Enforceability URL: https://www.furthermore.co/who-owns-what-a-look-at-token-rights-disclosure-and-enforceability/ Published: 2026-05-04 Tags: token rights, transparency, decentralization, open source, verifiability Excerpt: Under the microscope with new token frameworks from Aragon, Blockworks, DefiLlama, and ideas for the adoption path ahead Body: Many tokens suggest ownership, but few deliver it. When things break, holders quickly realize control sits elsewhere and their rights are limited or unclear. Millions of token projects have been created. Jeff Dorman argues fewer than 20 are investable where traction and value capture draw the line. To understand traction and value capture, we need to look deeper, because if projects promise a more distributed and fair future and expect talent and capital to organize around it, those claims should be verifiable. This post examines the current landscape of token rights, disclosure, and enforceability, and offers ideas to compound transparency and ownership going forward. The Cost of Illusion Blockchains promised openness and new forms of control. We got some, along with new layers of confusion and extraction. First, the utility illusion. Most tokens are launched too early and sit outside the core product-market fit loop. They don’t drive sustainable usage or capture value and end up being just exit liquidity instead. Second, the risk illusion. When control structure is hidden, only a few people can evaluate it. That limits scrutiny and concentrates risk. We’ve seen this with KelpDAO’s verifier setup and Step Finance’s key compromise to name a few. When the control structure is visible, more eyes can test and challenge it early. That doesn’t mean exposing individual signers or keys. It means showing the shape of security: how many independent parties are required, what checks exist, and whether any single actor can act alone. Third, the ownership illusion.Perceived rights diverge from actual control. Most founders start with good intent, but conflict and pressure push decisions toward short-term survival, and the system strays. Last year was a wake-up call on who really owns what. Circle acquired Axelar’s team and IP, leaving AXL holders out. Aave DAO conflicts pushed out ACI, BGD, and Chaos Labs, shrinking distributed professional oversight. Coinbase acquired Vector.fun while TNSR holders were left with souvenir coins. These outcomes may be good or bad depending on your perspective. The point is different: many tokenholders understood the situation differently than it played out. These aren’t rare cases. They’re just the ones that surfaced and reveal a deep gap between belief and enforceable power. Soon the Digital Asset Market Clarity Act will codify minimum disclosure requirements on control, decentralization, related-party deals, IP and offchain ownership, and supply mechanics. But there’s no reason to wait for the minimum standard. Three Ways to See Rights, Disclosure and Enforceability Today The tools to fix this have arrived, yet adoption is somewhere near the crawl-walk stage. Aragon’s Ownership Token Framework (OTF) reads the code. It verifies what rights are actually enforceable onchain. Blockworks’ Token Transparency Framework (TTF) reads disclosures. It shows what teams choose to reveal about structure, supply, and relationships. DefiLlama’s Token Rights Framework (TRF) maps governance, economics, and ownership into a structured lens. Chart 1: Overview High level, Aragon offers the strongest onchain verification and integrity with a clean UI, but requires more effort and can have incomplete fields. DefiLlama sits in the middle with simple, structured inputs embedded in a rich data ecosystem, though verification is lighter and the UI may overwhelm institutions. Closing it out, Blockworks relies on voluntary disclosures, highlighting teams that actively prioritize transparency. Its strong media and events distribution amplifies visibility. The experience starts clean, but tails into dated-feeling PDFs. Which one works best depends on what you value. Most importantly, all three agree transparency and ownership matter. Side by side, a few important distinctions are more noticeable. Chart 2: Detailed Comparison Table. Scores Hide Risk? Aragon and Blockworks frameworks summarize results with scores. Aragon uses a 0–13 score to measure what a token can enforce onchain, focusing on control, value capture, verifiability, and distribution. Blockworks uses a 0–40 score across ~18 disclosure items, covering team, token supply, financials, and market structure. At first glance, this feels helpful because a single number simplifies complexity and enables comparison, but it also compresses nuance. Poorly understood scores can create false confidence. In 2008, “AAA” ratings masked toxic mortgages and helped trigger a systemic collapse. FICO masks the danger of over-leveraged elites while locking millions of reliable "thin-file" humans out of the economy. New scoring models also slow adoption given the learning curve and a lack of shared standards. There are exceptions. A 0–100 scale (e..g. Consumer Reports) works like a cheat code because many already understand it from grades, cents in a dollar, and years in a century. DefiLlama avoids scoring. The ethos at DefiLlama is to present the observable facts and let the user score and weight based on what they care about. Take a look at DefiLlama’s Aerodrome token rights here compared to Blockworks and Aragon in Chart 4 above.. In my forensic accounting formative years, we lived in GAAP accounting, SEC filings, and company documents. We had scoring systems too, but specific to our own biases. Rarely did two analysts score the same facts the same way. Custom scoring feels too early for blockchain systems, when we need to get the ground truth right first. Yes or No Truth Clarity can accelerate when answers are binary. “Yes” or “no” shifts the burden to projects to meet clear standards and helps remove interpretation drift. Binary disclosures with linked rationales can achieve much of the mental shortcut desired from the scoring system. They let the user decide what's more valuable to them without the learning curve Here are five example questions better suited with a binary format (+ more in the addendum): * Y/N - Do tokenholders control supply and emissions? * Y/N - Do tokenholders control treasury allocations and strategy? * Y/N - Is protocol core logic executed transparently onchain? * Y/N - Is the token censorship-resistant (cannot be blacklisted)? * Y/N - Is team ownership below 25% of tokens? Chart 5 is a look at EtherFi’s treasury, through 4 different approaches. Imagine scanning 20+ fields on one screen. What helps you “get it” faster? Each answer should include proof: contracts, wallets, or documents. No proof should default to “no.” Make Trust Portable Even with better disclosures, one problem remains: distribution. If information is hard to find or interpret, it won’t scale. Other industries solve this with simple, recognizable badges that make trust portable. * Good Housekeeping (1909): ~5,000 yearly; product badge testing and guarantee * Certified B Corp (2006): ~10,000 firms; company badge signaling profits with purpose * USDA Organic (2002): $100B market; food badge marks food grown without synthetic inputs * Energy Star (1992): 80% American households; appliance badge, highlights top-tier efficiency * UL Mark (1905): 22B yearly; parts badge certifies safety through pass/fail testing The pattern is a clear standard, verifiable criteria, and broad distribution. Our industry lacks this. A simple, portable mark tied to rights, disclosure and enforceability could travel across exchanges, wallets, and data platforms. It could sit next to a token everywhere it appears. Not as marketing, but as a pointer to truth. Let Users Shape the System Standards improve when participants help shape them. A nominal submission fee can fund a small treasury for ongoing bounties. Every decision is public, verifiable, and incentivized for truth. Anyone can flag issues. Higher-signal contributions can stake stablecoins for priority, with slashing for bad actors. A predictable participative loop can support this: submit → review → accept/reject → appeal → publish → public bounty → repeat Long term, a co-op model could govern it, similar to the early Visa card network, but with Aragon, DeFiLlama, Blockworks, exchanges, and wallets as the guiding tenants. Where This Leads We’re still struggling with errors, exploits, and scams, but much of it is avoidable. We’re working with the most powerful tools for transparency ever created. If we apply them well, they snowball and become unstoppable. Token projects need to make transparency table stakes, not just for postmortems. Appreciation to Aragon, Blockworks, and DefiLlama for pushing their visions forward. Keep going. The next step is coordination: turning different maps into one compass. That’s it for now. If I missed something or got it wrong, let me know on 𝕏. =============================================== Addendum: After reviewing the three frameworks, a few additional areas stood out that may be worth considering. I haven’t gone deep on each, but the ideas are here for the taking. Binary yes or no truth questions: * Do tokenholders control fees? Y/N + links * Do tokenholders control incentives? Y/N + links * Do tokenholders control buybacks? Y/N + links * Do tokenholders control the project’s IP? Y/N + links * Do tokenholders control the project’s frontends? Y/N + links * Do tokenholders control protocol changes? Y/N + links * Are the protocol-issued assets (stablecoins, etc.) censorship-resistant (cannot be blacklisted)? Y/N + links (consider Pharos blacklist tracker integration) * Do cross-chain messages require multiple independent verifiers? Y/N + links * Do user fund movements require approvals from outside the core team? Y/N + links Other potential questions: * System circuit breakers? * Audit status with links? * Risk disclosures: exploits, litigation? * Revenue quality: organic vs incentives? * Liquidity dependence: organic vs incentives? * Governance activity (12-month volume)? * Oracle dependency and control risk? ### “Growth Pull”: Lessons from Hyperliquid, Venice, and Canton URL: https://www.furthermore.co/growth-pull-lessons-from-hyperliquid-venice-and-canton/ Published: 2026-03-24 Tags: growth flywheel, web3, HIGIS methodology Excerpt: Crypto isn’t broken. Some things just don’t stick yet. A few systems seem to work differently. Here’s a simple loop that might explain why. Body: Beyond a few killer apps, crypto adoption has been brittle over the past few years. Too many products spike on incentives, then fade when rewards dry up. People try it, but don’t stick around. Growth stalls because it’s not spreading. And there aren’t many true believers pushing it forward. In practice, many product teams optimized for the surge, but not the retention. Yet a few systems have transcended that loop. Hyperliquid grew TVL from about $2.0 billion to $4.1 billion, and cumulative perp volume from $617 billion to $3.55 trillion. Venice AI grew from 400,000 users to 2 million. Canton Network grew from 24 to 850 validators and $6 trillion in cumulative RWA flow. These outlier systems turn use into juice, and make that juice compound. Strong hooks pull users in, good experiences keep them, and distribution begins stacking on itself. Ideas old as time, yet easier said than done. A simple name helps. Call it Growth Pull. Users come for a job to be done. The system gives them a reason to stay. Then it gives them a reason to care more. The best loops convert activity into aligned upside, and aligned upside into better liquidity, access, or coordination. Growth stops being borrowed and becomes self-reinforcing. This post tries to distill a pattern I’ve noticed, into a simple five-stage loop. * Hook - core action, immediate benefit * Ignition - initial distribution sparks network effects * Gravity - deepens engagement, increases user value * Integrity - reinforces reliability, fairness, trust * Scale - expands reach and adoption through new channels/integrations I’ve been studying and sharing growth loops at @0xJMG. This post focuses on early-stage bootstrapping loops, not long term durability and builds on the earlier sensemaking work from Sarah Tavel, Lenny Rachitsky, and Andrew Chen - check them out. Early loops aren’t forever. Google and Facebook rewired theirs frequently as they scaled. Hyperliquid is retail at full power. Users trade perpetuals with CEX-like speed, deep liquidity, leverage without giving up permissionless access. The hook lands instantly. It delivers what traders thought was out of reach. Then the growth loop kicked in. Share PnL, invite friends, collect points, and the most committed stack in the HYPE airdrop and fee discounts. That sequence turned trading into social proof and social proof into distribution. Referrals and PnL screenshots became free billboards across social media. The platform benefitted as users had a reason to show their work. In 2025, Hyperliquid’s network revenue rose from about $10 million to $884 million. Monthly active wallets went from 61,000 to 291,000. Month 3 retention averaged about 21.1%, and month 6 about 11.6%, several times higher than venues like Drift or Curve to name a few. Venice solved a different problem. Its hook was private, uncensored AI. That tapped into growing frustration in the AI stack. Builders and users want capability, but also privacy and independence. Venice paired that demand with a token access model. Users could stake VVV for premium access, mint DIEM for API usage, and remain exposed to the network’s upside. The product felt less like a subscription and more like a stake at the table. AI usage usually accrues value upward to the platform. Venice bends that value back to participants. Usage kicks off ownership, and ownership reinforces usage. Venice reported registered users grew from about 400K in Jan 2025 to 2M by Feb 2026. The network reached ~170M API calls in 2025. Around 68% of VVV supply was staked by March 2026, earning yield. These compounding metrics point to a reinforcing behavioral loop. Canton shows a similar pattern in institutional form. Canton’s hook is private, regulatory-aligned coordination for issuing, financing, moving and settling digital assets. Institutions adopt when systems feel reliable and counterparties are already there. Its growth loop compounds through counterparties, assets, and validator participation. More assets attract more institutions. More institutions attract more counterparties. More coordination drives more fees, more validator economics, and more reasons to deepen involvement. Canton reported cumulative RWA volume rose from about $3.6 billion to $6.0 billion. Daily active wallets rose from roughly 30 to 27,000, then to 77,000 by March 2026. Daily fees burned are sitting around $1.5 million to $1.7 million. Super validators grew from 17 to 43. The investor and partner roster includes firms like DTCC, Nasdaq, Broadridge, BNY, and Goldman. This is crypto growth through embedded institutional gravity. So what connects these three? Hyperliquid pairs performance and access with ownership. Venice pairs private AI utility with ownership. Canton pairs institutional coordination with ownership-like participation and economic alignment. None offer full ownership, but the degrees do matter. Each system automates alignment, coordination, and incentives. Each starts with a clear hook, builds value, earns trust, then grows while retaining what it creates. The loop keeps going. These outliers follow a pattern. Start with a simple hook people want. Make it easy to spread. Make it better with each user. Make it rewarding to stay. Scale without leaking value. Hook. Ignition. Gravity. Integrity. Scale. That is Growth Pull. Done right, systems compound faster, ownership spreads, and attention amplifies what nourishes the loop. If I missed something or got it wrong, let me know on 𝕏. This post uses public data from DefiLlama, Token Terminal, and respective project's self reporting. Corrections welcome. Not investment advice. Some Hyperliquid, Venice, and Canton parts are private, and risks may not be visible. No risk assessment was performed. ### A 48-Hour Sprint In AI Tools URL: https://www.furthermore.co/a-48-hour-sprint-in-ai-tools/ Published: 2026-03-11 Tags: AI tools, automation Excerpt: Scratching the surface of how solo builders wield team-level power with off-the-shelf AI tools (non coder field notes) Body: (the non-coder field notes) Why I’m Doing This If you’re already deep in AI automation, you should probably skip this. If you’re AI-curious and figuring out where to start, this might be for you. I am curious about the AI revolution underway and I’d rather explore it hands-on than read about it. I’m a business and ops guy, not a coder. This is savage fish-out-of-water territory for me. Writing this as a field journal of the twists and turns. The Opportunity We are drowning in productivity porn; tools, demos, prompts and endless “ten ways to defeat ninjas with pantomimes” threads. Hamsters in a high-tech wheel, running faster but still in the same cage. Founders want talent that bring new superpowers and help upgrade the team. They are already climbing Everest, and new AI-native teammates are the extra oxygen needed to make summit. The ceiling for solo founders is disintegrating in front of us. AI now lets one builder ship what once required a full team. A few early examples people are buzzing about: PhotoAI makes studio headshots from a laptop. PDF .ai turns documents into conversations. BoltAI places a GPT copilot in your Mac menu bar. The one-person software company has arrived, and this is just part of the freshman class. Learning by building beats reading about other people building. That’s the path I’m exploring. Each project answers a question and exposes the next one. At times it feels like meandering through the dark, but doing the work turns the lights on one step at a time. This path is for people who want to craft the machine, not dissappear inside it. Thats the hope. My approach Last week I ran a 48 hour sprint to learn new tools and understand how they connect. Many were completely new to me. The goal was to build a small pipeline that listens to Telegram channels, scans the web for related leads, and stores the results in a database for AI analysis. AI brains 1. Gemini → AI command center for research, planning, tool navigation, task coordination. 2. Venice AI → privacy-focused AI hub to access multiple models without exposing personal data 3. NotebookLM → source-grounded research repackager engine: turn documents into podcasts, slides, summaries. 4. Google AI Studio → model experimentation lab for testing models, prompts, workflows, large-context analysis. This is the place to vibe code. Data pipeline 1. Telegram API + Telethon → channel listener to monitor Telegram channels and extract insights automatically 2. Firecrawl → web data ingestion engine to scrape pages and send structured data to Firestore System infra 1. Firebase Studio → full-stack construction site (cloud), IDE to build production apps, manage Firestore databases, and deploy web hosting. 2. Google Antigravity → agentic mission control (local), specialized IDE for orchestrating autonomous AI agents that independently navigate files, terminals, and browsers. 3. MCP (Model Context Protocol) → AI-to-workspace bridge, let AI read files, logs, and run fixes 4. GitHub → project flight recorder, track code changes and milestones over time Like many, I’ve been stuck in the Claude vs Gemini vs ChatGPT analysis paralysis loop. For this sprint I leaned deep into the Google stack, with Venice AI as a side tool for pet project experimentation. I figured if the tools live in the same ecosystem, the integrations might compound the benefits. The jury is still out on whether the tradeoffs are worth it. More below… I used Google Gemini as mission control. It helped me navigate the AI stack, organize tasks, delegate work, research and brainstorming. At times it even acted like a tag-team cofounder that checked whether I completed the day’s tasks - and I appreciated this! Frustratingly, I ran into noticeable context drift even on the highest Gemini Ultra tier plan. A sober reminder that different models may be needed for different jobs. I’m uneasy about how much data we casually feed AI. It feels less like if it leaks, and more like when? Venice AI aggregates 20+ models into one interface and lets you log in with a Web3 wallet, no email or personal information required. Pro access comes from staking VVV tokens or minting DIEM tokens for API use, both fully exit-able at market value. I haven’t explored the API deeply yet, but the runway is laid for future projects. I used Google NotebookLM as a research repackaging engine. You feed it documents and it turns them into podcasts, videos, slide decks, flashcards, and infographics. Pretty impressive. The key difference is that it runs in a closed loop. It ignores the messy open web and only analyzes the sources you upload, which keeps the answers grounded and reduces hallucination. I kicked the tires on Google AI Studio, which feels like a powerful lab for testing models, workflows, and large-context data analysis. Huge context window and “vibe coding” stand out. At times I wondered why it’s separate from Gemini. Then I realized the limit wasn’t the system, it was the size of my question and needs. I used the Telegram API to tap into Telegram channels I already follow, and the Telethon Python library to automate the tedious parts. Instead of me manually scrolling through channels and copying messages, Telethon listens to the channels around the clock, pulls out the leads I care about, and passes them to the rest of the workflow. I used Firecrawl as the data intake engine that turns the messy web into clean, usable data. It cuts through pop-ups, cluttered layouts, and other obstacles that usually block bots. I used it to search the broader web for topical leads. Instead of returning a list of links like a search engine, Firecrawl visited each page, read the content, and extracted the actual information I needed, then sent that data directly into our Firestore pipeline. I used Google Firebase Studio as the workspace (IDE/Integrated Development Environment) where the software gets built and run. It’s where I wrote code, managed the database (Firestore), and hosted the automation. You can also build production grade apps here though I have not gone that far yet. I initially started working locally in PowerShell on Windows, but quickly moved to Firebase Studio in the cloud because it proved more robust and flexible for my needs. Sadly, I did not get around to using the Google Antigravity specialized IDE for agent-first orchestration and parallel workflows. But that should land in forthcoming endeavours. Most AI today is like a “brain in a jar.” It can think, but it cannot touch your tools. That forces humans to play courier, copying errors into chat and pasting fixes back into code. I used Anthropic’s Model Context Protocol (MCP) which fixes that by giving AI eyes and hands inside the project. It can read terminal output, check logs, diagnose problems, and run fixes directly. The goal is turning AI from a chatbot into a working collaborator. Candidly, my first attempt still felt like manual copy and paste more than a smooth MCP pipeline. But friction teaches. The next project should run smoother. In theory I should have thoroughly used GitHub as the project’s flight recorder, logging every code change and milestone for the final post-mortem. I did the pre flight check but dropped the ball here. Several moments turned into long debugging sessions just trying to get the basics of other tools working, and suddenly the days were gone. What Worked, What Didn’t, Where Next? No big deal. Progress happens one inch at a time. Four days ago most of these tools were a mystery to me. Now they’re familiar. The next PRD and workflow is going to be 🔥. You’d expect a big reveal after a post this long. But not yet. It’s still a beautiful mess. Things I’ll be working backwards from in the next sprint: * A tighter PRD to keep the LLM focused. * A smoother MCP pipeline to escape the copy-paste loop. * Exploring Antigravity for automation and scouting * An interesting deliverable worth sharing. There are probably easier ways to approach this kind of work and if you’ve built similar pipelines or found better methods, I’d love to compare lifehacks. ### That’s My Quant: Indexing the DeFi Stablecoin-Network Frontier URL: https://www.furthermore.co/thats-my-quant-indexing-the-defi-stablecoin-network-frontier/ Published: 2025-09-23 Tags: stablecoin networks, ETF, DTF, stablecoins, DeFi, open money Excerpt: Stablecoins are eating finance from the inside out. DeFi designs bring composability superpowers while fiat is suffocated by rent extraction and systemic drag. The OPEN Stablecoin Index tracks this frontier and lets time and governance do the compounding. Body: An index is a lighthouse in volatile seas. The Open Stablecoin Index ($OPEN) started with a simple thesis: track the next-gen networks building programmable money, then let time and governance do the compounding. Built on Ethereum using Reserve’s Index DTF rails, OPEN runs as an equal-weight basket of stablecoin governance tokens with quarterly rebalances (see current basket here). The method is deliberately simple, which is exactly the point. Think of OPEN not just as an index but as a programmable primitive, composable in ways no traditional ETF can match. On September 18, I sat down with fellow stablecoin enthusiasts — Nick from 512M Research, Joe from Pangea, and Gerrit from Curve Finance and Leviathan News. We compared notes on OPEN: what it buys, how it rebalances, where methodology should evolve, and how governance can harden. Below are highlights you may find a useful addendum to the recorded conversation. Why an Index Now Dollar-pegged stablecoins dominate onchain settlement. USDT sits above $170B and USDC near $74B, pulling liquidity into their orbit. Supply is still mostly dollar-denominated, yet the design space is in its 1st generation infancy. Regulation is catching up. The GENIUS Act now defines rules for centralized payment stablecoins, while decentralized ones remain outside scope for now. Broader clarity is expected by summer 2026, covering categories, reserves, governance, and decentralization. The U.S. Treasury projects stablecoins could expand to roughly $2 trillion by 2030, a tenfold jump from early 2025. Macro adds fuel: the Fed’s September rate cut rekindled risk appetite and onchain credit. Lower yields squeeze centralized issuers’ T-bill carry, in due time will push focus toward decentralized models that monetize secondary activity instead of bank interest. Pragmatists want one-shot exposure to leading stablecoin ecosystems. Allocators tracking headlines still lack a clean, direct way in. DeFi stablecoins remain smaller, but they ride the same wave and drive frontier experimentation. Nearly every $OPEN constituent is shipping new features in the next 12 months. Early adopters capture alpha, while TradFi and regulators can integrate designs already stress-tested onchain. Rising liquidity lifts every protocol that can float. The OPEN Indexing Case Indexing accepts that single names can drag the market, or worse. Programmatic weighting spreads exposure across multiple economic engines and tames the urge to “diamond-hand” a future zero. Active selection chases sharper factor bets with higher risks, but a passive index cushions drawdowns and captures upside. Quarterly rebalances lock in gains from tokens that run ahead and top up those that lag, delivering a simpler process with far less psychological overhead than constant token picking. Transparent onchain governance makes changes legible. Proposals, votes, and method tweaks are recorded onchain, reducing key-person risk and clarifying why constituents enter or leave. Over time the rules become the strategy, and the compounding comes from index discipline when sentiment swings. What OPEN Actually Buys OPEN tracks governance and ownership tokens of decentralized stablecoin networks. Its mandate emphasizes transparency, composability, and user-led governance. These include protocols where stable money is either the core product or the lubricant for the broader business. Examples: Aave has GHO, but its main draw is the lending engine. Curve powers global stablecoin liquidity, while crvUSD adds stability optionality for collateral. Even centralized stables began as accelerators, not businesses. Before rates became a profit engine, USDT drove Bitfinex volumes and USDC boosted Coinbase and Poloniex. At launch, these tokens were extensions of exchanges, not standalone ventures. OPEN’s role is to track decentralized stablecoin demand wherever value accrues. The Backtest, Read with Adult Supervision 512M’s reconstruction asked a simple counterfactual. What if OPEN had launched in 2021 and followed its current rules through today? The headline result surprised even seasoned crypto veterans. In the four-year backtest, OPEN outperformed ETH by a wide margin, +745% total return versus +487% for ETH. That translates into almost double the annualized return, 37% compared to 17%. By resetting each quarter, the index took profit from tokens that ran ahead and added to those that fell behind, while ensuring no single token could sink the basket. 512M’s take: excess return beyond simple ETH beta. Measured against ETH, OPEN shows stronger risk-adjusted returns across every ratio. * Sharpe (0.49 vs 0.24) shows returns are earned more efficiently per unit of total volatility. * Sortino (0.70 vs 0.33) highlights stronger protection from downside risk. * Calmar (0.43 vs 0.18) underscores better rewards relative to maximum drawdowns. * Treynor (0.45 vs 0.15) demonstrates three times the excess return per unit of market risk. A “high-beta ETH trade” is an asset that simply exaggerates ETH’s moves, rising faster in rallies but crashing harder in pullbacks. OPEN is different: its performance profile shows it adds genuine diversification, making it a true portfolio building block rather than just levered ETH in disguise. For context, 5-year Sharpe ratios sit around 0.89 for the S&P 500, 0.70 for the Nasdaq Composite, and 0.73 for the Nasdaq-100. Backtests are useful signals but come with limits. Running today’s basket retroactively bakes in survivorship bias: failed tokens like Terra Luna never appear, making returns look stronger than they would in real time. It also assumes governance would have made the same inclusion choices years ago, which is unlikely. A more faithful approach is to simulate historical inclusion rules with delistings, drawdowns, and token deaths factored in. So treat backtest results as directional, not definitive. Most importantly, this post is not financial advice, and nothing here should be taken as a signal to buy OPEN. Methodology, and How it Might Evolve OPEN rebalances quarterly, balancing drift, execution costs, and governance overhead. Equal-weighting gives smaller constituents a chance, but alternatives are debated: inverse market-cap weighting, “gem index” tilts, or partial shifts into yield-bearing stables. These strategies aim to be rules-based smart beta. Market-cap weighting works in TradFi, but with only ten tokens would it hollow out OPEN, since investors could just hold the top three directly and skip index fees? Scaling adds challenges. Rebalancing trades risk moving prices. That’s why CoW Swap auctions pool liquidity for MEV-protected trades within preset bounds. Liquidity screens must scale with market cap to avoid slippage. Bands also matter: current 1% and 40% limits keep small tokens alive but risk churn. 512M’s analysis suggests widening to 5%–45% and testing semiannual rebalances for efficiency. Constituent emissions need scrutiny too. Inflation that outpaces adoption dilutes value. Governance should weigh unlock schedules, reward flows, and whether emissions land in real sinks like staking or buybacks. Programmatic, onchain emissions align with OPEN’s bullseye; opaque, offchain ones drift further. OPEN’s methodology is a draft. Weighting, cadence, liquidity, and emissions all remain open to refinement through governance. Why Decentralized Stables? Centralized issuers dominate distribution, scale, and TradFi access. But permissioned minting slows usage, blacklist controls create freeze risk (problematic for the budding agentic economy) , and reserves rely on monthly attestations. Revenue comes from clipping bond coupons, a model regulators resist sharing with users. Decentralized stablecoins flip the logic. They audit collateral every 12 seconds and monetize crypto volatility across cycles. When prices rise, users mint against growing collateral, generating fees. When prices fall, liquidations and trading lift keeper and AMM revenue. These programmatic flows create yield from market activity itself. The kicker: DeFi income moves opposite to centralized issuers. Falling interest rates shrink TradFi margins but boost demand for leverage, CDP minting, and onchain fees. These yields flow back to users and DAOs, enabling decentralized stablecoins and flatcoins to pressure centralized moats bound by rent seekers. Let’s look at the potential for non-USD stablecoins, Euros and Swiss francs as an example. Demand is rising, but centralized issuers can’t make the math work. Near-zero or negative rates in Europe mean short-term bonds lose money, collapsing their model. Decentralized designs don’t face this constraint. They use onchain collateral and programmatic fees to support pegs in any rate environment. crvUSD and BOLD already prove fiat-pegged tokens can run entirely on decentralized collateral, free from bank deposits or government debt. The agentic angle. Agentic AI won’t line up for KYC. It will spin up thousands of currencies, trade, shut down, and respawn. Central issuers choke on this workflow because mint and redeem run through compliance gates. Decentralized stablecoins fit machine-to-machine economies, letting agents mint, post collateral, and settle instantly without permission. Composability is the Sleeping Giant? Traditional ETFs sit under a single supervisory rule set across gatekeepers, limiting borrowing, option writing, and lending. Onchain indexes have more optionality, plugging into protocols as collateral, LP or vault receipts, and governance. Onchain crypto has already proved this with the DeFi Pulse Index ($DPI), which hit ~$200M in 2021. Aave listed DPI as collateral, showing an index token can serve as usable money in DeFi, not just a passive tracker. The breakthrough is consolidation: Instead of juggling ten volatile positions, each with different loan-to-value ratios and risk rules, one index position gives you diversified exposure under a single collateral umbrella. It simplifies borrowing, smooths risk, and frees up mental bandwidth. That’s the “a-ha!”: less overhead, same exposure, and better capital efficiency. Composability then takes it further. You can hedge or shape exposure however you like. For example, hold the index for upside, short a perp to dampen drawdowns, or pair with yield stables to cover funding. Other builders can wrap these into structured products targeting income, lower volatility, or capped downside. Permissionless design accelerates the cycle. Governance, Incentives, and the Bribe Question Where there is voting power, bribes are not far behind. The Curve wars have already industrialized vote markets, so should OPEN expect copycats if market cap grows? Bribes were flagged as both a potential feature and a risk. On one hand, they already exist across DeFi governance, and protocols eager for inclusion in OPEN may see it as rational to pay governors. If aligned with long-term incentives, such bribes might even help grow market cap without compromising outcomes. On the other hand, they carry obvious dangers: turning index governance into pay-to-play, encouraging the addition of low-quality tokens, and undermining the credibility of the methodology. The challenge is whether incentives can be structured so governors capture upside from a stronger index rather than short-term bribes. OPEN-governance may also need governance hardening. When the SQUILL governance token market cap is less than the OPEN index market cap, a hostile buyer could try to rush a vote that stuffs the basket with low-quality tokens. This is a call to action on periodic risk analysis of quorum, time locks, and veto parameters. What to Include Next The point of OPEN is to track economic centers as they migrate, in a decentralized way. Tokenized CRCL equity is tempting but risks jurisdictional snarls and is far outside OPEN’s mandate of transparency, composability, and user-led governance. A live question: should OPEN also include infrastructure protocols that materially expand stablecoin liquidity, utility, or safety? Convex is a candidate. The test: is the impact measurable onchain and tied to stablecoin flows? An ongoing monumental task for the community is sharpening methodology rules. Clear rules of the road, consistently applied, often become the highways that enable wider scale and collaboration. OPEN is both ticker and narrative. It tells the story of decentralized stable-money infrastructure eating legacy finance from the inside out. OPEN runs without a CEO or company, powered purely by smart contracts and community. Come for diversification, stay for composability. This post is an open invitation: if you have sharper ideas, join us in refining this onchain index experiment. Follow on 𝕏, see what’s new in OPEN governance and drop into the OPEN Secret Admirers chat. Or mint $OPEN to climb the learning curve faster! ### Diversify & Chill: Index Funds 3.0 URL: https://www.furthermore.co/diversify-chill-index-funds-3-0/ Published: 2025-02-02 Tags: ETFs, DTFs Excerpt: Index funds reshaped markets—now they expand onchain. The next BlackRock will not look like today’s. From Wall Street to all streets: open, borderless, and endlessly customizable Decentralized Token Folios (DTFs). Capital goes where attention flows. Body: Financial markets are one of humanity’s most ambitious inventions, steering capital to fuel progress and amplify prosperity. They fund breakthroughs in medicine, construct hospitals, schools, and housing, build energy grids, deliver water and food, and connect billions worldwide. For centuries, financial markets were gated fortresses for elites, while the everyman peered in from downstream. The early 20th century introduced mutual funds, an actively managed prequel to passive investing that provided diversification and automatic reinvestment, though at a cost. Then came the seismic shifts: (1.0) passive index funds, slashing fees and broadening exposure, followed by (2.0) Exchange Traded Funds (ETFs), delivering intraday trading, tax efficiency, and retail accessibility. Each phase dismantled barriers, unlocked access, and reshaped wealth creation. Now, the $3.5T digital assets market and the $120B DeFi ecosystem are reshaping money, investing and banking. With secure, transparent transactions on public blockchains without costly or risky middlemen, the stage is set for the (3.0) leap, Decentralized Token Folios (DTFs) which bring structured products onchain, fully permissionless and open to all. DTFs in a nutshell deliver the benefits of ETFs plus: * For users: Easy, 24/7, borderless access to themes, sectors, and algorithmic strategies. * For finance builders: Flexible index creation, remix-ability and DeFi trading. * For society: Distribute owner governance power to preserve competition and ensure vibrant, equitable free markets. This deep dive draws on insights from TradFi and DeFi veterans Kelly Ye, Chongwu Du, Reilly Decker, and Matthew Graham. Their insights, refined through experience at Fidelity, Goldman Sachs, CoinDesk Indices, IndexCoop, TokenLogic/Aave, and Securitize, were invaluable in shaping this post, though not an endorsement. Let’s not keep brilliance waiting. Three Financial Revolutions Financial markets power $100s of trillions in global assets across commodities, stocks, bonds, foreign exchange, derivatives, real estate, insurance, cryptocurrency and more. They're humanity's engine for progress, turning ideas into productive jobs, products, and wealth for many. The New York Stock Exchange (NYSE) alone accounts for $28 trillion in value since its 1817 launch, with 30+ other exchanges operating in the US. When markets freeze, progress dies, just ask the 1930s or 2008. The NYSE took 200 years to grant regular people access through layers of middlemen. Digital assets are revolutionizing direct ownership at an extraordinary pace, enabling users to become owners in seconds, from anywhere. Index funds revolutionized old markets by cutting investor costs more than 90%. Digital assets are revolutionizing new markets by cutting entry barriers to near-zero. Wall Street's evolution from 1817's paper ledgers to today's regulated electronic exchanges tells us what's next: digital assets will speed-run centuries of financial evolution within a few decades. Three waves of financial democracy turned $10,000 minimum stock buys into $100 ETF trades: * (Prequel) Mutual Funds unlocked Wall Street for the middle class in 1924. * (1.0) Index Funds exposed active management's fee trap in 1971. * (2.0) ETFs shattered trading barriers in 1993, letting anyone trade billion-dollar portfolios quickly and turning stock-picking into buying the whole market. John Bogle summed up passive index investing, “Don’t hunt for needles. Buy the haystack.” What does this look like in action? A teacher in Argentina, using a local trading app, invests in an Emerging Markets Index fund backing growth in India, China, and Brazil without dissecting individual stocks. In the Philippines, a student taps into the power of sector compounding by starting with an ETF. Bond-focused funds finance Brazil's schools and healthcare centers, while clean tech indices empower Indian solar innovation. While these trades favor well-banked users with stock trading accounts, the funds still coordinate significant capital, compounding network effects across vital sectors. History drops a useful hint about the next revolution in financial democracy, an intersection of crypto and indexing. In 1924, mutual funds launched into a regulatory void, burning investors for 16 years until the 1940 Investment Company Act transformed chaos into trust. Fast forward: Crypto hits its own 16-year mark, already surpassing $3 trillion. As government regulation hints toward embracing blockchain in 2025 and beyond, we're watching the same movie. Traditional funds took decades to reach $10s of trillions in regulated assets. Crypto's digital rails could crush that timeline and open to billions more users. From Elites to (Almost) Everyone The American stock market’s emergence (1792–1900) fueled industrial growth, enabling businesses to raise capital and investors to build wealth. While elites and institutions dominated early participation–high risks, limited access, and knowledge gaps restricted broader involvement. Technological breakthroughs, like the telegraph and ticker, accelerated trading, while industrialization drew more businesses and investors into the fold. By the 1920s, mutual funds offered smaller investors access to lower cost diversification and professional management. The 1929 crash exposed speculative excesses, spurring demand for safer, regulated options. Reforms like the 1940 Investment Company Act mandated transparency, reducing conflicts of interest and bolstering trust in mutual funds. Initially a domain of the wealthy, mutual funds gradually welcomed retail investors. The 1970s and 1980s marked the institutional embrace of index funds, driven by modern portfolio theory, cost efficiency, and skepticism of active management. The 1974 ERISA Act further accelerated adoption, integrating index funds into retirement plans and highlighting their low costs and diversification benefits. Research later validated indexing's benefits, attracting analytical, self-directed professionals to the movement. In 1993, the launch of SPDR S&P 500 (SPY) transformed index investing with easier exposure to sectors and broad trends. Regulatory changes enabled intraday trading with real-time pricing and tax-efficient fund flows, while the rise of internet adoption and online trading accelerated ETF growth. ETFs attracted active traders, tax-savvy investors, and advisors, while retail investors embraced lower minimums and derivatives traders gained tools for index exposure. The 2000s saw the rise of tech-savvy investors shaped by the dot-com bubble and online forums. These self-directed users blended indexing with selective active bets, fueled by the internet’s democratization of finance. By the 2010s, Millennials fully sent it adopting mobile-first platforms, robo-advisors, copy trading, and values-driven strategies like ESG investing. By the 2020s, personalization and community-driven strategies define investing. Financial apps double down on real-time insights, fractional shares, and robo-advisory tools. Social media and online communities shape decisions, blending personal values with financial goals. Skepticism of ESG funds emerges while thematic ETFs (e.g. Bitcoin) and speculative crypto start capturing increasing attention at record pace. Despite this progress, “there is still a substantial portion of the investment universe that ETFs cannot reach”, Ye reflects in a tokenization deep dive with CoinDesk. Seven Index Construction Strategies Shaping Market Returns Wall Street manages trillions of dollars through index funds, but not all indexes are created equal. While giants like BlackRock and Vanguard dominate traditional market-cap strategies, innovative weighting approaches are unlocking new ways to capture market returns. Du helps frame the discussion “indexing enables broad market exposure by tracking beta (relative volatility to a benchmark) in a cost-effective wrapper.” Consider this your introductory field guide to index construction. For those interested in deeper research and technical specifications, excellent academic work can be found across the internet on portfolio theory and index mathematics. Here, we'll focus on understanding how a few indexing approaches work in practice. A Smart Beta index blends the efficiency of passive investing with active strategies, leveraging alternative weighting to target factors like value, momentum, or low volatility. Let's examine how exotic index weighting evolved through three groundbreaking ETFs: AGG, JAAA, and the record-breaking Bitcoin ETFs. These products showcase how liquid alternatives can transform niche, institutional-grade or emerging assets into accessible investment vehicles that capture sophisticated returns previously limited to hedge funds or degen traders. Traditional bond trading happens in fragmented Over The Counter (OTC) dealer networks, creating a maze of complexity and outright inaccessibility for small investors. Enter the $118B AGG ETF, which transforms this opacity into instant fixed-income access, delivering a 3.4% yield through a single ticker. The $15B JAAA ETF tackles an even more exclusive market, Collateral Loan Obligations (CLOs). By packaging AAA-rated corporate loan portfolios into an exchange-traded vehicle, it unlocks a 6.2% yield from the highest-quality slice of the CLO market. Think of it as owning the penthouse suite of corporate debt, but with the convenience of a regular stock trade. Bitcoin presents a different challenge. While actively traded on crypto exchanges, the technical barriers of wallets, keys, and custody deter mainstream adoption. The Bitcoin ETF solves this by wrapping the asset in traditional market infrastructure. As Ye notes, it's "new wine in old bottles", stripping away the complexity while preserving pure Bitcoin exposure. The market has spoken decisively: Bitcoin ETFs gathered $38 billion in net-inflows in their first 12 months, a milestone that took gold ETFs 6 years to achieve. This ~6x acceleration might just be a hint at what’s to come in the next generation of index products. Passive Index Empires: A Hidden Monopoly Problem Index funds now control 17.2% of U.S.-listed companies, double their ownership from a decade ago and passive investing has surpassed 50% market share. This concentration creates a hidden monopoly problem: The largest players like BlackRock, Vanguard, State Street end up holding dominant voting stakes across competing sectors and companies. This concentrated power recently drew legal action: BlackRock, Vanguard, and State Street were sued last year, accused of climate activism that reduced coal production and raised energy prices. Collectively, they hold over 30% of the biggest coal producers yet were also pushing an ESG agenda with lobbyists and investments. Azar, Schmalz, and Tecu’s 2018 found that common ownership of airlines correlated with higher ticket prices and less competition. Similar concerns exist in pharmaceuticals, where concentrated ownership raises fears of price-setting collusion and stifled innovation. Similarly, the insurance industry has come under intense scrutiny recently, as frustrations mount over coverage denials and cancellations. Borrowing from Brigham Buhler on a recent Tucker Carlson Show: “Guess who owns the majority of the largest insurance companies? BlackRock, Vanguard, State Street. Guess who owns the majority of the pharmaceutical companies? It's BlackRock, Vanguard, State Street. Guess who owns the majority of the media outlets? It's BlackRock. Vanguard, State Street. You start to sense a trend here.” While concentrated governance power can arise with any asset manager, it may be amplified within a single index fund. In all fairness, conflicted actions could harm both index and non-index holdings, and have implications on fiduciary duty. However, the optics of concentrated influence remain problematic, highlighting the need for transparency or regulatory safeguards to ensure fair competition. A potential breakthrough lies in DTFs governed by tokenholder communities, delegates or AI agents. Fully onchain, these indexes improve transparency and resilience with freedom to concentrate ownership while distributing governance power. This structure fosters vibrant and competitive free markets. How AI is Reorienting Index Investing AI is reshaping ETFs and index products with a surge of advanced analytics and operational efficiency. From indexing top AI firms to crafting dynamic, real-time portfolios, its potential to redefine the industry is unreckoned. What innovations are taking center stage? Indexing top AI companies may be the low hanging fruit. The $2.6 billion Global X Artificial Intelligence & Technology ETF (AIQ) tracks a market-cap-weighted index of developed-market equities driving AI and big data innovation. Sentiment analysis uses Natural Language Processing (NLP) to gauge public sentiment from news and social media, influencing thematic ETF creation. Tools like Refinitiv's MarketPsych ESG Analytics process millions of posts daily, identifying ESG violations faster than traditional methods. AI ensures ETFs stay compliant, cutting human error and legal costs. AI-driven smart index construction identifies trends, filters noise, and selects assets using historical and real-time data. The AI Powered Equity ETF (AIEQ) leverages IBM Watson to construct an index of U.S. companies across all market caps. Portfolio optimization leverages machine learning to refine weighting, rebalancing, and cost efficiency by analyzing millions of data points in real time. These algorithms track market signals across asset classes, improving diversification and reducing costs. AI-powered Smart Beta indices aim to outperform traditional market-cap weighting by dynamically leveraging factors like value, momentum, and low volatility. Qraft AI-Enhanced U.S. Large Cap ETF (QRFT) exemplifies this approach, leveraging AI to analyze real-time data and uncover patterns. This real-time adaptability may give QRFT an edge over static, rules-based indices. AI agents autonomously sense, decide, and act to achieve goals. Decker underscores, “AI agents could dynamically adjust index composition to outperform rigid strategies in crypto’s fast-evolving market.” Experiments like Spectral Labs showcase strategies such as overweighting stablecoins in bear markets and Bitcoin in bull markets. Without access to traditional banking, these agents could rely on Decentralized Finance (DeFi) stablecoins, trading and lending markets as critical infrastructure. Onchain AI agents could construct an index to outperform Bitcoin in bear markets and the S&P 500’s 10-year trend, using only DeFi assets, operating 24/7 with zero human intervention. Over time, they could evolve into market makers, deploying efficient, low-risk strategies and governance backstopped by decentralized communities on major parameter or partnership changes. From ETFs to DTFs: Indexing’s New Era Crypto surged to 60 million MAUs in 2024, entering its predictable four-year growth cycle post-Bitcoin halving. By 2026, it could hit 500 million MAUs, just 6% global penetration. Citigroup forecasts $4 trillion in tokenized assets by 2030, signaling vast indexing opportunities. Meanwhile, memecoins, though controversial, thrive as user acquisition tools in onchain-first environments. @LeonidasNFT observes: “We’re in a brief window where institutions struggle to custody memecoins. When this changes, I anticipate they’ll evolve into a trillion-dollar asset class.” Unlike traditional markets, crypto never sleeps, offering 24/7 trading and settlement. Stock settlement cycles compressed from T+5 in the 1980s to T+2 today, but onchain systems push toward near-instant intraday settlement. Permissionless onchain access could shapeshift liquidity, democratized indexing, and social investing and unlocking opportunities for 1.4 billion unbanked adults worldwide. It can foster innovative portfolio creation supporting local communities while expanding global financing. This convergence of onchain user growth, tokenization, and AI creates a perfect storm for innovation. DTFs, the onchain successors to ETFs, vow broader access and customization, unlocking opportunities we’ve only begun to imagine. Startup investing has always been asymmetric but crypto makes that edge available to everyone, offering the potential of 10x to 100x returns traditionally reserved for accredited investors. Ye quips, “crypto flips the startup investing model, enabling capital raising from broad user bases rather than a select few.” Indexing startup portfolios allows passive participation in high-growth opportunities. Early pioneers like SpiceVC and Science Blockchain made bold strides in carving a path through uncharted terrain, but this decade’s DTFs and an improving regulatory climate could bring their vision to life. Next-gen indexing is smarter, faster, and more customizable. AI-driven optimization, Smart Beta strategies, and customized indices redefine possibilities. Imagine DTFs for MicroStrategy’s convertible bond exposure to Bitcoin, JAAA’s CLOs, or fully native ETH staking pools. “The next evolution of indexes will focus on making crypto assets productive, starting with staking and expanding into yield strategies”, Graham points out. DIY indexes could combine these and add startup portfolio exposure. With lower barriers and faster experimentation, winners and losers emerge at unprecedented speed. Who will drive adoption? Early adopters are likely those seeking passive, unfettered access to unconventional assets. If history is any guide, Ethena USDe’s success in simplifying a delta-hedged yield strategy into a single token offers valuable clues. Likely candidates include retail investors, family offices, hedge funds, and pension funds. What sets next-gen indexing apart? Differentiation must deliver a 10x better experience and beauty is in the eye of the beholder. It's uncertain which lever whether superior returns, lower fees, broader assets, Smart Beta, AI, transparency, or accessibility, will be the fulcrum. In due time, markets will decide. The accompanying table glimpses nine products: ETFs such as IBIT to pure indexes like COIN50 to variations of onchain DTFs like ETH+. The table spans from centralized to increasingly decentralized, highlighting differentiators through a common lens. Moving left to right, ease of use for the well-banked gives way to permissionless transparency, access, and customization. A likely outcome is not a winner-takes-all scenario but a convergence, what some call the DeFi mullet, blending a Fintech-friendly front end with a crypto-powered backend. A recent example of the DeFi mullet is Coinbase announcing Bitcoin-backed loans powered by DeFi protocol Morpho. DTF Challenges How can we make index funds 10x better? Efficiency erosion stems from operational friction eating into performance. Typically assets are onboarded at their peak health and liquidity, and often offloaded when underperforming. Slippage during these trades compounds inefficiencies, particularly in fragmented crypto markets where long-tail assets lack centralized exchange listings or robust market makers. “Including assets in a crypto index will create liquidity shocks, especially in fragmented markets with thin order books”, says Du. For less liquid tokens, the costs of rebalancing soar due to exorbitant gas fees or thin liquidity, further dragging on returns. Timing magnifies the issue. Many index funds rebalance at predictable intervals, enabling sophisticated traders to front-run these movements, increasing slippage and reducing fund efficiency. Such dynamics often leave index managers with tough decisions: condense holdings into fewer, more liquid assets, or cap fund sizes to limit exposure to these risks. Both approaches can help safeguard performance but constrain the breadth and appeal of the index. Early winners in this space may be demand-driven indexes wrapping large-cap assets with strong liquidity. By focusing on assets listed on centralized exchanges, these funds minimize onboarding and offboarding inefficiencies. However, “hedging during rebalancing, leveraging derivatives or full asset coverage could offer a meaningful edge in resilience”, Graham notes. Performing this type of hedging fully in smart contracts would be a revolutionary innovation in DeFi. Asset quality and diversity are critical to creating resilient crypto index products capable of thriving through both bullish and bearish markets. Access to inversely correlated assets plays a crucial role in index composition, as it may help buffer downside during volatile cycles. Yet, many crypto assets lack real product-market fit or sustainable network effects, with shitcoins still blanketing the landscape. Despite these challenges, crypto-native products have unique opportunities to leverage assets and instruments unavailable in TradFi, potentially offering a competitive edge. Many index buyers want products that outperform BTC and ETH bull markets yet safeguard from crypto bear market 40-70% drawdowns. In those moments, precise asset selection separates success from mediocrity, or worse. Regulation adds another layer of complexity. Crypto has operated in regulatory gray areas since its inception, a familiar story in financial innovation. The past offers parallels: mutual funds, born in 1924 as a diversification breakthrough amid fraud/mismanagement chaos, took 16 years to gain clarity under the 1940 Investment Company Act. Coincidentally, Bitcoin, also 16 years old, saw its ETFs approved, swiftly becoming the largest Bitcoin holder globally, with over $100 billion AUM. Other challenges persist. DAO governance wrestles with regulatory compliance, struggling to handle corporate basics, while TradFi users face friction accessing DeFi...glaring imbalances begging for innovation. It’s unclear whether DAOs or TradFi will lead this convergence, but achieving parity will be transformative. Regulatory clarity and easier access could bring $100 trillion onchain in the next decade. Distribution is a critical differentiator. Crypto protocols, often with scant history and weaker network effects, tend to build first and scramble for partnerships later. This leaves them grappling with the steep challenge of constructing distribution from the ground up. In stark contrast, Vanguard and BlackRock, fortified by five decades of experience, wield formidable network effects, securing demand before designing products. These titans listen to customers, then deliver exactly what they want. For them, success hinges not on groundbreaking tech but on unmatched distribution. Ethena stands as a compelling DeFi example securing several billion dollars of TVL with a few months of launch. By blending a Vanguard/BlackRock style aligning demand and partnerships alongside tech development, they left the "build it, and they will come" philosophy in the dust. While Boomers remain anchored to TradFi, a pivotal question arises: where will Zillennials entrench their financial loyalties? Ironically, the recent much-criticized memecoin mania may emerge as a critical gateway for crypto adoption, drawing users into new products beyond TradFi’s reach and reshaping speculative markets in surprising ways. Last Words Indexing has been over a century in the making. In the 1980s, critics like the Leuthold Group derided index funds as “Un-American,” but history has flipped the script. Four decades later, passive investing stands vindicated, quietly compounding wealth and reshaping finance. In his 1993 letter to Berkshire Hathaway shareholders, Warren Buffett highlighted “by periodically investing in an index fund, the know-nothing investor can actually outperform most investment professionals.” The coming generation of DTFs will thrive by combining strong distribution networks with novel technical implementation that pushes the boundaries of what is possible today: 24/7 borderless access to more themes and strategies, remixable, onchain, and governed for vibrant, competitive markets. Pension funds and academic research were the driving force behind index fund adoption in the 1970s and 1980s, while retail investors amplified the momentum in the 1990s and 2000s. 2010s speculators, tinkerers, and builders paved the way for institutions to enter the crypto market in 2024. However, these hands-on investors often are not the “set it and forget it” types and may not drive initial DTF growth unless entirely novel products emerge. While giants like BlackRock and Vanguard may continue to dominate market cap-weighted ETFs, the boldest innovation will come from unexpected corners. The next big thing will start out looking like a toy. If history is a teacher, permissionless transparency, access, and customization pledge a surge of novel products. What are a few DTF possibilities? * Crypto regulatory clarity is poised to unlock trillions in tokenized commodities and securities onchain. DIY Dragon Portfolio, trading 24/7, without a brokerage account. * Memecoins brought waves of users in 2024; a passive index could capture them effortlessly, and trade on the weekends. * AI-machine economies will spawn bespoke currencies and value-stores, that can be indexed effortlessly with dynamic regulatory compliance sans middlemen. * Base, the Coinbase integrated and fastest-growing blockchain ecosystem, lacks a native token. Index its top 10 DeFi, AI, gaming and meme assets for seamless exposure. * For billions without elite finance, DTFs won’t be exotic but a straightforward path to an 8% yield from a diversified real-world asset index, inflation-resistant and bank-free. * High-yield airdrop & staking indexes maximize investor returns while driving user-funded growth for emerging projects. * A new era of hedge funds onchain will compete on open-access, financial returns, transparent health metrics, while preserving strategy security via representative governance. * Crowd-directed indexes could directly integrate stake-weighted prediction markets, a model already being tested in projects like Numerai and Ocean Protocol Predictoor. * Before the tokenization of everything is realized, start with an index of indexes composing SPY (S&P 500), VGSLX (real estate), PDBC (commodities), and COIN50 (crypto) into one tokenized portfolio. If journalism, software, and education can disrupt and then accelerate through democratized production and distribution, so can investing. DTFs do this. As emerging platforms compete to break through with DTFs, many will fail, but the few that succeed could redefine the world order. The next BlackRock won’t resemble the current one. Capital always goes where attention flows. The excitement isn’t just about the potential variants of DTFs, it’s that anyone reading this will be able to create one, effortlessly and permissionlessly. Whether you’re a Fortune 500 company or a Starlinked anon on a beach, the future of finance is yours to co-create. ✌️ ### Aave Under The Hood: Up-Only Adoption URL: https://www.furthermore.co/aave-under-the-hood-up-only-adoption/ Published: 2024-10-06 Tags: DeFi lending, aave Excerpt: Step into Aave’s perfect storm: a $22 billion ecosystem with lending market fit, galvanized trust, stablecoin success, and lucrative carry trades. Decentralized governance and Merit incentives fortify its momentum, as Aave confronts an emerging trillion-dollar frontier: RWAs. Body: On September 10, 2024, I sat down with Marc Zeller, the steadfast founder of Aave Chan Initiative (ACI), whose thick French accent cast the ambiance for a deep dive into Aave and I got schooled, big time. This post draws from that interview, community conversations, and research into Aave’s governance and initiatives. The more I immersed myself in learning about Aave, the clearer it became: this needed to be shared with anyone aspiring to grow DeFi. TLDR * Aave’s TVL surged by 84% in the last 12 months, more than doubling the broader DeFi market’s growth, driven by compounding network effects and getting multiple things right at once. * Aave’s lending markets are expanding their foothold with looping and carry trade strategies, as borrowing volume becomes the key driver of DAO revenue, highlighting its importance over TVL as a metric. * GHO has stabilized, and supply risen to $150M through a combination of initiatives, fueling liquidity and unlocking new use cases throughout the ecosystem. * Aave’s security and governance have been battle-tested, scaling through industry storms without shortcuts, leaving behind a nuanced blueprint for resilience through decentralization. * Community and core contributors are intentionally merging, creating a wellspring of high-quality teams and driving even stronger outcomes. * Aave is making strides to bridge DeFi and TradFi with RWAs, leveraging insights from Arc and exploring new integrations with BUIDL and USTB. Introduction As DeFi continues to chip-away at traditional finance, Aave demonstrates that long-term survival goes beyond early mover advantages, a killer app or enticing yields. Aave thrives by fostering community trust, driving continuous innovation, and prioritizing risk-adjusted yields and stability. Aave is the primary liquidity protocol of the EVM ecosystem. Now seven years since its EthLend genesis, Aave has grown to $22 billion in deposits and $8.5 billion in borrows as of Sept 29, 2024. Aave's presence spans 13 chains, sometimes featuring multiple market instances per chain, each tailored to specific use cases, partners, and asset classes. This underscores the protocol's expansive and versatile reach Beyond the v1, v2, and v3 markets, mainnet features a wstETH collateral market for Lido stakers and a weETH collateral market for EtherFi users. Aave experimented with Arc, a permissioned instance designed for institutional participants requiring KYC compliance, a topic we’ll revisit in the RWA discussion below. Additionally, there’s a Crypto.com instance enabling borrowing and lending through the centralized exchange. Config.fyi is a helpful resource for viewing parameters for assets across Aave v2 and v3 markets on multiple chains. "Most liquidity will remain on L1 in the long run. Whales aren’t deterred by gas fees, they prioritize liquidity", Zeller says. Nonetheless, there’s an app for that! Coming in 2025, Aave V4 aims to unify liquidity into a single pool for greater efficiency. Increasingly Aave's philosophy is defined by a more mature project that is reaping the benefits of long-term product excellence and compounding network effects, naturally attracting users while minimizing extrinsic incentives. But how did they reach this point? Users, Flywheels and (Bad) Metrics Aave’s user base falls into two main groups: Liquidity Providers and Borrowers. 1. Liquidity Providers: Roughly 80% of users adopt passive strategies, depositing stablecoins or wrapped ETH to earn stable, risk-adjusted yields. These users form the steady backbone of the protocol. 2. Borrowers: The other 20% are more active, using collateral to borrow and execute sophisticated financial strategies that extend far beyond traditional lending. These borrowers typically follow one of three strategies: 1. Collateralized Borrowing: Users borrow stablecoins while holding assets like ETH or BTC as collateral. This allows access to short-term liquidity without relinquishing future gains, a powerful mechanism for those who want to maintain exposure while addressing immediate needs. 2. Leveraged Staking: A more aggressive strategy, where users borrow stablecoins, reinvest in the same asset, and amplify exposure through leverage, typically 2.5x or more. It thrives in bullish conditions but comes with heightened risks tied to market timing. 3. Delta-Neutral Carry Trading: This strategy capitalizes on the differences between borrowing costs and staking yields. For example, borrowing ETH at a low interest rate and staking it via a liquid staking token. Aave’s efficiency mode allows leverage up to 13x, amplifying returns while insulating from market volatility. Zeller shared something initially surprising to me, “TVL is a bad metric for ACI. Instead of focusing on total deposits minus borrowed assets (the default TVL metric), ACI prioritizes borrowing volume as a more meaningful metric.” For anyone needing a refresher, here is the TVL methodology for Aave on DefiLlama. TVL is a popular metric but can be mercenary and misleading, underscoring the need to explore the deeper forces driving it, an idea I’ve unpacked in greater detail in a previous post Humans All The Way Down: A Soul Search Into DeFi Community. Aave makes money from assets borrowed, not capital supplied. Interest paid by borrowers goes back to the DAO treasury. It's a little counterintuitive, but a high TVL can suggest liquidity is underutilized, while a lower TVL indicates liquidity is being actively used in the market. For Aave, lower TVL is a positive sign of Aave’s efficiency and profit generation. Storm Hardened Resilience Aave hasn’t just flourished by offering some of the best risk-adjusted yields in DeFi; it's weathered industry storms with a steady hand. As Zeller explained: “You have to battle test it over the years and survive in the industry where everybody dies very quickly. You have to survive FTX, Celsius, and Three Arrows Capital. You have to survive cascading liquidation(s). You have to survive the North Korean hackers. And if you are still alive and you are undrained after a couple of years, people will say, yeah, probably those guys are serious, and I will trust them. And I will trust them over making two extra percent on a competitor.” While other lending markets stagnated or chased trends, Aave built trust through its robust collateralization model, efficient liquidation mechanisms, risk management, diversified markets, and responsive governance. Aave also demonstrated swift responses to vulnerabilities. After the attempted exploit by Avraham Eisenberg in 2022, the DAO acted quickly, freezing low-liquidity markets within 24 hours to prevent manipulation and adjusting risk parameters within days to strengthen security. Over the years, Aave has proactively identified and patched vulnerabilities before they could be exploited. Regular security audits and bounty programs have ensured the protocol’s safety, with any reported issues resolved before affecting user funds. By consistently prioritizing security and avoiding exploits, even as its ecosystem expanded, Aave has cemented itself as a cornerstone of DeFi, thriving regardless of market conditions. Building a Community of Contributors When asked about how Aave motivates its community to contribute whether through governance or otherwise, Zeller highlighted, "We try as much as possible...to limit as much as possible extrinsic incentives for our users, because we believe a great product is enough." This principle underpins Aave’s community culture. Too many DeFi projects are getting swept up in the airdrop and points meta, incentivizing short-term engagement metrics like follower count and active addresses. Further, Zeller emphasized, “Vanity metrics like follower counts, likes, retweets can all be faked. What matters is revenue: Will people pay for your product? Will they engage and contribute?” And some do contribute. With the exception of Zeller, who originated from the core team, every member of ACI began as part of the Aave community, demonstrating their value before transitioning to full-time roles. "You don’t want to have segregation between the team and the audience because the audience becomes the team. That’s the whole point of a DAO." Several individuals started as users or participants in the forum and later grew into significant governance contributors. One community member, @EzR3aL, started with a modest Aave token holding but gradually earned the trust of fellow contributors. Through delegations, he now commands 173,000 voting tokens. This is how Aave builds governance from the ground up, encouraging a culture where every voice matters, even if the path to influence is gradual. Zeller’s north star for the community is “having a diverse and balanced set of representatives in governance, with strong frameworks to define their roles and guardrails to ensure accountability.” Governance: Balancing Decentralization with Efficiency The Aave governance token represents ownership of the protocol and DAO, granting decision-making power over assets, markets, and spending through onchain Aave Improvement Proposals (AIPs). However, Zeller warns that decentralization for its own sake isn’t always efficient: “I don’t believe asking 20,000 people for their opinion on every little thing is an efficient way to run an organization.” In Aave, governance is about creating an efficient system of liquid representative democracy (not to be confused with liquid democracy), where trust can be delegated but is also easily retracted if the delegate underperforms. Zeller shared: "Service providers should be able to be fired immediately, at any time, with a simple governance proposition. That’s how it should work." Today, eight key companies play critical roles in Aave’s governance, all elected and paid by Aave token holders: 1. BGD Labs: Core protocol development 2. Avara: Development of v4 and ecosystem marketing 3. Certora: Smart contract audits 4. Karpatkey: DAO treasury management 5. TokenLogic: DAO treasury management 6. LlamaRisk: Risk management 7. Chaos Labs: Risk management 8. ACI: Governance coordination, code implementation, strategy, and growth For a step-by-step illustrated guide to Aave governance, check out this fun thread from @0xBoka. Zeller further illustrates Aave’s governance structure, "even the largest delegate ACI, with 600 addresses delegating to them, cannot make a decision alone, because other delegates can block them. That’s crucial for creating checks and balances." This was demonstrated in the recent Gauntlet Aave renewal Snapshot vote where ACI was outvoted. The free rider problem in governance participation remains omnipresent, including for Aave. Most users show little interest unless directly impacted. Despite ongoing efforts to foster a culture of engagement, participation remains only a fraction of the 13 million tokens circulating are voting (~800k). Zeller acknowledged the improvement over time but noted “that human nature and laziness still hinder active involvement, suggesting it may take years to build a more engaged community of token holders.” As Aave’s governance grows and matures, Zeller envisions a future where the system is even more robust, with a broader array of active delegates representing a more diverse set of interests. It’s a system where a balance is struck between decentralization and efficiency, one that takes into account the natural constraints of human engagement and participation. Bootstrapping a Stablecoin? GHO is a decentralized, over-collateralized stablecoin native to Aave v3. Users mint GHO by supplying wstETH, sDAI, WETH, and WBTC or other collateral. GHO depegged shortly after its July 2023 launch, due to weaknesses in stability incentives that hindered arbitrageurs from borrowing additional GHO to stabilize market prices. To address this, Aave gradually adjusted the borrow cap and rates and introduced the GHO Stability Module (GSM) in early 2024. The Aave DAO formed the GHO Liquidity Committee, which enhanced liquidity strategies, for example, leading to significant GHO liquidity growth on Curve after the incentivized GHO/USDe pool launched in February 2024. These efforts helped restore GHO’s peg and improve stability, covered in greater detail by LlamaRisk. Aave’s GHO stablecoin elevates the carry trade strategy by offering lower borrowing costs compared to other stablecoins. Users can deposit assets like sDAI and borrow GHO at a discount, unlocking additional profit potential. Once borrowed, GHO can be staked for yields 16 to 17%, which combines a base rate with Merit rewards, further enhancing returns. The difference becomes profit, making GHO a powerful tool for growing liquidity within the Aave ecosystem. By offering competitive borrowing rates, GHO enables users to achieve greater leverage. Meanwhile, the carry trade increases demand for GHO, creating a symbiotic effect that helps the stablecoin reach the critical TVL needed for adoption by centralized exchanges, institutions, and beyond. For a contrasting study in bootstrapping, the US Dollar’s massive network effects largely stem from over 50 years of Saudi’s global oil sales priced in USD. Tether's USDT, initially struggling, only gained traction when the Bitfinex founders acquired it in 2014 and integrated it with the exchange’s network. Similarly, Circle’s USDC bootstrapped by leveraging Poloniex and Coinbase in 2018. Growing a stablecoin to a multi-billion-dollar scale is no easy feat, but GHO has a unique advantage that could allow it to break through. On Its Own, Merit The Aave Merit program rewards users for onchain actions that align with Aave's strategic objectives, using a merkle-tree-based periodic airdrop system. Merit rewards are funded from the DAO and are paid in stkAAVE and GHO. Launched in Feb 2024, Merit emphasized rewarding wETH and GHO borrows and more recently shifted to a focus on stkGHO users. These rewards can be boosted for aligned behaviors or diluted for non-aligned actions. Boosters increase a user's rewards based on behaviors that benefit Aave's ecosystem. Diluters reduce or eliminate rewards for behaviors that are not aligned with Aave's goals. View Merit Infos for a more detailed summary and chronology of changes in the program. Though the diluter system has faced some criticism, it functions similarly to incentives used by the mobile carrier industry, offering better deals for users who switch from competitors. Within 60 days of Merit’s launch, Zeller reported significant gains in Aave's market share, including over 200k ETH supplied, improved GHO stablecoin peg support, and growth in both supply (+40%) and revenue (+125%). With airdrop programs notoriously retaining less than 10% of users long-term, further research is needed to compare Merit's retention and its impact on new wallet growth. Power Law Ecosystem Like much of finance, the distribution of Aave value remains concentrated. As Zeller points out, “A million users holding $140 each would be great, but the reality is that three users represent 40% of GHO’s supply. Even now, 1% of Aave users make 90% of the protocol’s profit. That’s the reality of finance.” This stark observation might dishearten those hoping DeFi will dismantle traditional financial power structures, but Zeller’s transparency is helpful for grounding expectations. It’s a reminder that while the tools and technologies may evolve, human behavior often remains consistent. Even as Aave has climbed to the #2 spot by TVL among DeFi protocols, it still reflects the 1-9-90 community segmentation discussed in Humans All The Way Down. In this framework, a small percentage of users drive the majority of value. This is not a flaw, it’s simply how early stage ecosystems tend to evolve. As Zeller further emphasizes, “Aave’s revenue is heavily concentrated in six core assets (ETH, BTC, and stablecoins). Smaller, long tail assets contribute little value and there’s minimal appetite for using them as collateral or shorting due to the challenges of implementing high-leverage systems securely onchain. NFTs and smaller tokens face similar issues, as no one wants to take the risk of holding these assets against stablecoins like USDC.” Aave’s leadership is anchored by its product-market fit, decentralized governance, and growing revenue. These strengths position it to evolve further, unlocking new frontiers for growth. The Real-World Asset (RWA) Frontier Aave is now eyeing RWAs as the next frontier. Zeller notes: "synergy between onchain and offchain assets could be a game-changer. With RWAs still yielding solid returns, now is the time to seize this opportunity." Aave has already gleaned helpful insights from earlier initiatives. Aave Arc, the institutional-focused instance on mainnet, launched in 2022 and whitelisted 30 trading firms. However, rising interest rates and headline-making frauds negatively affected crypto-related risk assets. During this time, more Wall Street friendly institutions like Coinbase and BlackRock took the lead position as crypto onramps for TradFi. In 2023, Zeller hinted at Arc’s return, this time as a special-purpose facilitator for off-chain collaterals. GHO facilitators, governance-approved entities within Aave, oversee the minting, burning, and collateralization of GHO. Notably, GHO facilitators can provide exposure to offchain collaterals without users directly holding the assets, ensuring that those classified as securities remain inaccessible to unauthorized users. This approach could maintain compliance while still allowing for the benefits of RWA integration within the DeFi ecosystem. Additionally, the Aave ecosystem recently revealed a temp check to increase GHO's stability and yield potential through integrations with BlackRock’s BUIDL and Superstate’s USTB. The integrations enable 1:1 fixed-ratio swaps between USDC and GHO, and using USDC surpluses to mint yield bearing BUIDL and USTB tokens. Aave is racing to establish a foothold in RWAs before yields decline. By expanding beyond its current ecosystem, Aave is positioning itself to become a prominent bridge between DeFi and TradFi. Summing Up Aave now operates across 13 blockchains, with tailored instances for an array of distinct use cases, asset classes, and strategic partnerships. Early 2024 marked a decisive shift in the crypto landscape, as the market moved from a risk-off to risk-on posture, catalyzed by key developments: the upcoming Bitcoin ETF and Halving, innovations from Ethena, EigenLayer, and Pendle, as well as a surge in liquid restaking tokens and a frenzy of point-chasing within emerging protocols. From October 2023, to September 2024, DeFi’s total value locked (TVL), including borrows, surged by 36%, reaching approximately 37.6 million ETH. However, Aave’s growth far outpaced the broader market, with its TVL soaring by 84% to 8.1 million ETH. This astonishing performance expanded Aave’s presence within DeFi, increasing its share from 15% to 22% over the period. The chefs are cooking and Aave has hit its stride. The protocol has become a masterclass in lending, leveraging assets through looping mechanisms and sophisticated onchain carry trades, all while maintaining a stable, growing GHO and pioneering decentralized governance at scale. Its onchain behavior rewards program, Merit, is fortifying growth and loyalty within the ecosystem. Now, with maturity comes focus, Aave hones in on borrowing volume as the key driver of DAO revenue, the metric that truly matters. The ultimate test for any protocol is its ability to scale capital utilization while remaining secure over time. Aave has aced this challenge, emerging as a foundational pillar of DeFi, one of the old guard, standing strong with the most to show for it. Building a strong community of contributors and governors is a long, deliberate process. Aave exemplifies what’s possible when this delicate balance works in harmony, and occasionally, when it doesn’t. The principle that "the audience becomes the team" underscores the deep integration between core contributors and the broader community. Looking ahead, Aave’s focus on RWAs marks a pivotal step in bridging DeFi and TradFi. Building on the lessons from Arc, this evolution continues through GHO facilitators and potential institutional integrations, such as BlackRock's BUIDL. Despite being one of the most established DeFi protocols, Aave’s journey is far from complete. It offers a living blueprint for newer protocols, a roadmap of trial, error, and continuous refinement, illustrating what works and what doesn’t. And for that, we owe the Aave ecosystem our gratitude for carving a trail and lighting the way. 🕯 Special thanks to @curvecap and @raphbaph for feedback and review. ### Humans All The Way Down: A soul search into DeFi community growth URL: https://www.furthermore.co/humans-all-the-way-down-a-soul-search-into-defi-community-growth/ Published: 2024-09-22 Tags: Community and governance Excerpt: An excavation into how DeFi thrives on its most valuable asset—people, plus pivotal strategies and hard-won lessons fueling sustainable community growth. Body: Successful DeFi protocols harness community as a powerful growth lever. This post uncovers strategies, challenges, and victories that shape their ecosystems. By focusing on incentives, metrics, contributions, and governance, we reveal subtle but meaningful lessons that could benefit many projects. This post shares insights from seasoned protocols, those that have weathered challenges, evolved, and continue to shape DeFi’s future. In researching this post, we had in-depth conversations with six core DeFi contributors who generously shared their invaluable insights. Mastery lies in the intimate details, and this post offers just a glimpse. If you're itching to dive deeper, join these communities and get involved. * @DeFi_Made_Here - Instadapp Fluid, high efficiency lending/borrowing * @wagmiAlexander - Aerodrome & Velodrome, trading and liquidity on Base and Optimism respectively * @MattLosquadro - Synthetix, the liquidity layer for onchain derivatives * @omgcorn - Yearn, the decentralized, automated yield aggregator * @amplice_eth - Gearbox Protocol, the leverage layer for DeFi * @kmets_ - Aladdin DAO, flexible farming, leverage, stability products through Concentrator, CLever, and f(x) Protocol For these conversations, we targeted projects with a $70 to $700 million TVL range during Aug 2024. As projects scale, their needs and opportunities evolve. In the future, we will explore the unique dynamics of larger protocol ecosystems. I’ve spent the last few years helping build the Reserve protocol ecosystem. In that time, we grew from $0 to over $200M in TVL onchain, mostly during a bear market. But the journey was not without mistakes. Researching and writing this post has been a chance to zoom out, gain perspective, and offer it as a public good. I hope it proves helpful to you. This post is for: * Crypto project and community leaders eager to expand their toolkit and strengthen community-driven growth. * Job seekers aiming to break into crypto and contribute meaningfully. * Community experience enthusiasts who want to create spaces where people genuinely want to gather and collaborate What Community Is Contributions are the lifeblood and proof of work in a community. In the knotty labyrinth of DeFi, where products are currently at the fringes of experimentation, the earliest value lies not in broad numbers but in the depth of engagement. Borrowing from Gearbox Co founder @ivangbi_’s terrific post 1-9-90 Community and Brand Building, the community falls into three buckets… * 1% are devs, builders, teams, and those who create. * 9% are users, writers, funds, researchers, and angels who passionately observe the space and make some commentary. Not really teams, but not passing-by noobies either. * 90% are random traders and speculators who actually don’t ever read docs. They read headlines, buy and trade coins, and hold crypto - but they are not bothering themselves with questions of research. Just yellow press enjoyers and traders. They are not stupid, they just don’t bother to get married to any investment. Fundamentals for them don’t exist usually, they just want charts. In the context of the funnel metaphor, 90% are top-funnel, 9% mid-funnel and 1% are bottom-funnel. Here, we apply the 1-9-90 model to a standard marketing funnel, mapping interactions from initial awareness to passionate advocacy. With few exceptions, you must start community building with 1+9, and then work from there. Emerging Defi platforms without product-market-fit, demand a blend of technical education and ongoing hands-on experimentation that only the curious and entrepreneurial are willing to cut their teeth on. A handful of dedicated, high-caliber contributors can outshine thousands of casual enthusiasts. Key contributions include: * Developers: Create data dashboards, collateral plugins, or new primitives. * Deployers/Integrators/Apps: Utilize code, assets, or incentives to compose and distribute new offerings * Liquidity Providers / Farmers: Deposit assets into pools or vaults, earning fees or yield. * Borrowers: Provide collateral and take out loans * Leverage Farmers: Loop deposits and borrows, manually or with one-click, to amplify yields. * Minters: Deposit collateral to mint leveraged tokens or stablecoins. * Token Stakers/Lockers: Lock governance tokens, to gain enhanced governance rights and rewards. * Governors: Make proposals, elect councils, direct token emissions, and support protocol upgrades. * Traders: Trade spot or derivative swaps. * Researchers/Storytellers: Provide analysis and education across various mediums. While the list above is not exhaustive, it’s important to note that these individuals are genuine “users,” not mere onlookers or speculators. In many DeFi communities, this core group typically make up 10% or less (aka the 1s and the 9s in 1-9-90) of the total members. A meaningful portion of these contributors will be sourced through Business Development efforts, highlighting the close connection between community building and BD. For ecosystem builders, the challenge lies in cultivating space to identify and elevate these critical participants. Healthy Metrics Low-priority metrics include 𝕏 engagement, YouTube views, Reddit posts, Discord participants, community call attendees, and feedback from token holders who aren’t actually using the protocol. Focusing on these superficial metrics can create the illusion of engagement but ultimately leads to misleading insights. As the proverb goes, 'If you want to make the wrong decisions, ask everyone.'" If you want to make the right decisions, follow the data. The protocols surveyed herein, all viewed achieving $1 billion in sustained TVL as their next significant milestone. TVL is, without question, the most popular metric, but it carries layers of nuance. Parts of TVL can often be quite mercenary, making it ever more important to explore the deeper components that contribute to it. Here are a few to consider: * Liquidity / capital supply * Assets listed * The quality and number of apps of integrations * Transaction volume * Loans outstanding * Monthly active users (MAUs) * Revenue and/or profits In our conversations with surveyed projects, the quality and quantity of integrations surfaced as a leading Schelling point for community growth. Yet, the ultimate aim remains sustained MAUs, a more true measure of ongoing engagement. While the investment required to build these integrations is material, and the switching costs are high, each high-quality integration provides an additional layer of compounding value. Each new integration unlocks pathways to greater volume, fueling MAU growth and, ultimately, driving higher TVL, revenue, and eventually profits. “In the early stages, the impact of 10 to 20 major users can far outweigh that of thousands of casual ones. A small, dedicated group can create the initial momentum to scale toward hundreds of users and beyond”, as noted by @DeFi_Made_Here. Misconceptions and Motivations There’s a difference between superficial engagement and genuine community building. Communities focused on vibes or speculation struggle to convert engagement into protocol users, leading to long-term failures. True community building requires deeper support and ongoing contributions at the middle and bottom of the funnel. Several projects noted that pivotal community-building is often led by the Business Development teams in private, high-signal Telegram groups shared with other protocols. It’s common for projects to have hundreds of such groups, each dedicated to different protocol partners. Balancing extrinsic and intrinsic incentives is crucial. Extrinsic campaigns, like learn-to-earn quests or low qualification airdrops, often attract transient, mercenary participants. These campaigns typically lose 90% or more of users when incentives dry up. Careful management of these campaigns, such as using multiple work touchpoints, offering long-term rewards and attribution tracking, can improve retention. Similarly, incentivized KOLs can help spread the word, but choose wisely, many operate like mercenaries, and it often shows in the quality and authenticity of their efforts, or lack thereof. On the other hand, thoughtfully designed, enduring community content programs like those at f(x) protocol defy this trend and have thrived within tight-knit communities. Intrinsic incentives such as a clear mission, differentiated product, transparency, and a positive builder experience are key to long-term engagement. Fully onchain protocols with transparent incentive loops deliver direct value to users and strengthen network effects. Aerodrome excels at this by ensuring that all behaviors remain integral to the protocol, free from offchain intermediation. A few protocols noted that retroactive grants and rebates are powerful tools that blend extrinsic rewards with intrinsically motivated contributions. Aligning Governance and Power Dynamics There is often a gap between the appearance of community governance and real decision-making power. When a few entities dominate, the community’s role is reduced to a facade, raising concerns about the project’s commitment to true decentralization. This is a common issue. Potential solutions lie in how tokens are distributed such as fair launches, aligning governance voting schedules with onchain incentives, or establishing official delegate programs. A few interesting approaches are noted later in this post. The Human Element in Community Building Emerging systems rely on building a trusted brand, and that begins with cultivating a community. Broadcast announcements and tweets are insufficient for fostering a thriving community. Your earliest users need personalized guidance and meaningful support. Focus on one-on-one engagement with the 10 to 20 individuals or projects that show the greatest potential as long-term contributors. As those relationships deepen, scale organically, 20 becomes 40, then 80, and so on. Prominent team members with a strong social presence, who can explain the project in clear, accessible terms, become valuable marketing levers. Although this role often falls to the founder, it doesn’t have to be theirs alone. Consistent and clear communication is the most critical element, as @wagmiAlexander put it: "Even with immutable code, it’s humans all the way down." Deliberate Spaces Be intentional when structuring community spaces. With limited resources, entertaining speculators diverts attention from real growth drivers, leading to inefficiency. This shift not only weakens community dynamics but also dilutes the influence of real value creators. While speculators have their place, their moods swing with unpredictable market forces, meanwhile only project adoption is within your influence. Invest over 90% of your efforts into educating real users and gathering feedback on product adoption. Builders and innovators can’t thrive in a sea of noise; ill-informed conversations kill valuable network effects. As your project matures, encourage the community to create its own spaces. Caution Around VC Intoxication In a recent episode of the All-In Podcast, venture capitalist David Sacks remarked, "the big thing that's happened in our industry is we had a bubble in 2020 and 2021 and we just had a ton of capital come into the industry because the federal government airdropped $10 trillion of liquidity onto the economy in reaction to Covid." This flood of capital didn’t just boost markets, it overwhelmed the VC industry, saturating it with cash. As a result, the barrier to entry lowered, allowing less experienced, opportunistic individuals to label themselves as VCs. Funding announcements or logo-bragging don’t equate to genuine community engagement. Projects that lean too heavily on this form of communication risk revealing a lack of true user involvement. Some VCs adopt a 'spray and pray' strategy, prioritizing short-term exits over sustainable growth. Their focus remains on quick financial returns rather than the protocol’s long-term success. In contrast, VCs who actively participate in governance, hold tokens beyond vesting, provide analysis and foster ecosystem partnerships become invaluable allies. When flashy funding announcements surface, it’s worth pausing to assess how past and current investors are helping translate the project into real user traction. And if you’re the one making the announcement, its useful to remember that the most valuable potential contributors and partners will likely dig deeper than a press release. Governance Lessons and Wins Governance matters, but in early days, builders and users are the bedrock of TVL growth, which in turn is the heartbeat energizing governance. For example, during Yearn’s peak billion-dollar TVL phase three years ago, governance participation was 50x to 100x higher than it is today. Governance sits at the bottom of the funnel. To frame this differently, picture the watering holes on the African savannah where elephants, lions, gazelles, zebras, hippos, and crocodiles gather. These watering holes thrive under a natural constitution governed by the land and the inhabitants. In this metaphor, the water represents TVL, without it, the number of “governors” dwindles. Before participants are ready to govern, they must first become active users or contributors. When TVL is low, participation wanes, concentrating power in the hands of a few and weakening both community cohesion and governance. To build a strong community, focus on increasing TVL and governance will naturally follow. While this post won’t delve deeply into governance models, I’d like to highlight a few interesting approaches worth exploring. Protocols like Velodrome and Aerodrome use a fully onchain approach, with integrated governance & rewards through mechanisms like veTokenomics enabling participants to vote on emissions and earn a share of fees and incentives. Decentralized front ends can choose independently whether to include new versions of the protocol in the future. This model eliminates the need for traditional DAO governance forums or Snapshot votes, creating a "pull" system led by engaged participants rather than a "push" from external facilitators. Aerodrome has fostered a community culture where voting and rewards days (Wednesdays) are eagerly anticipated. f(x) protocol within Aladdin DAO, uses a similar method. Delegation in token voting is essential in DAOs where several critiques arise. Smaller token holders may not always engage in governance, but some are willing to delegate their votes, making delegation a helpful solution to broader participation. Synthetix has found success with representative councils, where 4-8 members are elected by SNX token holders. The Spartan Council leads protocol changes, the Ambassador Council handles external partner proposals, and the Treasury Council manages stipends and payments. Any community member can run for a council seat, with a 4-month term and a stipend of 2,000 SNX per month. In early 2024, Pyth Network adopted a clever cross pollination strategy and targeted an airdrop of PYTH tokens to Synthetix governance veterans. Eligible recipients were those who either voted on proposals or contributed meaningfully to governance. To claim the tokens, participants had to stake them within a specific time window, creating an incentive for deeper involvement. Any unclaimed tokens were returned to the Synthetix Treasury, ensuring that only those genuinely engaged in governance, rather than speculators, benefited from the distribution Unfortunately, none of the protocols I spoke with reported groundbreaking approaches to governance communications or dashboards. Most stick to the familiar, proposals on discussion forums, voting through Snapshot or Tally, and regular updates on 𝕏 and Discord. It seems we’re all navigating the same fragmented waters here. A litmus test for governance. While governance is in its infancy, I’ll leave you with an observation from @MattLosquadro: “The biggest litmus test is whether a project leader can come to governance and be pushed back by the community, either fully or with changes. This helps keep community members engaged.” Surprises Along The Way Despite the abundance of composable infrastructure, @omgcorn shares “it's curious how some protocols opt to build from scratch rather than leverage existing, battle-tested, and audited code. Licensing proven systems and integrating their network effects should be an obvious choice, but perhaps this reflects where we are in the cycle, still early.” Moreover, the drive to build rather than buy may stem from the need for new protocols to justify their token's utility. As core innovations mature into a more 'Lindy' state, coupled with a growing understanding of compounding network effects, current hesitations may evaporate. Community and TVL success is deeply tied to responsiveness and adaptability. DeFi has had a quieter cycle recently, but innovations like liquid restaking tokens and points farming have surged. Take Pendle, for instance, a protocol in the right place at the right time that navigated the market's currents skillfully, earning its near-blue-chip status. @amplice_eth highlighted “that it’s not just about innovative products, liquidity, or oracles; it’s about being a DeFi power user with an ear to the ground, aligning opportunities with the right timing.” “Aerodrome bet on token utility, system immutability and decentralization, not VC alignment or exit liquidity” says @wagmiAlexander. Building a community rooted in transparent, open access and utility, paired with continuous progress updates, fuels a surge of productive energy. Aerodrome’s Flight School program embodies this commitment. In contrast, opaque operations that limit benefits to a select few can create friction, especially in bearish markets, where these practices often erode community trust. However, there’s a meritocratic path to forming values-driven subcommunities, open to anyone willing to earn their place. Nearly every project has a subgroup delivering authentic value, whether through capital, product feedback, governance, or shaping the narrative. Some groups are formal and visible, while others operate quietly, with a few key contributors informally stepping into these roles. Examples include Aladdin’s Community Boosters, Yearn’s Secret Admirers, Synthetix’s Representative Councils, Club Gearbox DAO, and Aerodrome’s Pilots, Partners, and Sky Marshals. These subgroups foster a deeper sense of belonging, with their culture radiating outward to the broader community. To ensure a container of the most dedicated missionaries, several of these subgroups are unadvertised and seek a demonstrated commitment to the project’s values before offering an invitation. Simply releasing a product into the world and hoping it works is a pipe dream. Early success requires carefully guiding and supporting the first wave of users to bootstrap momentum. A good builder experience is vital, and fast high-quality responses in the community serve as a growth force-multiplier. For early contributors, recognizing and spotlighting their efforts is one of the most valuable currencies for growing network effects. Community isn’t a monolith but it does tend to cluster, it may be present on GitHub, Discord, governance forums, BD partner Telegram groups, Twitter/𝕏, Farcaster, YouTube or Reddit. While tailoring engagement to each platform is essential, limited resources make it equally important to prioritize focus and cut what's unnecessary. You can’t do everything. Better to win in one or a couple of places than to be mediocre in five. Farm System for Talent Assembling the right team is one of the toughest challenges in scaling any project. Time and again, in my conversations with protocols, I’ve noticed a recurring pattern: talent in business, operations, data, and marketing isn’t just recruited from within the community, they’re often already contributing long before being hired. This method is effective because it secures true missionaries. These individuals are deeply aligned with the mission and can make an impact from day one. @amplice_eth emphasized, “the people we want to recruit already believe in the product’s importance and differentiation. These are the individuals we actively seek.” @wagmiAlexander, who started his crypto journey as a volunteer in the Solidly community and previously worked in politics, shared a key insight: “In politics, those who secure full-time roles are the ones who show up early, deliver results, and persevere. It’s less about resumes and titles, and more about what you contribute.” If you don’t see skilled candidates in your talent pool, it may be a sign you’re not cultivating the right kind of community. As @kmets_ put it, “community is the farm system for talent.” Hiring from within the community also mitigates risks like bringing on bad-guy exploiters. In a remote work environment like DeFi, warm referrals become invaluable. However, sourcing engineering talent for DeFi protocols presents unique challenges. While it’s important to hire people who can hit the ground running, it’s equally important to design products for new users, not just the power users already entrenched in the space. In smaller DeFi communities, the talent pool for software engineers may be limited. In those cases, stepping outside the community and using traditional web2 recruiting methods becomes necessary. A saving grace emerges as ecosystem TVL grows and the stakeholders better align community engagement with recruitment efforts, and network effects compound. This is particularly noticeable in the largest DeFi protocols as well as L2s and alt-L1s. Grant programs also offer valuable opportunities to identify, test, and nurture new talent, just in time for the greater challenges ahead, a trend we’ll explore in a future post. Community is a helpful force in talent acquisition. Whether it directly supplies skilled candidates or serves as a beacon of social proof, it generates the spark that draws the right people into your project’s orbit. IRL Events: Make it Count Depending on who you ask, hosting events is either about building a brand, attracting users, or sometimes just growing consensus - and all can be correct. Conferences like ETH Denver and Token2049 offer mainstage talks and hackathons as well as host hundreds of side events, creating opportunities for protocols to engage with their communities in personal and meaningful ways. Some protocols also hold regional meetups throughout the year in cities like Berlin, Buenos Aires, or Lagos. For project leads, the key question becomes: where should you invest your time and resources? From speaking with various protocol leaders, the ROI on these events can be hit or miss. Some opt out entirely, finding little value in what could be replaced by YouTube videos. Others, however, have learned to embrace the unique aspects of the location and culture, transforming the experience into something fun, memorable, and deeply aligned with their project’s values. For example, the Shielding Summit privacy event at EthCC Brussels, took place on a secluded island where participants explored privacy funding, policy, and technology. Some attendees embraced the event's core theme of anonymity by donning masks, a fitting symbol for the discussions. Or the Celestia Game Night at Devconnect Istanbul where attendees dropped into accidental collisions playing Smash Bros. sparking authentic conversations, far more engaging than the usual “where do you work?” exchanges. There was even networking in the Turkish hammams, where the cultural immersion made the experience irreplicable anywhere else. Though the Reserve ecosystem isn't a focus in this post, I should flag two standout events that emphasized consensus-building. ReGov at ETH Denver brought together veTokenomics enthusiasts for hands-on collaboration to distill signal from noise and enhance governance design. Meanwhile, Monetarium, a three-day gathering in San Francisco for stability nerds, advanced long-term sustainability within the Reserve ecosystem and explored alternative forms of money to combat global inflation. Both events seamlessly integrated subject matter, attendees, values, and location, creating an irreplicable, offline experience. The work accomplished in just a few days holds billion-dollar implications. Striking the right balance is tricky. Loud clubs and sprawling venues can dilute the opportunity for meaningful dialogue. Smaller dinners or impromptu meetups often create more intimate and impactful discussions. Co-hosting events with partner projects can also encourage the cross-pollination of ideas, while sharing the logistical and financial load. Aligning events with your business development goals, especially around product launches, can amplify their impact. Timing these gatherings to coincide with feature releases could help the event be more than just a party; it becomes a strategic extension of your growth efforts. The most impactful events are often relaxed and intimate. Smaller settings encourage deeper conversations, particularly when you mix people from different disciplines, like engineers and artists. Hosting several narrow discussions rather than one large one can foster a more participative, creative atmosphere. And of course, curating the right attendees is critical, whether you're the organizer or participant, nothing dampens an event more than filling the room with people who don’t align with your 1-9-90. Reaching International Many of the projects mentioned here have contributors and partners across multiple continents. However, their global reach has largely been driven by a differentiated product and English-language communication. While some have experimented with multi-language efforts, the outcomes were often distracting or underwhelming. Given limited resources, focusing on English remains the most effective strategy, as it reaches the majority of the DeFi community. That said, if you're considering expanding into other languages, French, Spanish, Portuguese, and Chinese are the most commonly cited areas of interest. Some projects noted that even occasional tweets in local languages can spark recognition and excitement within those communities. Naturally, if your go-to-market strategy depends on a specific region, tailoring communications to that audience becomes an imperative. Last Words Throughout this post, I’ve shared insights from veteran builders of $70 to $700 million TVL protocols that have stood the test of DeFi time. What works for them might not work for you, but if you're willing to experiment, the 1-9-90 framework offers a useful guide for setting accountable priorities in community building. It reminds us that a few high-caliber contributors often outweigh the noise of thousands of followers or critics. These dedicated individuals, aligned by shared intrinsic values (ideally onchain), may require more investment upfront, but their contributions have longer lasting impacts. Engage the community directly and personally, 20 well-placed DMs often yield faster results than a tweet to 20,000 followers. While this approach doesn’t scale, it’s indispensable in the early days of fostering a vibrant, healthy community. A strong community also doubles as a rich recruiting ground, especially for non engineering talent. If your project isn’t attracting talent from within, it might be time to rethink how you're integrating community and recruitment efforts. While TVL is the lighthouse metric, the quality and quantity of protocol integrations can offer a more useful leading indicator of what's to come. Core contributors who publicly and substantively share product features and benefits are one of the most powerful levers for generating inbound interest and fortifying loyalty. When it comes to community platforms, you don’t need to be everywhere, less is more. Focus on cultivating your 1s and 9s in their preferred habitat, and new opportunities and the broader community will follow. The right individuals, deeply invested, will create an organic ripple effect that grows the ecosystem. Governance participation, too, will largely follow TVL. Secure the users, grow the TVL, and the governors will follow. Event strategies should align with your goals, whether that’s building brand recognition, attracting dedicated users or galvanizing consensus. Create experiences that are memorable and can’t be replicated by a YouTube video. When you strip away the noise, it’s humans all the way down. I'd love to hear your thoughts on this post, feel free to connect with me on 𝕏. ### Stirring Into the Wild Wonder URL: https://www.furthermore.co/stirring-into-the-wild-wonder/ Published: 2024-06-30 Excerpt: A reflection on wild, grounding experiences, and a transformative adventure at Boulder Outdoor Survival School (BOSS). Body: Recently, actor Nic Cage reflected on a conversation he had with David Bowie about exploring new directions. Cage asked, 'How did you keep reinventing yourself?' Bowie’s response was simple but profound: 'I just never got comfortable with anything I was doing.' This is a share for the fellow seekers. I sometimes find myself looping in headspace, so whenever I can, I seek out stirring, grounding and even harrowing experiences; the magic of Black Rock City, sculpting concepts into thriving ventures, becoming a godfather (I do not have kids of my own), trekking Everest-Patagonia-Peru, the pain of Auschwitz, and most recently, completing the seven-day field course at the Boulder Outdoor Survival School (BOSS). At the start of this year, the seeker in me was inspired to create more wonder, a contagious proposition. My taste had changed, and I had come to a new appreciation of my own introverted rituals. Cosmopolitan pursuits of yesteryear had become a bit trite, so I planned an adventure I had been deeply curious about for some time: How would I survive in the wild? My time in the US Navy 30 years ago gave me a basic introduction to survival skills (primarily in the ocean, or if captured), but what I experienced last week at BOSS was a new peak; intense, challenging, transformative, and vividly grounding. Our journey spanned an operating theater of 5,000 to 11,000 feet altitude in the rugged mountains and high desert of Utah. Every step tested us: thin air, blistering days, cold nights, and miles of earth traversed. Scarce water, limited provisions, and the relentless elements made every moment a vibrant confrontation with life. This was not a vacation; it was a raw, unfiltered encounter with nature’s harsh beauty. We were stripped of comfort, our vulnerabilities laid bare. This was exactly the wild wonder I hoped it would be. Over several nights, we lay under a canopy of stars. The camaraderie among us, eight strangers and three instructors, was forged through shared adventure. We shared stories, we laughed, we struggled, together. The silence of the night was punctuated by the crackling fire, the whispering wind, and our unabridged exhaustion. Throughout the journey, the always-on business mind in me wondered about the meaning and takeaways of this experience. Often, I thought of it as a gift from the creators of this program more than 50 years ago, from the current facilitators today, from my 18- to 53-year-old compadres on the journey, and most importantly, from our 4.5-billion-year-old planet that gives so much life. A dear friend once anchored me in the art of acceptance. Not everything needs an analysis or takeaway; it’s enough to simply accept a gift and share it if we can. Besides, it’s likely different for everyone. This post is my way of sharing that gift, hoping to inspire others to access the same glimpse of beauty I tasted. Go outside, touch grass, roll around in it, or take it to the next level with a wilderness adventure and survival experience. While I can’t share every detail of the BOSS journey since that would ruin the surprise, I hope that if you undertake a similar adventure, you’ll reach out and share your experiences with me. I’d love to hear about your journey. ### The Big Bang of Stablecoins URL: https://www.furthermore.co/the-big-bang-of-stablecoins/ Published: 2024-06-04 Excerpt: Many expect a power law for stablecoin winners. Its more complicated than that. We're in a multi decade era of financial unbundling and a 'big bang' of stablecoins. Body: Thousands of stablecoins will emerge, potentially leading to the first $1T stablecoin and several worth $10-$100B, in this decade. Today's duopoly are 1st gen stablecoin architecture, akin to the first New York Times website being merely a PDF in 1996. This post originally appeared on 𝕏, presented live at ETH Belgrade 2024 (video). 2/n Bad news first 3/n Today’s US Dollar does not resemble its original asset backed self. Its based on the fiat standard leveraging artificial network effects, with inflation out of control. The US Dollar buys 2-3 times less than it did 4 years ago, and 9 times less than it did in the 1970s. 4/n We are in an inflation pandemic. These lines represent inflation across 30 countries since 1960. Currently, there are 5 countries worldwide with an inflation rate higher than 100%, and 23 countries exceeding 20%. The cost of sending a $200 international remittance can be as high as $8 to $34 depending on the send/receive corridor. Getting credit may depend on the gray markets and sometimes results in unfair loans, data theft, harassment and physical harm. The need for safe, stable money has never been more important. 5/n Good news 6/n Technological revolutions begin with new innovations, finding their way into speculation that exceeds reality, and the successful ones go onto wider adoption. We are in the 5th technological revolution of digital information, communications (and value) and witnessing revolutions inside of other revolutions. Inspiration: Carlota Perez 7/n Just a reminder on how the S curve works. Inspiration: Everett Rogers 8/n The US Debt explosion during the 5th technological revolution is a perfect storm 9/n Within the 5th technological revolution of digital information, communications (and value) there are smaller revolutions compounding on each other: 1. Digital (1970s) manipulate electrons rather than atoms 2. Open source (1980s) create solutions once, use everywhere 3.Composability (1990s) remix software like legos 4.Blockchains (2000s) permissionless work, prevent "double spend" 5. AI (2020s) machine economies, unfettered by meatspace physics 10/n The net result is the democratization of tools of production & distribution and hyperconnectsupply and demand, for all kinds of use-cases (including stablecoins). 11/n This phenomena was observed in 2006 – The Long Tail – why the future of business is selling less of more. 12/n So. What is the long tail? The long tail represents the significant demand for niche products that emerge in the digital age of online markets. The Y axis is popularity, the X axis is the number of products. Before the digital revolution of the 90s, most industries were relegated to only making hits in order to survive. Everything was driven by the gatekeepers. 13/n Long tail markets have different expansion stages. First, they democratize tools of production = so more stuff lengthens the tail. Second, they democratize the tools of distribution = more access flattens the tail Last, they connect supply and demand, = which drives business from hits to niche Open source and composability is a force multiplier for the long tail. 14/n What can other industries teach us? Shopping? Broadcasting? Mobile apps? 15/n In the 1980s we mostly congregated in malls with a limited number of stores and products that were approved by the gatekeepers. This is the tyranny of physical space. Today there are over one million merchants on the Shopify platform alone. 16/n In the 1980s launching a broadcast channel cost in excess of $10s of million of dollars and took years to launch. Today, anyone can do it, for free, in a few minutes. 17/n The og phone app was talking on the phone. Then we got SMS texting. Now there are over 2 million apps in the app store. 18/n Free tools, creativity, infinite distribution and incentives. Does that sound familiar? Its happening right now in the Ethereum ecosystem. Remember those long tail market expansion stages: (a) Democratize the tools of production, (b) democratize the tools of distribution, then (c) connect supply and demand. Unique this time is decentralization and composability, a powerful force for expansion to occur faster than we’ve ever seen in history. 19/n 👀 20/n Analog money is stuck in the past: basic functions, slow to scale (USD, EUR), easy to fraud, and bureaucratic. Digital money is the future: programmable, fast, secure, efficient network effects (PayPal, DAI), transparent transactions, and fosters free-market innovation. 21/n This is Vitaliks stablecoin categorization from a Dec 2022 post on whats exciting him in the Ethereum ecosystem. He dives into three categories: (a) centralized, (b) DAO governed real world asset backed and (c) governance minimized crypto backed Centralized stablecoins make up something like greater than 95% market share, but dare I be cliche and say, were early. 22/n There are already 200+ stablecoins. Less than 100 existing this time last year. 23/n Here are some popular stablecoins, each have different jobs to be done Tether was the first, provided a safe haven for traders and bootstrapped by Bitfinex. DAI was the first stablecoin for onchain natives. USD3 is a yield bearing blue chip stablecoin index. alUSD is pretty cool as a bridge stablecoin for people accessing self repaying loans. 24/n The list goes on. With even more jobs to be done. crvUSD offers a more user friendly soft liquidation engine for borrowers hyUSD is an on-chain DeFi savings account USDGLO is a charity dollar donating T-Bill yield to help end poverty Programmability changes everything. More new stablecoins could launch in 2024, than in the last decade combined. 25/n So...stability over centuries? 26/n Time to experiment 27/n Reserve protocol “RTokens” (next gen stablecoins) introduce five onchain innovations in one tidy, decentralized package. 28/n The Reserve ecosystem is whats UP 29/n The Web 3 Dollar (USD3) Rtoken allows users to earn the DeFi rate anytime they are in stables. @USD_3 features blue chip asset-backing with overcollateralization to guard against black swans and bank runs. 30/n Visit and create your own RToken today Free to use, no fees. app.reserve.org/deploy 31/n Choose from over 60 collateral plugins to diversify your asset backed RToken 32/n Who might deploy or utilize new stablecoins in the future? Short answer: maybe more than we think. Each of these groups has a different motivation, a different job to be done. 33/n This perfect storm is leading to a stablecoin big bang: Enablers include: -Digital - manipulate electrons instead of atoms -Open source - Solve each problem (only) once -Composability - Remix software like legos -Blockchains - Permissionless work, prevent “double spend” -AI - Machine economies, freed of meatspace physics Other factors include free tools, creativity, infinite distribution, and incentives accelerating pockets of innovation. The big bang could be 1,000s of stablecoin experiments with a subset snagging 5% ($4.1 trillion) of $82.6 trillion “broad money M2” supply in this decade. 34/n The path for decentralized stablecoins to step through sticky-layers of adoption, reminds me of a staircase. Many steps to climb. 35/n Different strokes for different folks. The US dollar started in government. Tether & Circle started as a bolt-on to centralized exchanges. DAI started onchain helping natives expand capital. 36/n Hit this QR code to join the Reserve ecosystem to help you design, launch and govern your own stablecoins. Its free. 37/final Thanks for reading. Presenting this today at @ethbelgrade. Appreciate shares or critique. This post originally appeared on 𝕏, presented live at ETH Belgrade 2024 (video). • • • ### Turning Out Wyoming’s Stablecoin Frontier URL: https://www.furthermore.co/turning-out-wyomings-stablecoin-frontier/ Published: 2023-12-28 Excerpt: Wyoming aims to create its own custodial stablecoin, but could an onchain, diverse asset-backed stablecoin provide greater resilience? Body: Wyoming aims to create its own custodial stablecoin, but could an onchain, diverse asset-backed stablecoin provide greater resilience? Over the past five years, Wyoming has earned a reputation as the “Crypto Cowboy State” thanks to numerous crypto-friendly laws passed by its legislature, covering digital assets, banking, decentralized autonomous organizations, and most recently, the prospect of a state-governed stablecoin, possibly issued as soon as 2024. To this end, the Wyoming Request For Information (RFI) and Request for Proposal (RFP) processes are underway to explore development of a stablecoin with the following aims: * Issued by the public sector * Price parity and redeemable for one US dollar * Fully reserved, held in trust by the state of Wyoming * Investments only in US treasuries * Higher transparency than privately-issued stablecoins * Revenue sharing to Wyoming public goods, such as its school board For those at the beginning of their crypto learning curve: stablecoins are cryptocurrencies whose price is pegged to the value of a fiat (i.e., government-issued) currency or other assets. The introduction of stablecoins opened the possibility for cryptocurrencies as a safe haven from more volatile assets. Different types of stablecoins have emerged including those backed by fiat currency, crypto, real-world assets, and even algorithmic mechanisms. Note: Throughout this essay we will reference items that are “onchain,” which indicates something happening on or interacting with a public blockchain ledger. Blockchains enable greater transparency, reduced risks of error and fraud, and lower transaction costs. Wyoming, we have a problem The current financial services paradigm, with centralized middlemen administering opaque financial institutions, is broken. The Madoff Ponzi Scheme, UBS Libor Scandal, Wells Fargo Account Opening Scandal, Credit Suisse Money Laundering Scandal, frauds at FTX and Celsius and over 200 US bank failures in the last decade serve as stark reminders. Many share commonalities at the intersection of fraud or negligence, lack of transparency and accountability, and significant financial losses, partially owing their sad trophies to a system design that is fragile and inherently unstable. A new hope The solution? Incorruptible transparency, diversification, and the elimination of concentrated power centers leading to true public goods ownership. But how can this be realized? Increasingly, entrepreneurs and institutions are looking toward public blockchains. Although the underlying technology is already 15 years old, it remains in its infancy, with reports suggesting less than 1% of Earth’s inhabitants use it on a monthly basis, or about the equivalent of the Internet in 1993. Thus far a number of enthusiastic projects have misplaced the use of blockchains by clumsily tacking it on to existing analog processes. While there are frequent press releases bragging about the blockchain tech, in the back office it is business as usual: centralized, opaque, slow, and expensive. Thankfully, this is changing. What is required? The next-generation stable digital money should solve for a number of shortcomings in the current system. Diversified asset backing Stablecoins pegged to one dollar and backed 1:1 by a diversified basket of assets offer a more safe and decentralized solution by spreading out risk. Asset backing might include fiat stablecoins, T-bills, crypto, commodities, real estate, and other inversely correlated tokenized assets. Transparent, verifiable reserves Stablecoins should have their asset-backing reserves fully onchain, permissionlessly verifiable by anyone seeking to understand the types, amounts, and risks of the underlying collateral. For assets that are held offchain, there should be independent audits reporting provenance, quantity and quality of the collateral. Anti-bank run mechanisms Stablecoins should enable permissionless minting and redemption for their underlying collateral onchain, in addition to possessing a “rainy day fund” to protect against black swan events, bank runs, and depeg events. To disincentivize first-come-first-serve withdrawals during a depeg, the stablecoin should automatically freeze and implement a fair distribution exit process at the completion of the event. Revenue sharing Stablecoins, in particular the newer, decentralized offerings, offer shared revenue onchain, with users and other stakeholders co-creating a new financial system based on sharing prosperity. This stands in contrast to traditional banks and even first-mover stablecoins, which have historically kept revenue for themselves. Decentralized community governance Stablecoins with onchain governance aid in the identification of potential negligence or fraud faster than traditional finance, which galvanizes public accountability. Opaque, confidential pacts that favor a select few have limited opportunity in the 21st century. User data protection Stablecoin users should be able to choose privacy for their transactions. This is possible thanks to “zero-knowledge proofs,” which allow a user to prove something without revealing the specifics. An analogous real-world example would be proving you’re old enough to buy something without revealing your exact age. Moving money between stablecoins and your bank account can be seamless, even with this enhanced privacy, thanks to regulatory compliant networks. Electronic Dollar (eUSD) on the MobileCoin network is a fully functioning example of this technology in action today. Programmability Stablecoins should be programmed to do things automatically (e.g., all of the above items), without error or exposure to corruptible middlemen. This automation will be especially important during the fog of war such as a financial crisis. Programming can and should be updated only by community governance. Stablecoins that meet these criteria have the built-in ability to remain stable, secure, and self-healing, even (and especially) when institutions and governments fail. Why does it matter? The current financial system, built on centralization and outdated technology, has sacrificed speed, flexibility, and user control at the altar of convenience. While the learning curve of blockchain may initially seem daunting, the upside could be immense. Embracing decentralization and transparency unlocks a future of financial inclusion, where everyone has ownership over their money. Imagine a world where the “good guys” can easily opt out of a system that too frequently rewards the “bad guys;” or where people can access globally connected payments without having a driver’s license; or entrepreneurs can easily get a startup loan from their community without providing collateral. More plainly, these are the benefits that await: 1. A system in which users truly own their currency, not just given access to it at the whims of opaque institutions. 2. A system fortified by cutting-edge cryptographic security, where fraud and theft are drastically reduced. 3. A system that empowers citizens to share in the prosperity they create, bypassing rent-seeking middlemen who siphon value at every turn. Addressing Wyoming’s criteria to create ‘wyoUSD’ Hundreds of companies and even some governments are working toward the tokenization of everything; that is, figuring out how to put real-world assets like commodities, stocks, bonds, lending, and real estate onchain. Citigroup is forecasting trillions of dollars of newly tokenized assets by 2030. As of today, however, the most popular assets used to build a diversified basket for stablecoin backing tend to be other fiat stablecoins, tokenized treasuries, and various other cryptocurrencies. As more assets become tokenized, we can look forward to even greater diversification and increasing resilience for asset-backed stablecoins. For the sake of this essay, let us imagine Wyoming USD (wyoUSD), a decentralized stablecoin with the following characteristics: 1:1 diverse asset-backed Exclusively backing stablecoins with US Treasuries concentrates investment in a single asset class which exposes the system to heightened vulnerability, particularly in the context of the United States’ rapidly increasing national debt exceeding $33 trillion. Alternatively, diversifying stablecoin backing with other assets would simultaneously distribute counterparty risk and cultivate intrinsic resilience. Because crucially each backing asset in a basket contributes its own additional safety mechanisms. In fact, assets like DAI are increasingly further diversifying their own backing with real-world assets. wyoUSD could initially be fully backed by a basket of 33% DAI, 33% USDP, 33% eUSD. * DAI is the oldest and most widely used stablecoin that is entirely issued, managed and redeemed onchain and backed by a mix of real-world assets, crypto, and fiat stablecoins. Learn more about DAI safety at Bluechip.org. * USDP (Pax Dollar) is issued by NYDFS-regulated platform Paxos, and therefore subject to stringent guidelines and monitoring requirements. USDP’s reserves comprise short-dated US Treasuries, highly liquid assets backed by US Treasuries, and cash in fully segregated and bankruptcy-remote accounts. Learn more about USDP safety at Bluechip.org. * eUSD (Electronic Dollar) a safety-first stablecoin that brings together diversified, highly liquid backing of USDC (Circle) and USDT (Tether) with ample anti-bank run overcollateralization. eUSD was the first stablecoin created on the Reserve Protocol. Learn more about eUSD’s stress test during the run on Silicon Valley Bank. A basket of yield-bearing DAI, USDP, and eUSD (derived from DeFi protocols such as Compound, Aave, and Convex) could generate a net yield of up to 6% for wyoUSD stakeholders. Safe and transparent By utilizing the Reserve Protocol, wyoUSD could maintain asset-backed reserves fully onchain that are permissionlessly verifiable by anyone wishing to understand the types, amounts, and risks of its collateral. wyoUSD would have overcollateralization, zero-fee, permissionless minting and redemption, as well as mechanisms like fair and proportional distribution that disincentivize first-come-first-serve in the event of a black swan event. Because this transparency is on a public blockchain for anyone to verify, it should not require additional reporting or auditors. Revenue sharing to holders and public goods wyoUSD’s revenue sharing can be programmed via community stakeholder governance. As an example, the aforementioned 6% yield could be distributed as follows: 40% to wyoUSD holders, 40% to the state government, and 20% to overcollateralization. If Wyoming were to allocate just 10% of its $36 billion state GDP to using and accounting for a $3.6 billion wyoUSD supply earning 6% yield, we could expect this would generate about $216 million per annum, where $86.4M would be distributed to the holders, $86.4M to the state, and $43.2M to overcollateralization. Issuance and governance by the public sector By leveraging the security and transparency of decentralized protocols such as Reserve, issuance and governance are facilitated by the public in smart contracts, minus the middlemen. wyoUSD should be governed by the citizenry and companies making the most active contributions to the economy. Governance responsibilities can be earned or delegated through a number of various methodologies. Wyoming as a first mover While hundreds of governments around the world are exploring central bank digital currencies via Industrial Age management paradigms, Wyoming has the opportunity to solidify its reputation as the “Crypto Cowboy State” by pioneering state-affiliated decentralized stablecoins. It is possible that wyoUSD could even become popular outside of Wyoming, whose stakeholders would have a headstart in reinventing a more fair and transparent financial system. Cost effectiveness Decentralized technologies like the Reserve Protocol eliminate the costs and errors of middlemen and reduce the risk of fraud. wyoUSD can be architected to have near-zero costs for collateral asset management maintenance, as well as transparent verifiable reserves, revenue sharing with stakeholders, and governance, all of which are administered onchain. Closing thoughts Since 2018, Wyoming has positioned itself as a leader in the crypto space, embracing innovation and paving the way for a more inclusive and efficient financial future. While the recent move towards accelerating stablecoin adoption is undoubtedly groundbreaking, an even greater opportunity exists: to leapfrog the flaws of the current financial system entirely and rapidly achieve groundbreaking levels of transparency and prosperity. It is an opportunity not just for Wyoming to make a tangible impact locally, but also to inspire the global financial landscape. A stablecoin like wyoUSD could serve as a “light switch” that instantly brings much-needed transparency and accountability to the financial system. Imagine a world where financial access is equitable, prosperity is shared, and accounting is both verifiable and immutable. This is the innovative future that Wyoming is uniquely suited to pioneer. This is what wyoUSD could do. For those seeking a deeper understanding of risk and mitigation within the Reserve Protocol, a comprehensive guide is available for your reference. To explore the possibilities of wyoUSD, decentralized stablecoins, or the Reserve Protocol in greater detail, feel free to join the community Discord or connect directly on X. ### Money Different URL: https://www.furthermore.co/money-different/ Published: 2023-05-25 Excerpt: Permissionless asset-backed stablecoins unshackle prosperity. The dollar’s dominance is fracturing and a new era of stable currency is underway. Body: Permissionless asset-backed stablecoins unshackle prosperity. The dollar’s dominance is fracturing and a new era of stable currency is underway. The consensus understanding of stable money is stuck in the industrial age, as we have been conditioned to believe that fiat currencies like the US dollar are stable despite their decreasing purchasing power over time. The system is not very fast, nor transparent, nor even fully backed by assets. It’s shortcomings also provide the ideal conditions for a banking system that repeatedly shortchanges its stakeholders, JP Morgan 2013, Wells Fargo 2020, SVB 2023. The dollar’s foundation has been weakened over the past 50 years as the US government has issued over $31 trillion in new debt and another $39 billion just four months into 2023. According to the Bureau of Labor Statistics, the dollar has lost 87% of its purchasing power between 1970 and 2023. It’s difficult to imagine the incumbent paradigm is perishable but throughout history, empire currencies have been short lived. For example, the Roman Denarius (3rd century BCE), the Dutch Guilder (17th century) and the British Pound Sterling (19th century), all experienced a similar rise and fall. In his book “The Changing World Order: Why Nations Succeed and Fail,” Ray Dalio discusses the evolution of eight reserve currencies throughout history, each going through birth, golden age, and decline. It’s impossible to predict what monetary systems will look like 50 years from now, or even 10 years from now, but what is predictable, is change. “potential to make fractional banking whole again” A new financial system is emerging that utilizes transparent smart contracts to replace intermediaries. This system has the potential to make fractional banking whole again and with reduced barriers to access and auditable proof of reserves available 24/7. Furthermore, there is a strong possibility that this system could be resistant to political fumbling. The catalyst for this new era takes inspiration from America’s core values and the possibilities of free markets. “Markets are better than governments at picking winners and losers. Innovation requires running experiments, and not all will succeed”, Peter Thiel once said. Commitment to free markets and innovation has led to transformative advancements in transportation and communication, including automobiles, airplanes, and the internet. Why stop there? By being open to experimentation and innovation in stablecoins, we can bring money into the digital age and transform the world once again. We stand at a chasm between the industrial age of an incumbent money system and the dawn of digital money that has not yet had its broadband moment. This is the AOL era for stablecoins, and the potential for change is immense. It’s already happening, in just the few early months of 2023, protocols and entrepreneurs have launched several new decentralized asset-backed currencies. High Yield USD (hyUSD) is a secure high yield savings dollar with up to 8% APY expected to outpace the rate of inflation in over 100 countries around the world. ETHPlus (ETH+) is a safety-first diversified ETH staking index with up to 4.5% APY. Electronic Dollar (eUSD) is an anti-fragile stablecoin built to endure black swan events, recently proving itself during the run on Silicon Valley Bank. All three asset-backed currencies have launched utilizing the permissionless Reserve Protocol on the Ethereum blockchain, we call them “RTokens.” RTokens are always 1:1 asset-backed and facilitated through smart contracts, allowing for permissionless minting and redeeming on-chain by users without the need for any middlemen. RTokens also introduce revenue sharing and an emphasis on safety with overcollateralization and auditable proof of reserves on-chain 24/7. Each RToken can have an entirely different governance system and is governed separately by RSR stakers. The first RToken, eUSD, was recently stress-tested with inclusion of USDC in it’s asset-backing basket at the time of the run on Silicon Valley Bank. Circle’s USDC reserves were held at the bank, which led to USDC depegging from $1 down to 88 cents. Through eUSD’s decentralized ‘self-healing’ capability, eUSD was able to autonomously recapitalize and return to $1 peg without the need for regulator or bank backstops. hyUSD, ETH+ and eUSD enable DAOs and funds to improve capital allocation and risk management. eUSD has already been adopted in the MOBY app to send borderless, end-to-end encrypted money in under 5 seconds for quarter-penny fees; much better than $20 fees on remittances that can take several days. eUSD has also been adopted by the RPay app in Latin America, which was recently celebrated in a 2023 IMF Working Paper for helping users preserve savings and protect livelihoods from volatility due to hyperinflation. “RTokens improve capital allocation and risk management” Arguably, the most significant impact of decentralized and permissionless asset-backed currency is the unleashing of creativity and prosperity that no monopoly ever could. In the nascent stages of innovations like automobiles, airplanes, and the internet, skeptics expressed doubts about their demand and safety. However, entrepreneurial ingenuity ultimately led to the development of electric vehicles, the creation of billions of webpages by millions of content creators and it’s increasingly likely that humans will become a multi-planetary species this century. Shopify, Apple, and YouTube have demonstrated the potential of more open platforms as they acquire network effects, expand options, and reduce usage costs. These impacts foster a shift towards products and services that closely align with individuals’ preferences and identity, leading to massive category expansion. The potential might not have been immediately evident, but the launch of Shopify in 2004 eventually attracted a million merchants, the App Store’s introduction in 2008 preceded the proliferation of two million apps, and YouTube’s inception in 2005 eventually gave rise to an astonishing 37 million channels. Truly permissionless platforms in web3, as we are already seeing with ERC-20 tokens, will take this many steps further. Markets do not need a currency monopoly any more than they need one telco to control the internet. What the markets increasingly seek is enhanced stability, speed, and transparency, which often conflict with the presence of rent seeking middlemen. Small permissionless experiments can lead to big impacts and we are on the cusp of another do or die moment, to participate in, or surrender the next revolution. If you would like to learn more about improved capital allocation and risk management with RTokens, or to deploy your own RToken, visit Register.app or drop into the Reserve Discord for support. ### A 16 Year Journey in Mindfulness URL: https://www.furthermore.co/a-16-year-journey-in-mindfulness/ Published: 2019-01-25 Excerpt: If you are into meditation and mindfulness, welcome to my journey. I’ll use those terms interchangeably in this post. I refer to a few special techniques but do not explain them — those rabbit holes are for you to explore. Body: If you are into meditation and mindfulness, welcome to my journey. I’ll use those terms interchangeably in this post. I refer to a few special techniques but do not explain them — those rabbit holes are for you to explore. Around 2003, I discovered the book Zen of Listening, which remains to this day in my top five list to anyone who asks for a mindfulness or management book recommendation. I began attempting to meditate immediately with some of the ideas in the book. And like all new meditators, I struggled. The Zen of Listening led me to Thich Nhat Hanh’s The Miracle of Mindfulness, from which still to this day I remember a salient excerpt: “Wash the dishes just to wash the dishes,” basically a reference for just be there, now (and get ’em clean!). In 2007, I was introduced to Nancy Cooke de Herrera. She was in her 80s living in a house just behind the Beverly Hills Hotel. She had studied with and worked with the Maharishi Mahesh Yogi in the 1960s, hung out with The Beatles on their zen journey, and traveled the world sharing Transcendental Meditation (TM) as an especially influential figure in bringing it to the West. 2007 was a time when she was in high demand as many of the big music and film artists and entrepreneurs went to her for these teachings. It’s really funny to hear stories from Nancy about Madonna, Diddy, and members of Motley Crue. I sat with her for only three sessions (that is all she would allow). She taught me TM, 20 minutes in the morning, 20 minutes in the evening. There were many takeaways but one was simply profound. I was frustrated wondering if I was doing the meditation correctly (very common frustration for many) and asked her for advice. She said, “Don’t worry about whether you’re doing it right, just do it. It is not about the meditation, it is about the rest of your life.” Whoa. For me, that was liberating. “Don’t worry about whether you’re doing it right, just do it. It is not about the meditation, it is about the rest of your life.” When I heard that, it made a lot of sense, and my interpretation was that meditation is about having a discipline, having a practice. It was about showing up. Because if you can show up on something as “simple” (sounds easier said than done) as being still for 20 minutes in the morning and 20 minutes in the evening, then you’d be able to ground yourself in all kinds of other much more challenging situations. Since 2007 I’ve done a decent job with morning meditations but like other humans, sometimes I get off track and miss a week or two at a time. TM has been powerful, even if only through morning meditations. In 2016, I started using Headspace, which borrows from TM techniques and makes mediation more accessible with tools though an app on your phone. Upon first hearing about it, spiritual-me thought using an app would be silly (ohh the oxymoron). But it grew on me. Headspace is wildly addicting and founder Andy Puddicombe’s voice should be eligible for a Peace Prize. Headspace was great to meditate to while driving my work commute, eyes open of course! It was much more productive and integrative to quiet the mind while driving rather than listening to radio or podcasts or overthinking the past or the future. An intentional mindfulness break on the way to or from work was powerful medicine! This past weekend I sat in a workshop with Dr. Daniel Siegel, the author of AWARE and something called The Wheel of Awareness, which is a culmination of his 30+ years of work. Daniel is a board-certified medical doctor and psychiatrist. He does not promote spirituality (nor against it). He is a scientist. In my opinion, the best way to describe The Wheel of Awareness is that it is a science-leaning construct for the process of integration and benefits of a mindfulness/meditation practice. For those that are less spiritual and seeking a more logical explanation in a scientific context, then this is for you. Personally, being a person who straddles both spiritual and science teachings, I found The Wheel to be compelling, and to be a promising new addition to my own practice evolution. To put structure, words, and metaphors systematically around mindfulness, actually to use words to guide the range of the practice, is a powerful tool for integration of mind, body, and soul. For me, these evolutions have been exciting. As good as the benefits are, mindfulness and mediation are not yet mainstream in the West, maybe because no one can own it and sell you refills. It’s not supported by billion-dollar marketing campaigns. In fact, success with mindfulness is a direct threat to our “pill culture.” Mindfulness practice is a daily discipline and the benefits are initially subtle, but long-term very deep. Yet sometimes we go for the easy fix we can feel in a few minutes, thats both temporary and only deepens the human dis-integration. Whether you check out the books I mentioned, try out Nancy’s approach, go deeper with TM, Headspace, or AWARE, it doesn’t really matter which I liked best, I encourage you to explore and to find the one that is right for you right now, that allows you to find some peace and feel your power. For me right now I’ll be going deeper in the rabbit hole with Dan’s Wheel, and channeling some Elephant Power. Peace and love. xox