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EA Opportunity in Defi and Cryptocurrency: Lots of DeFi Development protocols aren't truly decentralized. They may operate autonomously, but like centralized entities, they have actual control oversight by a group or an individual.
EA Opportunity in Defi and Cryptocurrency: Lots of DeFi Development protocols aren't truly decentralized. They may operate autonomously, but like centralized entities, they have actual control oversight by a group or an individual.
This seems like a fair opinion to have if you look at crypto in isolation, many people are divided, I am as well. If you wish to defend it perhaps you could write a separate post.
From an earning to give perspective IMO still be locally* positive to work in the crypto space - SBF has done more good via EA than harm via crypto CO2 emissions.
I'm personally not sure if messing up the economy is a worthy consideration, I'd be keen to know your thoughts on that. I currently assign a very low probability that BTC market cap will become 2x of gold's market cap for instance. (But sure, even a low probability could in expectation be dangerous.)
I've worked in DeFi, it is a very interesting space. I saw that you were taking a break, but if you (or anyone else reading) would ever like to potentially collaborate/cofound a new protocol, I'd love to explore ideas. Message me on Twitter @ProofofSampson
As someone who has recently taken a break from the "decentralised finance" space, I thought people here might be interested in the tremendous earning potential that exists there. It's significantly higher than your average tech startup imo.
I'll link articles cause I'm lazy
https://www.lesswrong.com/posts/nMNi86hgNjaNnh8iu/a-whirlwind-tour-of-ethereum-finance
https://thedefiant.io/defi-101/
Here's a list of the richest folks in crypto at the moment.
https://news.bitcoin.com/worlds-wealthiest-annual-ranking-now-lists-12-crypto-billionaires/
Here's a list of the top DeFi protocols.
https://www.coingecko.com/en/categories/decentralized-finance-defi
That's a sum total of over $100 billion in market cap, with the top 50 protocols all above $300 million in market cap each.
Assume on average each protocol has about 25% of tokens allocated to founders. Assume each protocol has a core team of 5-10 people who own the lion's share of these tokens. (Yes, teams are that small, atleast the core team who own most tokens)
Averaging it all out, that's about 500 people generating $100 billion of value, of which they own $25 billion, amounting to $50 million per person. Which is insane.
Even if you take a conservative view that your 10-member team's protocol will only hit $300m market cap, that's $7.5 million per person.
What about failure rates?
coingecko has about 350 DeFi protocols listed, and they list anything that is not a straight-up scam. That means getting into top-50 is a 1-in-a-7 chance. More so if you're smart.
I didn't work on the investment side, although I had some contacts. Investment funds capture tremendous value too - if 25% of tokens belong to founders, 75% belong to investors - both retail and professional. Sam Bankman Fried probably being the most popular example in this forum.
There's high-frequency trading and miner-extractable-value (MEV) capture, market-making, seed stage investments into protocols, and general funds that look for undervalued protocols and assets.
Imo seed stage is most profitable. MEV is probably the most fun.
Crypto has a highly remote meritocratic culture. If you're smart you can make it. No boring interviews, no university degrees mandatory, geography not critical, no feudalistic insider classes (not yet anyway).
It's also quite fun in some ways, community on twitter is full of both users and developers and is one of the most interesting I've ever come across.
I personally was offered the chance to work at Rari protocol - a lending and borrowing protocol run mostly by 17-20 year olds still in high school / university. Compensation I was offered over 4-year term was significant. And I was a nobody, a 20-year old from India shitposting on twitter, publishing my insights until I could prove I understood technical concepts well. (I finally denied the compensation, but that's a separate matter)
Crypto protocols are in hypergrowth, because you just need to ship code and build communities. No legal work, no incorporation, limited server-side infra to maintain, nobody's permission to ask.
I honestly don't know, this mostly depends on your opinion of the future of the space. You will encounter a lot of scammy behaviour, a lot of retail investors being sold false promises. You may have to stay quiet on some matters to avoid career risk. It's definitely interesting, and is probably a net-positive from an earning-to-give perspective. (i.e. you may be able offset any harms with the profit and how you use it)
Further analysis of benefit versus harms may be worth doing though. Immediate harms are climate impact and being bystander to scams. Climate impact is very easy to offset in dollar terms, although ofcourse offsetting in dollar terms doesn't solve the systemic issue.
Wow! Thank you for this fascinating write-up!!
I've met folks at Complexity Weekend and RadicalxChange working on DAOs, NFTs, blockchain and crypto-related activities. Definitely something for EAs to explore...