defi is facing its biggest challenge today
you can build for whales, get 50 dudes with liquidity, and have an hugely successful protocol that can’t charge revenue without alienating them
or you can build for retail and earn real revenue—but good luck onboarding them en masse
i do think the real answer is… you need both
aave might have cracked the code here
the problem with nearly all of the most successful crypto apps is that they're designed for whales to extract from retail.
and the problem with the least successful crypto apps is that they don't have whales at all to help drive the ecosystem.
there's a simple solution here, the solution for any market that's lasted long-term.
whales need to be able to enter—but they should enter late with low-risk and low-reward that helps subsidize the earlier entrants who came in with high-risk and high-reward.
any successful startup has always worked this way, for example. earlier investors write small checks they expect to go to 0. but if it succeeds, whales will follow on with far fewer—but more certain—gains. the minnows should be able to make money off the whales, not vice-versa.
the only crypto apps i can really think of that have managed something similar are lending/borrowing apps. whales can park capital for steady returns as lenders. borrowers pay higher rates to leverage capital and often go to 0, but when they earn, they can earn big.
this needs to be the model for all apps to be sustainable.
and on that note: stay tuned.
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