Challenges and Innovations in Private Credit on the Blockchain

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This chapter explores the recent default on a loan from Lenn East to Gold Finch, shedding light on the difficulties faced by private credit protocols, particularly in emerging markets. It compares the performance of private credit funds in traditional finance to the risks in DeFi protocols like Gold Finch, discussing concerns about attracting capital in a bullish market. The conversation delves into the complexities of credit assessment, default recourse, and under collateralized lending in the DeFi sector, emphasizing the necessity of solid loan recourse mechanisms and innovative solutions for on-chain credit markets.

In this episode, the Blockworks research team examines Solana's transaction failures and the network's ongoing struggles to handle high transaction volumes. The conversation then turns to the MakerDAO and Aave debacle, debating the risks and merits of MakerDAO's decision to collateralize DAI with Ethena's stablecoin. They also touch on the recent default on Goldfinch and the broader challenges facing on-chain private credit markets. Finally, they explore the rise of Pump.Fun and the resurgence of meme coins.

As always remember this podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice.

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https://x.com/_nishil_/status/1777048334664081548

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Timestamps:

(0:00) Introduction

(1:08) Enabling Arbitrum Stylus

(5:08) Velodrome DEX on Bitcoin

(7:40) Solana & SUI Airdrops

(13:39) dYdX Permissionless Smart Contracts

(18:15) dYdX Segment: Axelar

(22:53) Solana Transaction Failures

(31:57) Aave & MakerDAO Debacle

(43:37) Goldfinch Default

(51:43) Pump.Fun Meme Infrastructure

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Disclaimer: Nothing said on 0xResearch is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Dan, Sam, and our guests may hold positions in the companies, funds, or projects discussed.