Odd Lots Tom Schmidt Explains What You Need to Know about DeFi
Jun 28, 2021
In this engaging discussion, Tom Schmidt, a general partner at Dragonfly Capital and crypto expert, breaks down the often confusing world of decentralized finance (DeFi). He explains key concepts like governance tokens and the appeal of yield generation. Schmidt also highlights the risks of impermanent loss and the vital role of trust in DeFi systems. Additionally, he explores innovative synthetic assets that could redefine capital access, all while pondering the regulatory challenges that lie ahead.
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Tom's DeFi Journey
- Tom Schmidt's interest in crypto began in college with a paper on Bitcoin regulation.
- He later joined ZeroX, an early decentralized exchange, and now invests in DeFi at Dragonfly Capital.
DeFi Yield Origins
- High DeFi yields often come from protocol tokens given for activities like lending or borrowing.
- These tokens represent governance rights and potential future cash flows, similar to equity.
DeFi Value Proposition
- DeFi offers permissionless access, innovation, and transparency.
- It also boasts programmability, exceeding traditional fintech limitations.