Re: Crypto/DeFi—Cherry Popped, First Impressions.

Well, as I’m sure most of us can relate to, the first experience can be somewhat bewildering/painful. I share some initial thoughts.

I’ve been reading/studying this topic for quite some time, but to extend the analogy, there is no substitute for doing.😎

My motive to do this was 100% to learn about DeFi and 0% to speculate in this stuff, so my transactions were actually meant to incur slippage to see what it was like. And boy was there slippage — in both time and $.

First, getting over the KYC/AML hump was a huge pain in the ass. I had trouble getting all payment rails to approve Metamask, for instance.

You know what sucks about decentralization? NO customer service or accountability. In the end, I had to PayPal funds over to Coinbase — used 2 CENTRALIZED services to funnel funds so I can learn about “Decentralized Finance.”🤣

Ok, so now I have $ in Coinbase and proceeded to buy some BTC. So far so good. I then converted it to ETH. Also easy.

Then I tried to send my ETH to my Metamask wallet since I couldn’t get any payment rails to approve it directly. That’s when I noticed my ETH disappeared from Coinbase but didn’t show up in Metamask. Doh!

I kept retracing my steps to see if I messed up the address or did something wrong. Guess what it was? More KYC verification emails stuck in my spam folder!

Finally, after getting all the KYC stuff done, at least I now had ETH in my Metamask wallet! Now I’m ready to do damage in Web 3.0!

First thing I try is to Uniswap part of my ETH into USDC. Easy enough to do, but boy do those gas fees suck.

Next thing I try is to lend out some of my USDC on Compound/AAVE. Easy enough to do, but BOY DO THOSE GAS FEES SUCK.

Finally, I try to participate in a liquidity pool on Uniswap, but at this point, I’ve already locked up my USDC and pissed away a ton in gas fees, so I’ll save this part for another day.

So what are my thoughts? Intellectually, I think these DeFi apps are pretty cool, and I’m realizing how deep the rabbit hole goes as I read about all these “faster/better” protocols/chains.

Despite crypto valuations, I think Web 3.0 is FAR from prime time. Seems like most applications involve lending/staking/providing liquidity to earn “yield.”

Of course, it all works because of the speculative forces giving these ecosystems the lubrication needed — monetary value.

There is no question that fiat money is pouring INTO these ecosystems. And once in, there’s some cool shit you can do WITHIN the ecosystems.

The bigger question is whether these ecosystems will produce lasting applications that can consistently spin off cash flows OUT of the ecosystem.

Here is a passionate portrayal of “Web 3.0.” The big problem in his argument is that the token valuations that make these ecosystems work are all based on centralized value accrual dynamics. Sounds a bit like George Gilder repackaged for this decade.

What’s ironic is that the same bullish arguments around ETH revolve around it being a native currency required for DeFi; these are the SAME arguments for why the USD is so hard to dislodge for “real world” applications.

So this was my first 24-hour foray into crypto. Consider me an intrigued but still skeptical tourist. I look forward to learning more.

Amazing. Within minutes of my tweet, I got multiple messages from “Metamask customer service” trying to scam me. Watch out for this guy. 2nd lesson learned: you can get ripped off VERY AND easily in this world.