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Why We're not talking about Russia & Where DeFi goes from here 📈

Why We're not talking about Russia & Where DeFi goes from here 📈

Shaan Puri & Ben Levy
February 24, 2022

GM, this is the Milk Road. Your tour guide around the wild wild west of crypto.

Russia and Ukraine
The State of DeFi
The Punks are pulled out at Sotheby’s
What Elon said backstage with Rick Ross

Russia & Ukraine

Someone asked if we were going to talk about the Russia/Ukraine thing today.

No, and here’s why:

My grandpa taught me two big lessons:

#1 - “At school, you don’t have to raise your hand if you don’t know the answer”

#2 - No matter how good the hand soap smells, don’t walk out of the bathroom sniffing your finger.

On days like today, I think about #1.

I don’t know the first thing about what’s going on in Ukraine. And unlike some VCs in the tech industry, I won’t pretend to suddenly become a geopolitical expert with a minor in pandemics. So we’ll leave foreign wars and politics out of this newsletter as much as possible.

Do I wish there was no war and suffering? Absolutely.

Do I have anything insightful to share? No.

Do I still believe that we should have digital money that is global, programmable and not controlled by any company or country? Absolutely.

*crowd goes wild*

OK then. Let’s keep the Milk Road focused on crypto’s progress towards achieving that dream.

And if you wanna read someone's (SBF) take on what's happening and how it could impact crypto, go read this thread.

/end of rant - back to you, Ben.

The Chart of the Day

There are now 4.4 million DeFi addresses, up 203% from a year ago. (**warning, cumulative chart)

A great thread about the state of DeFi

I found this great twitter thread from Sean Lippel about DeFi. His bio says he’s a former poker player and an investor at Fintech Collective where he does crypto investing in DeFi protocols.

Here’s what he had to say about DeFi:

1/ Most DeFi tokens are down 80-85% from their all-time highs

2/ So… is DeFi dead? Nope. Total value locked (deposits) in DeFi is now ~$200B.

3/ If Ethereum’s DeFi protocols were a bank, it would rank as 19th largest bank in the US

4/ Crypto investing moves based on memes & narratives. And DeFi isn’t at the top of the list right now.

5/ We’re still early.

Global banking = $20 Trillion market cap
Fintech = $800b market cap (4% penetration).
The top 10 DeFi protocols = $31b fully diluted network valuation today (1.5% penetration / market capture).

6/ DeFi Protocols make real revenue (transaction fees). Many are making $100s of millions and passing those through to liquidity providers and token holders.

7/ There are still many obstacles. Regulation. Price drops. Hacks. Same as all of crypto. But long term still very bullish on DeFi.

The full thread has more details. If you’re a beginner when it comes to DeFi and want us to offer a DeFi for Dummies course, sign up here.

The 104 Punk Auction

Two weeks ago, we talked about an auction of 104 punks that were going up for sale at Sotheby’s on February 23rd (last night).

There was a ton of chatter that they’d sell for $20m - $30m and the original buyer would make somewhere between $13m - $23m of profit in 8 months (he bought all 104 punks in one transaction in July for $7m).

But then something weird happened.

The live YouTube stream of the auction got "stuck" on this screen:

Speculation hit:

Only two things could’ve happened - the seller made a private deal last minute or he didn’t think he’d get enough interested bidders.

Then the seller sent three tweets:

Hmm… what a sudden change of heart. Maybe the demand wasn’t there.

As Haralabob put it: who would be “dumb enough to pay an auction house premium to buy 104 basic floor punks – on the brink of WWIII no less.”

Today's Milk Road is brought to you by Trends 📈

Okay, quick sidebar to talk about one of my favorite communities…Trends.

Trends has a full research team hunting down the next big thing. They break down the latest market trends in detail and give you what you need to be ahead of the curve, straight to your inbox.

Plus the community is full of interesting people. I’ve connected with some awesome folks, from small business owners to established professionals, and even investors looking for their next project.