The gm Portfolio is focused on decentralized exchanges which will be the majority of its core positions. Why DEXs?
At this early stage of the DeFi arc, the products that have found the highest level of product-market fit are DEXs, perpetual swap platforms, and lending platforms. Other niches, such as options and insurance, are still very much in their infancy.
So why focus more on DEXs and not on lending platforms or perpetuals platforms? Because they have additional layers of risk that DEXs do not. Anything that involves collateral can blow up from liquidation failure like MakerDAO did in March 2020, necessitating, at the very least, rescue via token dilution. And any protocol that uses outside price discovery risks oracle failure.
If I was the founder of a lending or derivatives protocol, I wouldn’t sleep easy at night. I would toss and turn, haunted by visions of a gaggle of ineffective liquidation keepers laughing at me instead of doing their job. I bet Hayden Adams suffers no such nightmares.
The universe has demonstrated a knack for finding weak spots in DeFi protocols and bludgeoning them with a sledgehammer. Smart contract risk is hard enough to manage on its own. It’s all the more difficult to manage additional layers of risk on top.
(Note that some DEXs do have collateral and/or additional layers of risk on top: THORchain has collateralization of synthetic assets, Bancor once had impermanent loss protection, etc. In addition, this bias of favoring DEXs as core portfolio positions is simply a starting point in portfolio construction.)
Hey guys, I love your content and want to know how I can best support your content. Recently, Paragraph launched NFT collectibles for blog posts [https://paragraph.xyz/@blog/collectibles], and I was curious if you've considered making these available for your publications. These NFTs could come with special perks for collectors, such as exclusive content, group discussions/mentorship opportunities, or affiliate codes to products/platforms you'd recommend to other analysts and researchers in web3. This will better engage your readers, help expand your audience, and create a sense of community for those who want to be more involved with your work. @Colin has a discussion on Farcaster about this, and I'd love to hear what your thoughts are on the topic https://www.discove.xyz/casts/0xbe932b592d0191419b4c854d4e5d8e351a578d34
Hey - thanks for the support. We're keen to expand wherever possible and will check out that thread now. We've been researching Farcaster. What are your thoughts on the audience over there? Would it be a fit for our research? Gm