Hack the Rainbow Session 11 – DeFi in the Wild: Fair Distribution and Accessibility


Session 11 of the NEAR Hack the Rainbow Hackathon featured a high level discussion from a number of big names in the DeFi industry: Mariano Conti from YFI, Marc Zeller from Aave, and Joe Gerber from IDEO. Among other topics this session featured a big picture overview of the state of DeFi – the most important trends affecting the industry, and expectations from everyone on what is to come next! 

Point 1: Fair Launch Capital Is Trying to Mix Things Up For Funding Projects 

Joe Gerber began the session by explaining the new community-run crypto platform he is launching known as Fair Launch Capital. According to him, the guiding vision behind the project is to find an equitable way to fund projects so that everyone stands to benefit: Founders, Long-Term members, and whales of course. The only problem – It is a process in figuring out exactly how this is possible: 

“I’ve heard the word fair so many times and we can see from release of YFI everybody thought it was fair. However, it was still a whale’s game. Is it fair for whom? Is it fair because it is distributed far and wide? Is it fair that the team that spent years building something has to rely on the community? There are so many nuances to fairness. We got the influx of meme coins and food coins, which I don’t count in all this, but I am intrigued to see where do we go with all this.”

Point 2: Is the Uniswap Air Drop a sign of things to come? 

Yalor, who helped moderate the panel, started the next topic off with one of the most insightful observations of the power of DeFi to date: 

These mechanisms that we are creating and experimenting with now are very innovative. For example, Uniswap dropped more funds to its users than the US government dropped to its citizens in the form of a citizen check. If more projects and organizations will start doing this, it will be an engine of funding for individuals doing things inside the DeFi ecosystem. What do you guys think?

The retroactive airdrop from Uniswap showed the future of DeFi, as well as the opportunity to leverage crypto as a foundational model for Universal Basic Income. Joe added this point about the Uniswap drop:

This shows the power of DeFi and its power to change the world. A USDT stablecoin in an environment with inflation is a gamechanger. People all over the world have new and different opportunities. The second interesting thing is that Uniswap dropped the coin retroactively. This means that the people that were using the product because they liked it and not because they thought that they would be rewarded. And that seems very fair to me. I think more projects should follow that path and drop the tokens retroactively. 

Point 3: Mass Adoption and Community Contributions Start on Layer 2! 

Perhaps one of the most insightful points from the talk was the discussion about future contributions to DeFi and mass adoption. What was the general consensus? That it will start on Layer 2 solutions building on top of (and even across) Layer 1 protocols. Not only is this an interesting insight in it’s own right, but it also holds important repercussions for the future development of NEAR protocol in the context of Decentralized Finance. Marc chimed in for this one: 

 “Mass adoption can only happen on Layer 2, more than 80% Ethereum users in the future might not interact with layer 1 and I am completely fine with that. They don’t have to, they can insert fiat into yield farming through a bridge, no need to interact with layer 1. With Aave we have quite a community in Argentina, we have a lot of community there that got some DAI and deposited it in Aave, and we are working on the solution to make these people pay less gas fees, and the solution is to make them interact with Layer 2 directly.”

The power of this response in the context of the NEAR-ETH Bridge is the following: NEAR will soon have the capacity to contribute to the evolution of DeFi by offloading ETH applications – that are still built on ETH – but are looking for cheaper transaction fees to scale more quickly. The technical foundations of NEAR paired with the current limitations of ETH make this an exciting time for NEAR protocol. 

For more detailed Notes on the Talk See Here