I shit on DeFi project all day… and now I'm launching my own

09 Sep, 2021
"This is bullshit"

Just for fun, add “Blockchain Developer” onto your LinkedIn profile and see how many messages you receive in a day from DeFi projects which is working on something exciting and revolutionary.

Or maybe look at the r/CryptoMoonShots subreddit to see the crazy number of projects launched every day that promises:

  • Fair launch
  • Active dev team with long term goals
  • Buyback and burn
  • … and many more

If everyone is making money in the ecosystem, then who is losing money? In fact, most projects out there are simply the game of the greater fool — it’s alright to be a fool, you just need to bring along a greater fool to recoup your losses. If you are lucky, the project that you’ve aped yourself in is a zero-sum game. If you are not, you are just fodder to the anonymous devs.

You will see why it is so hard for me to take any DeFi project seriously…

Back to where I left off in the last post, where I was in an accelerator, Entrepreneur First, where I met some amazing folks like Sherry, Jeff, and the rest of the Fintech enthusiasts in the program. I was deliberating working on privacy (which is the core of my research at RxC) or mental health (which I’ve had personal stories about) when I heard Jeff share about the cash situation in Myanmar…

Because of the covid and coup situation, there is a bank run on the retail banks. As residents rush to draw out huge amounts of money in cash for fear of yet another banking crisis, the country faces a huge shortage of cash. The level of distrust of the “digits in the bank” was so real that you see citizens rushing to buy properties, cars, and even iPhones initially to get rid of money in the bank. The use of existing mobile banking solutions has also come to a grinding halt when people stop accepting bank transfers altogether (plus the fact that interbank transfers are broken too). Citizens with cold hard cash are hoarding and not spending them for fear of not having any in the future. Enterprising individuals are also offering services to convert bank balances to cash at 7-15% premium on Facebook groups.

Taking a step back, what we are seeing is almost exactly the baby-sitter economy described by economist Paul Krugman (I love his series on Masterclass). The story talks about how when “too many people are chasing too little scrip” the economy can go into a seemingly intractable slump — I suggest reading the full article in its entirety.

Looking at that, the question changed to, how can we get more “cash” onto the hands of everyday Burmese without resorting to “printing cash out of thin air”?

I know a project that does exactly that…

MakerDAO’s approach to DAI allows anyone to “mint” the USD stablecoin by collateralizing assets like ETH, USDC, USDT, etc. This makes sure that the minted DAI is backed by more assets than it’s worth and will be needed by the system to unlock the underlying collaterals. From a systemic point of view, DAI is simply debt to the system that is lent to the greater DeFi market for their needs.

Similarly, if we can compose a mechanism to track the local currencies and have them be backed by more value than they’re worth we can create a trusted value of exchange that is more trustworthy than bank balances and more liquid and mobile than cold-hard cash.

And… if we can tap into the resources of the greater DeFi ecosystem for users to temporary re-allocate their capital towards providing liquidity for the local Myanmar Kyat (MMK) currency, the protocol may even be able to sustain business remittances between Myanmar and its import/export partners! The cherry on top, it’s a chance for users in the DeFi space to contribute to ESG goals!

That was our light-bulb moment and I know that I’ve to launch a DeFi project amongst the other bullcrap…

So fast forward 2 months of non-stop actions from the amazing Bluejay Finance team, we are now launching our first token on the market to fund our upcoming smart contract audit on our multi-collateral multi-currency collateralized debt position smart contract.

The team knows that meaningful work is hard work, and there will not be any promise of any returns even though the launch has been made to be as fair as possible and there are mechanics for the system to generate value.

For what it’s worth, BLU represents the vision where I see remittance transaction costs to be less than 3% and remittance corridors with more than 5% transaction fee are eliminated entirely by 2030.

Come join us in the community discord if that sounds interesting to you.

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