In 2020, decentralized finance was Ethereum’s trend of the year – and with that honor came a thousand new terms and even more memes. But more importantly, the success of DeFi proved an essential quality of Ethereum this year: that real high-volume apps are possible on the still-nascent network.
New protocols shipped, new tokens were issued and the total value locked (TVL) in decentralized finance protocols surged. Ethereum’s culture evolved. People began speaking of degens, short for degenerate gamblers, as thousands of pseudonymous, money-hungry token-holders blindly sought yield in sometimes questionable assets.This post is part of CoinDesk's 2020 Year in Review – a collection of op-eds, essays and interviews about the year in crypto and beyond. Kevin Owocki is the founder of Gitcoin, a project that funds public goods with blockchain-based technology, and he wants you to quit your job to code.
Given how meme-driven this craze was, it was not long before it spread through the whole of Crypto Twitter. Prominent Ethereum accounts tweeted about their favorite degen opportunities and walked back statements after these unaudited projects were inevitably hacked. There was plenty of action to be had though it was hardly fulfilling or sustainable.
As autumn turned to winter, degen finance had run its course. We look back at the period as a pinnacle of debauchery and greed, but the story is more complicated. The growth of degen finance has created a massive increase in TVL in many novel open financial protocols, some with staying power, and has led to the rise of what I call regenerative finance.
Regenerative finance is a cultural preference for the funding of community and the public good over (or in parallel to) projects that are expected to produce a return for the funder. In the startup world, GiveFirst means trying to help anyone – especially entrepreneurs – with no expectation of getting anything back. Regenerative finance is Web...