Historically, financial systems have been mismanaged by states, corrupted by entrenched private interests, and unable to deliver an equitable, fair, and transparent baseline to enable unfettered value exchanges.
Over five years ago, I discovered the (back then) nascent decentralized finance ecosystem and was promptly convinced it embodies a credible attempt to deliver a neutral value exchange layer, freed from the influence of states and able to resist the corruption attempts of private actors.
Indeed, the Ethereum network provides a neutral ledger, enabling users to transact in a purely peer-to-peer fashion. Its ability to support smart contracts allows for the creation of various protocols for more advanced use cases — some of which can approach the network’s resilience level, such as Uniswap, a financial primitive providing infrastructure for the permissionless exchange of any token that will operate as long as the Ethereum network synchronizes.
Thus, I progressively became more engaged and committed to upholding and delivering on this vision:
- In 2018, I started to write and share about DeFi on various mediums, and eventually launched this blog a couple of years later.
- In late 2019, with friends, we launched DeFi France to nurture a supportive environment to broaden adoption and involvement in DeFi amongst the French-speaking communities.
- In 2020, I started to host live shows in French to document the most relevant DeFi protocols and deepen the users’ comprehension of them.
- And finally, in 2022, I joined the Liquity team, to help grow the adoption of LUSD, a critical piece of infrastructure in my perspective, as it remains the most resilient stablecoin available to date.
It’s time to introduce my latest commitment to help the DeFi ecosystem deliver on its initial promises: The DeFi Collective. The DeFi Collective attempts to solve a structural imbalance that could ultimately lead DeFi to fail to deliver on its core values. DeFi suffers from an inherent tension between delivering on its base values and the concessions some think are needed for growth and adoption.
The most widely adopted protocols are rarely the most resilient, and we at the Collective believe it stems from an incentive misalignment:
Teams who tightly control their protocol (usually through multisigs) and harness aggressive tokenomics models tend to have more firepower to attract capital and promote themselves than those who value security and sturdiness above all else. We picture the Collective as a critical resource in reverting this imbalance.
How? It’s straightforward; you’ll see that the DeFi Collective delivers a competitive edge, allocated only to the highest-quality DeFi protocols. Protocols that ensure open, transparent, and resilient public infrastructures will receive the support of the DeFi Collective, free of charge and without conditions.
The DeFi Collective is a Swiss nonprofit association incorporated in Zug, bound by its status to use its resources to support the most resilient and relevant DeFi protocols. What does this entail? The Collective will clarify and publish its “protocol guidelines” shortly after launch: any protocol that matches them is eligible for its support.
But what kind of support are we talking about? About all the critical expertise a protocol needs to harness to grow and thrive:
- Liquidity management
- Awareness and education
- Integrations and networking
- Legal & self-policing
The Collective is a group of experts that cannot be hired; instead, it self-appoints on protocols that match its demanding guidelines. Embodied by the ants, The Collective intends to demonstrate that social coordination is paramount. Together, ants will build an ever-growing colony, acting as an organic mesh network nurturing an ecosystem where trustless DeFi can thrive.
To deliver on its vision, The Collective received support from top-notch teams that align with it, including Liquity, Maverick, CatInaBox, Diva, DYAD, Zero & Retro. It enables the Collective to be self-sustainable from day one, and able to direct and sustain over $25M of assets in liquidity pools of relevant DEXes across various layers, including mainnet, Optimism, Arbitrum, zkSync, Polygon zkEVM & more.
Indeed, the Collective controls sizable liquidity-driving positions, including veVELO, vlLIQ, vlAURA, veRAM, veZERO, veRETRO & more, and manages treasuries on all the networks mentioned above, to support the liquidity of relevant tokens through liquidity-driving votes and liquidity-providing activities. The Collective adheres to extremely risk-averse treasury management practices intended to preserve and grow its capital in a manner that is synergistic with its goals and vision.
Liquidity management and support is a critical area of expertise for the Collective that I will champion, along with governance-related activities to increase the adoption of the tokens from the supported protocols across the broader DeFi ecosystem. However, the DeFi Collective is an adventure much bigger than myself, and I am blessed with the support of two equally critical founding board members – Nils Bundi and Florian Prantl, who deliver on their expertise in their respective areas:
- Nils Bundis is a DeFi protocol architect and developer with a background in financial engineering. As an experienced DeFi builder, he knows the challenges of building “truly decentralized” protocols. Apart from the technical depth, Nils will also support the Collective with his expertise in the operational requirements, ensuring secure and trusted DeFi services.
- Floria Prantl is a lawyer and policy specialist with a background in advising DeFi and CeFi projects, navigating the legal and regulatory pitfalls in setting up and expanding their services. He also brings valuable experience advocating with authorities for progressive and balanced regulations. At the Collective, he particularly lends his expertise to operational compliance, offering guidance to supported protocols and contributing to the Collective’s self-policing, networking, and other vital initiatives.
Their skills and knowledge will help the Collective to conduct research, establish and promote self-policing guidelines, and entertain any other relevant activities deemed necessary to deliver on its vision of supporting the existing resilient and DeFi-aligned protocols and foster an ecosystem where protocol builders have increased incentives to walk the path of sturdiness, immutability, and resilience.
All board members and contributors to the Collective are capped to a commitment accounting for at max 50% of their working hours. This policy was designed to keep the structure in check and avoid situations where the preservation/growth of the structure is given more priority than achieving its end goals, which is often seen in public institutions and associations.
Contributors have agreed to compensation well below the market rate for their efforts. Boardmembers are not compensated for their activity. This enables the Collective to minimize its starting expenses and aggressively compounds its earnings to grow its onchain treasuries, giving it more means to deliver on its vision.
The DeFi Collective is now my main focus and commitment, meaning that I will sadly no longer be able to contribute directly to Liquity as a team member. It was not an easy decision to make. Still, it was necessary to enable me to keep focusing on my areas of expertise (liquidity management and governance) and keep growing them. As one of the most resilient lending infrastructures available, the Liquity protocol matches the Collective guidelines and will be part of the supported protocols amongst several others to be introduced shortly. The Collective will thus be able to support Liquity’s growth and expansion with liquidity-management-related activities and help LUSD get more broadly supported across DeFi protocols and L2.
Do you resonate with the Collective’s vision and want to make a difference in DeFi? You can shape the Collective: let us know about your unique expertise to assist the collective as a contributor or a friend, or get actively involved to join as a member – all of this is happening on the Collective Discord: a place to be!
To keep in touch with The DeFi Collective, you can also follow us on Twitter, where we will update the community with our news, including the upcoming first Collective Live Session I’ll be hosting: join us Thursday, October 19, at 7 PM GMT+2.
Learn more about the Collective: