Minutes of the meeting: How will DeFi develop after the Ethereum merge?
Ricky: CTO of NEST
Blue: Marketing Lead for Trader Joe
Angel: Smart Token Labs VP Corporate Development
Nick Avramov: CMO & co-founder of symbiosis_fi
Apetastic: Smart Contract Development & Security for ApeSwap
The current situation of your DeFi project for the last 1 year?
Nick: I’ll say now is an interesting time, because even though we have experienced all these market crash, I believe this is a really good time for builders because at least for some point of time, we will have another bull round which is not constrained on prices, but better building something which resolves existing user problems. I expect more next generation protocols will come up, in GameFi and non-financial operations of work.
Blue: We are integrating services inside the wallet and help to allow people in exploring the new interesting profitable projects. Generating speaking, we are working to enable in the tools for people to be able to feel safe in the current environment.
Apetastic: We focused much on the highly partnership, and we were making new connections. Things were harder in the downturn, but I also believe this is a great time for building, with less competitors and new products.
Blue: The mission of trader joe is to make DeFi more accessible, and I think like most projects working in DeFi right now, is not great as the market is not great. There’s significant outflow of liquidity, which is a problem. So, we are also trying to build the project, pushing forward new products, driving innovation in the space to deliver new solutions that can help in user experience.
Ricky: We think it is very necessary for improving the future DeFi projects, and that’s why we transferred into a PVM generator. Recently we are developing our communities.
Do you think the Ethereum merge is positive or negative to DeFi projects and why?
Nick: I believe the merge is definitely positive. One shortcoming would be the loss of miners as they might move from Ethereum to other things, but I believe the market would adopt, and there’s still image. And going from POW to POS is not about re-economy, it is about carbon neutral, which is very important.
Angel: There’s two ways of thinking about this. I think it is positive because we do not have a large access to the pool of people, only in the bull market will people know we are a very different and specific part of the world, so they could be included into the DeFi space. But it also could be negative as this is creating opportunities for centralization.
Apetastic: The biggest problem is the transaction throughput and lower gas fees which is unfortunately not seen in the Ethereum merge. But we fully support the merge, and it is more positive.
Blue: From my opinion, stronger Ethereum implies stronger confidence in the market. A step in the roadmap like this could be reflected across the market, and it could benefit every player in this market. So, it would be very positive even though I’m not sure on the short-term risks and potential centralization.
From the perspective of security, what’s the impacts to DeFi projects after the merge?
Nick: The network might be anxiety, so this is a time to break up. The merge is really something that a little enhance the security if you use the network. So I think there won’t be additional threat with the merge.
Angel: We actually not sure if this could create new vulnerability. We think one security problem is the information misunderstood. Some users do not know what this means, and people staked tokens would concern if there’s vulnerability, which create the uncertainty. Let’s see what the government would regulate the DeFi space.
Apetastic: Actually, I do not think the missing information would be a problem. And the consensus of Ethereum would be much more secure, so there might be an increase of use of it.
Blue: This consensus is greener, which is a pretty compelling point of world, so it is great so see this merge.
Which category of DeFi will be most affected after merge?
Apetastic: In my opinion, the AMM would be affected most, just because it is the center pieces of the decentralized finance.
Angel: We’ve seen the negative market over the last couple of years, and it’s not only about the DeFi, but also about the tokens, NFTs, etc. When you create a DeFi protocol, you create artificial tokens, like governance tokens, this could be deflating if you’re not adaptive enough. There will be lower fees, so people could move between different protocols dynamically. So basically, the adapting and good partnership is important
Blue: I think we might see the risk of centralized stable coins, see if it could adapt within this network. All centralized things for me have some risks, and we need adapted decentralized stable coins.
How do you prepare for the Ethereum merge, from your own project perspectives?
Angel: We would help in the missing information mentioned, mainly help people know what this development is.
Apetastic: We are looking at it in case there are some unexpected down time, such as the oracle attack.
Blue: There’s no interruptions to our service, so it’s not something we need to consider internally.
In the end
It is a great discussion on Ethereum merge’s impacts to DeFi projects, we will have our 3rd NEST Roundtable (Twitter Space) on Sept 12th, and discuss “Ethereum merge is coming, opportunities and challenges to infrastructure, DAO and DeFi?” Please follow our twitter feeds and don’t miss out!