Today I came across a little interview someone posted up featuring the dude who has made the most money on Augur so far (over $500,000). I thought it was a pretty interesting read because it shows evidence of some kind of product market fit. Why would someone use a decentralized application with such large sums of money where the technical risks/failures can be so high?
Turns out financial inclusion and platform censorship was his biggest problem. Most places he went to in order to try and bet on the outcome of the 2020 mid-terms would:
- Ban him altogether from participating on their platform
- Platforms censoring markets such as election outcomes
Taking for granted he already believed in Ethereum, was tech savyy and had money, he was able to find genuine value in all of this really cool technology being built. As part of this recent bear market, everyone points to vauge resasons for crypto not taking off like “bad UX” or “no real user value”. But no one actually takes a nuanced view of what actually needs to be fixed and how might we genuinly create value.
I think it was on an a16z podcast where someone talked about how things in crypto which are interesting are the things which fundamentally could not exist in the existing world. A new paradigm altogether. Glimpses of this paradigm were visible in the bull market but still too early for their time. I personally think tokens are such an example of a paradigm shift which will be dominant in the future. Early liquidity creates powerful incentive structures coupled with a new form of value creation. The 2017 run up was an example of how this might play out but didn’t have enough substance.
Going back to Augur though, one thing which is a really powerful property is allowing us to bet on things we wouldn’t otherwise be able to bet one. Think about it, have you ever been able to bet on whether a friend of yours will break up with their partner? Kind of crude but very much could create a market where one wouldn’t have existed before. People on the internet express their opinions and desires to their fullest extent. Imagine being able to gain exposure and earn real money from that. There’s still a bunch of technical limitations and liquidty problems but I think it can be good frameork to think about how the future might play out.
In crypto everyone seems to love this idea of “banking the unbanked”, however I personally don’t see it happening for a long time. The first generation of people who actually need to be banked are teenagers. They’re the most technically savvy generation and have an immediate use for programmable, global, cross border payments out of all demographics. The games they play, the networks they engage in are not defined geographically and by one country’s financial system. I’m kinda thinking out loud here but apart from commoditising trust, maybe the use case for crypto is creating markets and financial opportunities where they weren’t available in convential ways?
There’s still a lot more refinement required for this idea but it helps to dream of what could be with all this amazing technology that we’re creating.