- Projects like MakerDAO, Compound, dYdX and Dharma realized in 2018 they were a distinct group with shared interests within the cryptocurrency industry.
- Finance has been part of Ethereum from the beginning, but the first attempt to do finance on the “world computer” ended in disaster in 2016: The DAO.
- A unit of account was key to make decentralized finance (DeFi) startups usable, so when dai launched during the bitcoin runup of late-2017 and didn’t crash when ether fell, it was a positive signal for the space.
- Within a year of dai’s launch, a full stablecoin boom was underway.
- The third big moment for DeFi came this summer when liquidity mining took off on Compound. Some $3.6 billion in crypto is currently touching the industry’s DeFi platforms.
“In May 2018, Dharma hosted a meetup at the Polychain offices in San Francisco, called the ‘Decentralized Finance Meetup,’” Dharma co-founder Brendan Forster told CoinDesk this month.
It included all the early companies – the Maker Foundation, Compound Labs, 0x, dYdX, Wyre – and he said roughly 150 people showed. Forster credited the gathering with a dawning realization at the time that DeFi startups were a distinct “cohort” within the industry.
Now in 2020, that cadre of DeFi upstarts has become the best justification for the persistence of the world’s second-largest blockchain.
The name from that meetup – “decentralized finance” – stuck, because “decentralized” was more specific (and perhaps aspirational) than prior terms like “open finance” or “crypto-finance.”
Its shorthand, “DeFi,” had that double entendre with “defy.” Disruptors gonna disrupt.
From that Spring 2018 soiree, assets committed to DeFi broke $1 billion in February 2020, $2 billion on July 1 and $3 billion just 20 days later. At this…