The billionaire proprietor of the Dallas Mavericks has gone large into crypto and DeFi. In a weblog submit titled “The Brilliance of Yield Farming, Liquidity Offering and Valuing Crypto Tasks”, he has simplified the method of liquidity provision and yield farming.
DeFi yield farming exploded onto the scene in mid-2020 when the Compound Finance protocol launched its governance token, turning into the primary platform to take action.
Cuban has been bullish ever since and kicked off his appraisal of DeFi with:
“The precept behind why they’re good additionally applies to different crypto initiatives, however lets put that apart … That is how I see the market and there could also be issues that I’m fallacious about or might change by the point you learn this.”
Crypto Companies make extra sense than you suppose and valuing tokens is simpler and makes extra sense than you suppose . They’re simply companies like another , with a couple of HUGE benefits. My weblog submit on the matter https://t.co/uICS2H9JGs
— Mark Cuban (@mcuban) June 14, 2021
Naturally, Cuban highlighted the Layer 2 aggregator Polygon first as he’s closely invested in it. His evaluation approached the protocol from a enterprise angle explaining what it does and why it’s price investing in.
He in contrast it to Amazon’s cloud providers that are extremely centralized and designed to extend earnings for the corporate and its shareholders.
“However blockchain based mostly companies diverge shortly from conventional software program and the distinction is the place the brilliance of crypto based mostly companies like Polygon/Matic and their rivals, from BTC to ETH and even to Doge coin are available in.”
Cuban added that if DeFi protocols took a centralized enterprise path the place they managed and owned all the pieces, they’d have needed to elevate not simply hundreds of thousands however probably way more.
“As a substitute, they create a close to zero value token that they distribute in accordance with the tokenomics they outlined to their neighborhood.”
The entrepreneur then goes on to clarify decentralized exchanges, automated market makers, and the way liquidity provision works. Cuban concluded that DeFi rocks as a result of it doesn’t concentrate on earnings for the corporate:
“However their mission is to not maximize earnings as a result of in virtually each crypto based mostly group, they’re decentralized. Each token is created equal. Regardless of who owns it.”
Cuban’s 2021 in Crypto
Mark Cuban has made the headlines various instances to date this yr. In February he mentioned that the HODL ethos of Bitcoin merchants helped him help the Reddit group that took a stand in opposition to the Wall Road whales.
In Could, Cuban went bullish for Ethereum, giving his the explanation why it might finally ‘dwarf Bitcoin’.