Roadmap Series: Part 2
For a glossary of the terminology used in this article, please refer to the glossary at the end.
What responsibility does a DeFi protocol have to educate its investor base? Although some may perceive this as a loaded question, there are plenty of clues in the broader DeFi ecosystem that it is a line of inquiry that deserves more attention.
DeFIRE has committed itself to expanding access to financial education through the creation of its DeFIRE Academy. Our efforts to ensure that our investors are among the savviest in DeFi will include collecting resources, creating our own content, collaborating with educators, and developing new curriculum with access to topic-specific, personal tutoring.
A Confederacy of Degens
The terms NFA (Not Financial Advice) and DYOR (Do Your Own Research) are ubiquitous in the DeFi Twittersphere, on YouTube, and across social media. The implicit recognition in these popular acronyms that none of these people are claiming to be authorities, upon pain of legal jeopardy, provides some proof that there is an education problem in DeFi. Everyone wants to help their fellow frog, (a supporter of DeFi), but nobody wants to get rekt by legal jeopardy.
Part of the DeFi space collectively maturing entails the expansion of the investor base beyond the current preponderance who don’t identify as an ape, a frog, or any of the other DeFi meme caricatures. The current environment includes both financially literate people, and people pretending to be financially literate.
However, perhaps more concerning, is that very little exists for the investor who does not have the time to keep a token screener site open on their laptop throughout the day. An open secret in DeFi is that passive income built through decentralised finance often becomes quite active in nature until you’ve already approached the precipice of financial independence. Even then, a fortune can be decimated in the blink of an eye. How then do we realistically integrate traditional investors into DeFi platforms and protocols?
We see this challenging paradigm as an opportunity that, if addressed head-on, could boost the entirety of DeFi.
In a Galaxy F.I.R.E. F.I.R.E. away…
Many people in DeFi probably have no idea that the principles of the F.I.R.E (Financial Independence Retire Early) movement are ideas that they are already putting into practice. The meme of the degen who buys an economy pack of ramen noodles for subsistence while pouring thousands of dollars into investment opportunities actually tracks pretty closely to the F.I.R.E. concept of saving and investing 50–75% of one’s income while practising frugal subsistence habits.
Still, the main difference is that a degen’s aggressive investment practices may lean toward being a hair’s breadth from having huge investments liquidated, rather than building a risk-adjusted portfolio.
A balanced approach to education in the DeFi space includes teaching those already here to build a healthy relationship to risk-taking. The DeFIRE ecosystem being built out will include all manner of risk-adjusted investments, and accordingly, we will begin the road to building out our Academy by focusing on developing educational materials about the features and strategies possible within our protocol.
By developing and tracking KPI’s concerning the success of our educational efforts within our own investment community, we will build a strong foundation for then expanding our curriculum to the new investors we hope to draw in from TradFi.
Our initial roadmap for building out the DeFire Academy focuses on specific, localised action items that will provide immediate benefits to the investors we have already attracted. Roadmap items include:
- Educational infographics for each protocol, detailing features, tokens, navigation, and investment strategies.
- Explanatory graphics for each token and its tokenomics
- A detailed flow chart breaking down revenue creation and how it funnels to the treasury, DAO, $DFIRE, and $gDFIRE holders, and protocol-owned liquidity pools.
- A breakdown of the ecosystem governance token $gDFIRE and the features and functions it plays in tying the protocols together.
- Informational videos breaking down each of the protocols in layman’s terms for new investors.
- Infographics detailing the tenants of the F.I.R.E. movement.
- A breakdown of the F.I.R.E. philosophy’s possible applications in the DeFIRE ecosystem.
- Additional content assets are provided on a rolling basis as the ecosystem expands.
While we realise that an educational project of this scope will take time to properly develop and execute, there is already a wealth of resources sitting in plain sight on many different platforms.
The problem is that these education solutions only go so far to address the needs of investors and then tend to lose momentum and attention. The best of these siloed resources need to be gathered, organised, and then aggregated in a single location that is intuitive and easily navigated.
While the implementation of this web tool may not be fully achievable on a short-term timeline, there are many resources that our Academy contributors will be able to gather into a database that can be of immediate use to our investors.
Content creators on YouTube and across social media have tried to monetise their efforts in the hopes of combining their passion for DeFi and the possibility of subsisting off of that income. These resources also extend to F.I.R.E. movement content and DeFi coding language instructional content, which are also areas of interest at DeFIRE Academy.
We hope that in the process of collecting and amplifying content creators’ educational resources that we can begin to build partnerships and discover a way forward that coordinates the efforts of these important figures in our ecosystem.
In developing this informational tranche within the DeFIRE Academy, we will be laying the groundwork for the longer-term goal of creating content and subject-specific educational curriculum that can be adapted and refined as DeFi evolves and matures.
As mentioned in the previous DeFIRE roadmap article, our DAO 2.0 organisational structure will come into play in charting the future course for the DeFire Academy. As we build a working group of educational contributors, we will regularly assess the areas of success and potential need within our community, especially as it relates to new investors to DeFi.
One of the current limitations of the existing educational material available online is that much of the terminology used assumes some understanding of how to navigate the ecosystem.
DeFIRE’s contributors will develop curricula that bridges these gaps through the process of auditing the available material that we offer in our Academy resource library and the content that we have already developed.
Rather than being redirected to a video or an article, the traditional investor will be able to get the TLDR (Too Long Didn’t Read) from a community member dedicated to on-boarding investors with no working knowledge of DeFi.
Tutoring and other tutorial curriculum can be written and referenced in voice chats and topic-specific Academy channels within our Discord server once an effective teaching strategy has been established across all of the most requested DeFi, F.I.R.E., and coding topics.
By the time we have closed this informational loop, we believe that DeFIRE will be well on its way to building out an ecosystem that offers investors of all backgrounds and knowledge levels the opportunity to build a portfolio of risk-adjusted assets that can be tailored to their investment needs.
By building out these educational tools and resources, DeFIRE will be helping to build stability and confidence into its community, and by extension, its protocols and currencies. Starting with the BLAZE protocol which we will discuss in further detail in the next article in this series, we will begin implementing the DeFIRE Academy objectives we’ve laid out.
Improving education throughout our community begins now, before we’ve even launched. If you are someone who has benefited and thrived in DeFi, please join us as a DeFIRE Academy contributor, and help us bring along traditional investors into the future of decentralised finance.
Glossary of Terms:
- “DeFi”: decentralised finance is a permissionless, tamper-proof, and code-based system of technology-driven investment.
- “rekt”: having suffered a large and sudden financial loss because of high volatility and/or high risk investment strategies.
- “frog”: a supporter of the development of DeFi protocols and blockchain ecosystems, its prominent figures, and other investors sharing similar views.
- “ape”: an investor prone to impulsive investment behaviour, especially taking high-risk investment positions based on the hope of very attractive financial gains.
- “passive income”: investment income that continues to compound on its own due to the interest bearing nature of the financial assets held.
- “F.I.R.E. Movement”: A financial independence movement that encourages extremely high levels of savings and investment coupled with practising low-cost lifestyle practices. This can accelerate the time frame to achieving the option of early retirement if implemented early in an investors career.
- “KPI”: Key Performance Indicators are analytical tools that help gauge the success or failure of a strategy in business, marketing, etc.
- “TradFi”: traditional finance is basically everything that operates in a centralised way, even crypto exchanges that operate within the old regulatory framework of securities oversight and regulation.
- “DAO”: Decentralised Autonomous Organisation
- “DAO 2.0”: a DAO that distributes its governance across a series of autonomous working groups, rather than utilising a traditional top-down hierarchy.
- “Liquidity Pool (LP)”: A liquidity pool is a collection of funds locked in a smart contract, used to facilitate decentralised trading, lending, and many more functions.
- “protocol”: an investment project that operates based on smart contracts and code rather than through the developer’s subjective decision making process.
- “Protocol Owned Liquidity Pool”: a combination of financial assets that are owned by and set aside for use by the DAO community. This can be either as part of the financial structure of the protocol, or as reserve for specific uses.