Labs Spotlight: The Journey From Hackathon to Breakout DeFi Startup

The story of how one hackathon team innovated their way into the defi ecosystem by creating a product users want.

Some people argue that the pillars of the modern financial system are now breaking. Others say that they have been broken for quite some time. Regardless, most financial professionals agree that negative interest rates and inverted yield curves are, for lack of a better term, concerning.

Historically low-interest rates over the past 11 years have had severe consequences for consumers. According to the FDIC, the U.S average interest rate on savings accounts currently stands at 0.09% APY.

The modern financial and banking systems are often referred to as “walled gardens” or closed ecosystems controlled by centralized operators. Historically, the vision of cryptoassets and cryptonetworks has been breaking down walled gardens by creating open-source protocols and peer to peer networks. Bitcoin aims to break the walled garden of sovereign assets. Ethereum more broadly seeks to open the existing financial system by enabling anyone to borrow, lend, save, or exchange capital.

Today this has manifested with people building open protocols on Ethereum, including Compound, Fulcrum, Dharma, DyDx, and more. Compound and Fulcrum enable individuals to lend or borrow money from a pool of individuals. Currently, each protocol offers widely varying interest rates from 5–9% variable rates, yielding rates that are 10x in some cases what traditional institutions are able to provide.

While Ethereum has removed the walled gardens of the existing financial industry, these open protocols have created a wild west of finance.

This has led investors to chase interest rates, taking their dai and moving it back and forth between protocols. If you’re like many passive investors, you just put it in one (Compound or Fulcrum) and call it a day, noting that the extra time (and subsequent gas fees) isn’t worth the effort to rebalance your portfolio. Managing these defi interest rates and pooled portfolios could eventually become a full-time job for one individual. Thankfully, one team created a unique solution to this problem.

Enter Team Idle: Bridging the Gap Between Finance and Crypto

Bill Gates and Paul Allen. Bryce Maddock and Jaspar Weir (TaskUs). Ben and Jerry (yes the ice cream). Some of the best projects, and eventual companies are created by high school buddies that later came together to build something incredible.

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Disclaimer: The views expressed by the author above do not necessarily represent the views of Consensys AG. ConsenSys is a decentralized community with ConsenSys Media being a platform for members to freely express their diverse ideas and perspectives. To learn more about ConsenSys and Ethereum, please visit our website.