New York-based financial journalist Camila Russo (founder of The Defiant), sat down with Beijing-based researcher Diane Dai (founder of CypherJump, DeFi Lab) at DeFi.wtf Osaka for an insightful fireside chat.
Grounded in stats and first hand interviews, the two DeFi ladies probed into “East vs. West: Myths or Reality”, in terms of DeFi users, projects and investment landscape. Beyond the facts and figures, the discussion on context such as Asian user mentality as well as the CeFi ecosystem, sheds light into what types of DeFi projects may have the potential in capturing the vast Asian market.
Direct link to slides here. WTFdao has edited the abridged transcript below.
Camila Russo: Hi everyone, so happy to be here in Japan. I can hardly believe it. I’m glad to be here as my second Devcon as well. And, well, I guess we should introduce ourselves. First I’m Camila Russo, I’m a journalist used to be a Bloomberg I’m writing a book on the Ethereum and have a daily newsletter focusing on the DeFi, the DeFiant .
Diane Dai: Hello, I’m glad to be here to share some facts and insights from Eastern sphere. I am Diane Dai, people call me Dai Dai, just like the double stable coin. I used to be the CMO of DDEX, the decentralized exchange, and I left it two months ago to start up my own third-party marketing company to help blockchain projects come to China and do growth hacking in Asian community.`
Camila Russo:
Now that we’re here in Japan, we want to talk about how DeFi is in the East compared with DeFi in the West, it seems like there’s like a divide between East and West where each side doesn’t really know much about the other so we wanted to help fix that. And we’re starting with a common perceptions, each side doesn’t know of each other.
Okay, for the West, it seems like, looking at the main projects listed on Defi Pulse, which seems to be like the market reference. It seems like most every project is based in the West, but there’s maybe this perception that there’s this whole other world in the east, that we don’t really know what’s going on but there must be some really interesting stuff happening there. With users, there’s also this perception that most users are probably in the West, but Asian based users are fine with more centralized products and exchanges like Binance and more like risk-prone speculative kind of users, which is like the common perception. And on the investor side, there’s this perception that Eastern investors aren’t really focusing on DeFi.
Diane Dai:
I have done some interviews with Asian projects and investors. Users will always question: how can I make money from this DeFi project. “If DeFi project cannot make money for me, it should not exist.” And so Asia projects will focus more on market adoption and get more users. They talk less about “am I fully decentralized”, it doesn’t matter so much (for them).
When it comes to the Asian institutional investors, a friend who funded Ethereum in early stage told me: we don’t really seriously take DeFi as a vertical, just think about bigger thing like open finance and digital assets.
Camila Russo:
Okay, so we’ll try to clear up some of these perceptions and see which are true and which are false.
Here we took DeFi Pulse as the reference and looked at the 20 projects listed there. They rank projects based on value locked in the protocol. (Unfortunately the East projects color isn’t showing up there.) The overwhelming majority of projects in DeFi Pulse are based in the West, either with headquarters in the West or most of the teams are based in the West, with 500 million locked in these projects. And well just 10% of the value is locked in Eastern-based projects. Instadapp, Nuo Network and Kyber are the only Eastern based projects of the 20 listed in DeFi Pulse.
Of the western-base project. The overwhelming majority of value is focused on lending protocols, obviously most of it in MakerDAO.
It seems like in the West has been kind of this demon-ization of tokens in projects but that’s not going on in the East.
Most DeFi projects in the East have issued tokens. There is no token-less protocols here in Asian DeFi community, we’re allowed to take advantage of Token Economics.
Diane Dai:
We can hardly see any Asian projects listed on Western data website, but actually there are more and more Eastern DeFi projects. And one interesting fact is that most of Eastern DeFi projects have issued tokens, there is no token-less protocols here in Asian DeFi community, we’re allowed to take advantage of Token Economics.
Camila Russo:
It seems like in the West has been kind of this demon-ization of tokens in projects but that’s not going on in the East.
Okay, so then we look that the investor that are putting money into these top projects on DeFi Pulse. Again, they’re mostly concentrated in the West. The two most active funds are KR1 and Polychain Capital. KR1 is based in Europe and Polychain is based in California. And, of these top investors in DeFi, only two funds are based in the East.
Diane Dai:
Yes, and maybe we don’t hear about it so much, but there are some emerging DeFi investors in the East, and I like to mention that CMB International, which is owned by China Merchant Bank, government fund is also involved in DeFi investment.
Camila Russo:
Okay. And finally we take a look at the users of DeFi and here is where we can get a really interesting conclusion. So what we did is we looked at the Top 10 projects on DeFi Pulse and saw the traffic from the that they were getting in their website from SimilarWeb. The caveat here is many users will use VPN, but this will give you a broad overview of where the users are coming from.
And, yes, they’re still, you know, the biggest percentage of users are coming from the west, but there’s a significant amount of users coming from the east, even as most of the projects are based in the West and most of the investment is based in the West, there is a significant number of Eastern based users. So it seems like there is a huge opportunity, there is interest in decentralized finance from Asia, that founders and funds can take advantage of.
Diane Dai:
Maybe there are more than 55% in the East, because most of Chinese users use VPN sometimes. Rune Christensen from MakerDAO came to Beijing last month, he told us the largest market for MakerDAO CDP is here in China. I anticipate that DeFi market will eventually scale up in Asia, especially in China we are all waiting for a killer DApp, which may not be that decentralized, but for everyone to make real money with it, which is the first motivation for users.
Please contact@tzhen on Twitter for corrections.
DeFi.WTF Osaka was the first of a series of WTF events, traces the emergent DeFi stack and explores its implications through in-depth conversations with the space’s main actors.
About WTF — the Power of Asking: a modern resurrection of the Greek Pnyx, to build a supportive space for open, inclusive, informed, and thoughtful exchanges of ideas, for the practice of the ancient art of asking the right questions to move beyond hype and arrive at knowledge.
Stay in Touch:
- Website: www.DeFi.wtf
- Twitter: WTFdao
- Telegram: https://t.me/defiwtf
- Donation (ENS): defiwtf.eth
- Support us via “A DeFi Billboard” Social Experiment
