August 28, 2024: Naturalists Abhor a Platypus 🦆🦫
"What is DeFi?", "What is Decentralization?", and other topics to avoid in polite society
How do you Define a Platypus?
It’s a mammal, but it lays eggs? A mole with the beak of a duck?
Science thought it had solved classification the animal kingdom centuries ago, but the discovery of the wacky duck-billed platypus around the turn of the 20th century colored wildly outside the neat lines of Linneaus’s carefully constructed taxonomy.
“Of all the mammalia yet known it seems the most extraordinary in its conformation; exhibiting the perfect resemblance of the beak of a duck, engrafted on the head of the quadraped. So accurate is the similitude that, at first view, it naturally excites the idea of some deceptive preparation by artificial means”
To some, it was proof it was created by an intelligent creator… or perhaps a creator of temporarily impaired intelligence.
In the end, is there any real value in trying to enforce a platypus into prior rubriks? All that matters is it exists and it’s beautiful in its way, isn’t that good enough?
What is DeFi?
Attempts to classify DeFi in terms of existing frameworks used for TradFi often feel just as awkward. DeFi evolved from TradFi, so it shares a lot of the same lineage. But the rapidly innovating DeFi has morphed into its own beautiful creature.
It’s an unusual situation there the philosophical question of “why” is often easier than definitions of “what.” Anybody who’s had the misfortune of trying to make wire transfer at a bank deeply understands “why” DeFi is important.
Andre Cronje gave his answer:
Whenever people attempt to categorize DeFi and fit it into neat little boxes, it ends up creating controversy.
Should emissions count as an expense on the balance sheet?
Are birbs revenues?
All discussions comparing tokenomics and accounting should be banned from the Thanksgiving table for the sake of harmony. Better to keep to lighter topics like religion or politics!
Yesterday DeFi Voyager classified Curve as nearly profitable.
Which spiraled into a lengthy and at times memeworthy debate with Curve itself, which identifies as a profitable protocol.
These questions of “what” DeFi is always tend to spawn ever-lengthier definitions of criteria.
So too did the interprid Ser Voyager release a detailed essay this AM, itself a detailed and recommended read, breaking down the terminology.
It seems as if every time people try to define “what” DeFi is, it surfaces ever-deeper philosophical questions, and further waxing on the subject.
From Curve’s side, it sparked the riddle that so confounded Socrates… is veCRV $CRV?
Just give me a sip of that hemlock tea so we can call the whole thing off…
What is Decentralization?
“I shall not today attempt further to define decentralization, and perhaps I could never succeed in intelligibly doing so. But I know it when I see it.”
We’re striking right at the heart of all the tough questions today, aren’tw e.
So what is decentralization?
When we last were confronted with this ambiguity, we punted.
Instead of “defining” decentralization, we asked the community vote on what counted as decentralized. This experimental approach proved more fruitful results than theoretical approaches.
Fortunately, the folks at Llama Risk are made of heartier stuff, and wrote an outstanding assessment of Curve’s level of decentralization, based on the Danish Financial Supervisory Authority’s framework.
Decentralization often being more of a journey than a destination, Curve scored well, with recommendations to improve in the following areas:
Front-end: more user-facing portals and private external interfaces
Governance: automate the process of liquid lockers' vote replication through smart contract instead of multisig
Cross-governance: determine a cross-chain governance solution
But gauging and defining “decentralization” is another of those topics of conversation to avoid at family gatherings.
The post prompted yet another debate in the Curve socials, where the Llama Risk report was brought up in the context of other less rigorous reports on DeFi decentralization.
We present the debate here in its full.
So now, for the record, now there is an article on the subject, sourced from the very same tautological conversation that requested one. Feels almost like an existential paradox of sorts, but those appear to be the norm in DeFi today.