{̵͉̦̜͊ ̴̖̜̯̅Δ̵̭͙͚͘̕👺 ̶̮͍̃ ̶̟̩̠̒͗}̵̡̝͋͆͝

nice overview of where the yield is coming from via analysis of one of defi's largest in exploring the future of onchain yield, I like the first principles approach - what is the essence of "yield" - so we don't get stuck just assuming what will be = more of what is how do we do this? I come from bitcoin, so Austrian theory is the base, from which we can parse 2 sources of "wealth creation" 1. Roundaboutness (Böhm-Bawerk) - provide capital to build out a known value-producing process (eg we know people want cars and how to build them; fund a factory expanding it's production capability and you're participating in wealth creation) 2. Entrepreneurial profit (Mises) - successfully addressing misallocations of capital by acting on subjective judgment where no calculable probability exists aka bearing uncertainty to make something new and valuable (eg no one knows the how and how much of ecommerce in 1994, Jeff and his backers took that problem on) From these sources of new wealth, we can frame "yield" as compensation for services you provide to the structures of production and the exchange of valuable goods and capital. 1. Time value - even in a world of perfect certainty, people want things now more than later and are willing to pay for this 2. Roundaboutness Productivity - looks most like yield on a commercial loan, your portion of the surplus generated by enabling production expansion by providing up front capital 3. Entrepreneurial Productivity - looks like VC investment, your portion of the surplus generated by bearing a share of uncertainty by funding entrepreneurs in their exploration of closing allocation mismatches/creating new goods and services 4. Risk Bearing - absorbing *calculable* variance for others ie Insurance 5. Liquidity Provision - facilitating immediacy/optionality by standing ready to transact when others want to; Market Making 6. Rent - payment for access granting to scarce factors We can then use these to see how they underpin a few different TradFi Products/yield sources: Bond Yield = 1 + 4 Equity Returns = 2 + 3 Options Premiums = 4 + 5 So where do blockchains/defi add Real World Value that might indicate future sources of onchain yield? Perhaps 2 + 3 - "Internet Capital Markets" of the VC investment and Private Credit kind; the trick of this is that the limit of wealth creation in Roundaboutness and Entrepreneurial Productivity is fundamentally one of information about what is actually productive and who has good entrepreneurial judgement. There are some structural bottlenecks - part of why Brazilian grain producers pay 20% on working capital loans is terrible infrastructure for accessing funding But that's a trust and politics question as much as it is a payment/repayment rails one Most early stage ventures fail as a nature of the game; there is some differential between good founders + idea and inability to get VCs to take their call whether that's a meaningful margin or not is *uncertain* Risk Bearing - perhaps Smart Contract functionality and blockchain data availability can meaningfully reduce cost/improve quality of underwriting but that is the key, the payout mechanisms aren't the hard problem here though that's the most obvious solution blockchain provides atm Liquidity Provision - AMMs, perps, flash loans are innovative. Maybe Pendle Yield splitting/Boros approach to IRS are as well; is there any more math to apply here to create genuine innovation? Rent - ETH as the new Visa, Solana as the new Nasdaq, whether this value add can justify a network token price or not is still up for debate but building more open globally accessible settlement infrastructure remains a core, somewhat tangible value add from blockchains the two things I'm watching as catalysts for a next wave of experimentation in onchain yield 1. Tradfi on chain - both capital and operational infrastructure; what happens when TF money + demand for permissionless, fixed rate, undersecured lending enables billions in net new global loan origination (likely a few million in honest entrepreneurs worldwide who are able to create wealth if they could secure a few thousand dollars in capital at sub 10% rates) 2. Some sort of US safe harbor rules or other legal infrastructure that enable token utility and equity property experimentation that's currently no-go'd by Foundation lawyers; maybe buyback and burn isn't so dumb if that's deemed an allowable mechanism for value accrual without being treated as a must-register equity

Deep down inside everyone wants equity-like returns, but with fixed income like risk, and the liquidity and safety of a bank deposit.

So @usualmoney team has been claiming for a few weeks that USD0++ was redeemable for 1:1 USD0 so everything was chill. Today, they stopped the 1:1 redeem function without any prior announcement to trap farmers and keep their TVL. USD0++ is now trading at $0.92. Please send this french ponzi to zero without mercy.