I used to spend a lot of time reading Bitcointalk forum posts predicting how Bitcoin would function in a futuristic/scifi economy. There were many posts about how fiat currencies might evolve in relation, and later how smart contracts could be integrated to enable a more composable, permissionless, and efficient financial system with a non-sovereign SoV at its core. For the most part, those visions of a decentralized financial system have yet to materialize. Bitcoin has been the notable exception by popularizing the concept of a non-sovereign digital asset. We have been investing in the 3rd and 4th generations of DeFi protocols, like @ORE and @solomon_labs. These teams have learned from watching previous attempts, many of which failed to find meaningful adoption or gradually evolved into centralized versions of the systems they originally aimed to replace. I believe centralized stablecoins and tokenized RWAs are in the process of indirectly laying the foundation for a truly decentralized financial system to flourish. Blockchain rails will be adopted, and the DeFi ecosystem hiding within the trojan horse will end up replacing large components of the legacy system.

Years ago, the idea that a product built on an L1 blockchain could generate more revenue than the L1 itself seemed crazy. Then it happened. To many, the idea that a product built on an L1 could achieve a larger market cap than the L1 itself seems crazy. This will happen too.