The Brilliance of Yield Farming, Liquidity Providing and Valuing Crypto Projects | blog maverick

Great post and perspective from Mark Cuban on DeFi projects.

Yes, every single DeFI project, is at its core, just another business. They may or may not know what business they are in, but they are just another business that happens to be using a blockchain and smart contracts to host and program their business processes.

Cuban is hitting directly on something I've been thinking about a lot. Folks that are cynical about crypto projects tend to suggest they represent no value. But would these folks think the same thing about shares in a private startup? Maybe, if they are being logical, they should. Owning and holding tokens of a DeFi project is similar to investing in an early stage company.

In the crypto/DeFi world, organizations don’t require near as much capital to start and operate. Rather than raising money in a traditional sense, they can sell tokens to raise capital , they can reward Liquidity Providers instead of having to raise liquidity for financial transactions, they can reward stakers who support Validators, they can operate on a blockchain where most of the CapEx/Infrastructure and much of the critical security is provided by Miners or Validators. They can build communities that replace layers and layers of bureaucracy. And what I’m about to say is what makes the crypto world so dramatically different and why it’s a model for future technology businesses and possibly all businesses.

This is a different way to capitalize and operate a company. Is it fundamentally better? Maybe. Is it better for some businesses? Yes. Will it make other models go away? No.