I’ll outline my thoughts as to what the IC needs going forward to create a strong DeFi ecosystem.
(1) We need cross-chain assets. We don’t have the time to wait for the Ethereum integration, the Foundation should call Axelar or Layer-Zero (cross-chain bridging protocols) to get assets like stable-coins and other tokens onto the chain ASAP.
(2) Liquid staking. The IC should not be afraid of this, if people want to dump ICP tokens they can do so on centralised exchanges. Liquid Staking ICP creates DeFi markets for borrowing and lending, margin trading, etc. It can also be used to incentivise assets from other ecosystems, e.g. for Bitcoin to move to the IC to earn a return (lend Bitcoin, borrow ICP, liquid stake ICP).
(3) Synchronous transactions. The IC needs a framework for synchronous transactions. Many DeFi primitives, e.g. flash-loans, multi-hop swaps or smart order routing are not possible or are likely to be implemented in a very insecure fashion without synchronous transactions. This is something we hope to deliver at InfinitySwap in the near-term.
(4) Funding strong teams. The IC should actively seek strong entrepreneurs who can build important protocols. Dfinity should select 5 or so strong teams, and give them the funding they need or introduce them to their investors. We are talking millions of dollars here, rather than small grants.
(5) Interoperability and the SNS: The IC has done well to finally ensure that we have a common token standard. Looking forward to unlocking some of the ICP for product launches. This will be most useful to projects if the funding disburses ICP rather than locked neurons.
(6) Project Listing. We need to have a list of friendly centralised exchanges who can trade the new ICRC-1 tokens and who are keyed into the network. Without this, we can’t get the liquidity/visibility from the broader web3 ecosystem.
(7) Recently, I have noticed an improvement in Dfinity’s marketing efforts. Keep it up, now let’s coordinate for some of the big launches with BTC and ETH integration. We still need to engage with the broader crypto community, and for the respect we deserve I think it would be best to engage at a technical level, unabashed and not dumbed down. To recapture some of the hype that came with Dfinity’s launch, users need to understand what makes the protocol stand out and what its advantages are as compared to Ethereum, Aptos, Polkadot etc, who have done a great job at explaining the evolution and advances of their architecture.