DeCap is DeFi's killer app.

“Software is eating the world.” Marc Andreesen, venture capitalist

DeFi. Imagine a blockchain-based alternative financial system that offers the same products and services as traditional finance, but with more variety, faster, more secure, lower cost, and simpler access.

Decentralised finance (DeFi) is a marketplace without gatekeepers or central authority managing the flow of money, where customers engage directly with smart contracts running on a blockchain.

DeFi grew exponentially in 2020/21, with Total Value Locked (an inadequate estimate for market size) topping at $100 billion. After that, it crashed.

The accumulation of funds by individuals with high discretionary income during the epidemic, the novelty of crypto trading, and the high yields given (5% APY for stablecoins on established platforms to 100%+ for risky assets) are among the primary elements explaining this exponential increase.

No longer your older brothers DeFi

Since transactions are anonymous, borrowers had to overcollateralize DeFi 1.0. To borrow $100 in stablecoins, you must deposit $150 in ETH. DeFi 1.0's business strategy raises two problems.

• Why does DeFi offer interest rates that are higher than those of the conventional financial system?;

• Why would somebody put down more cash than they intended to borrow?

Maxed out on their own resources, investors took loans to acquire more crypto; the demand for those loans raised DeFi yields, which kept crypto prices increasing; as crypto prices rose, investors made a return on their positions, allowing them to deposit more money and borrow more crypto.

This is a bull market game. DeFi 1.0's overcollateralization speculation is dead. Cryptocrash sank it.

The “speculation by overcollateralisation” world of DeFi 1.0 is dead

At a JP Morgan digital assets conference, institutional investors were more interested in DeFi than crypto or fintech. To me, that shows DeFi 2.0's institutional future.

DeFi 2.0 protocols must handle KYC/AML, tax compliance, market abuse, and cybersecurity problems to be institutional-ready.

Stablecoins gaining market share under benign regulation and more CBDCs coming online in the next couple of years could help DeFi 2.0 separate from crypto volatility.

DeFi 2.0 will have a better footing to finally decouple from crypto volatility

Then we can transition from speculation through overcollateralization to DeFi's genuine comparative advantages: cheaper transaction costs, near-instant settlement, more efficient price discovery, faster time-to-market for financial innovation, and a superior audit trail.

Akin to Amazon for financial goods

Amazon decimated brick-and-mortar shops by offering millions of things online, warehouses by keeping just-in-time inventory, and back-offices by automating invoicing and payments. Software devoured retail. DeFi will eat banking with software.

DeFi is the Amazon for financial items that will replace fintech. Even the most advanced internet brokers offer only 100 currency pairings and limited bonds, equities, and ETFs.

Old banks settlement systems and inefficient, hard-to-upgrade outdated software harm them. For advanced gamers, it's like driving an F1 vehicle on dirt.

It is like driving a F1 car on a dirt road, for the most sophisticated players

Central bankers throughout the world know how expensive and difficult it is to handle cross-border payments using the US dollar as the reserve currency, which is vulnerable to the economic cycle and geopolitical tensions.

Decentralization is the only method to deliver 24h global financial markets. DeFi 2.0 lets you buy and sell startup shares like Google or Tesla. VC funds will trade like mutual funds. Or create a bundle coverage for your car, house, and NFTs. Defi 2.0 consumes banking and creates Global Wall Street.

Defi 2.0 is how software eats banking and delivers the global Wall Street

Decentralized Capitalism is Emerging

90% of markets are digital. 10% is hardest to digitalize. That's money creation, ID, and asset tokenization.

90% of financial markets are already digital. The only problem is that the 10% left is the hardest to digitalize

Debt helped Athens construct a powerful navy that secured trade routes. Bonds financed the Renaissance's wars and supply chains. Equity fueled industrial growth. FX drove globalization's payments system. DeFi's plans:

If the 20th century was a conflict between governments and markets over economic drivers, the 21st century will be between centralized and decentralized corporate structures.

Offices vs. telecommuting. China vs. onshoring/friendshoring. Oil & gas vs. diverse energy matrix. National vs. multilateral policymaking. DAOs vs. corporations Fiat vs. crypto. TradFi vs.

An age where the network effects of the sharing economy will overtake the gains of scale of the monopolistic competition economy

This is the dawn of Decentralized Capitalism (or DeCap), an age where the network effects of the sharing economy will reach a tipping point and surpass the scale gains of the monopolistic competition economy, further eliminating inefficiencies and creating a more robust economy through better data and automation. DeFi 2.0 enables this.

DeFi needs to pay the piper now.

DeCap won't be Web3.0's Shangri-La, though. That's too much for an ailing Atlas. When push comes to shove, DeFi folks want to survive and fight another day for the revolution. If feasible, make a tidy profit.

Decentralization wasn't meant to circumvent regulation. It circumvents censorship. On-ramp, off-ramp measures (control DeFi's entry and exit points, not what happens in between) sound like a good compromise for DeFi 2.0.

The sooner authorities realize that DeFi regulation is made ex-ante by writing code and constructing smart contracts with rules, the faster DeFi 2.0 will become the more efficient and safe financial marketplace.

More crucially, we must boost system liquidity. DeFi's financial stability risks are downplayed. DeFi must improve its liquidity management if it's to become mainstream, just as banks rely on capital constraints.

This reveals the complex and, frankly, inadequate governance arrangements for DeFi protocols. They redistribute control from tokenholders to developers, which is bad governance regardless of the economic model.

But crypto can only ride the existing banking system for so long before forming its own economy. DeFi will upgrade web2.0's financial rails till then.

Managers spend much time in 1:1s. Most team members meet with supervisors regularly. 1:1s can help create relationships and tackle tough topics. Few appreciate the 1:1 format's potential. Most of the time, that potential is spent on small talk, surface-level updates, and ranting (Ugh, the marketing team isn’t stepping up the way I want them to).

What if you used that time to have deeper conversations and important insights? What if change was easy?

This post introduces a new 1:1 format to help you dive deeper, faster, and develop genuine relationships without losing impact.

A 1:1 is a chat, you would assume. Why use structure to talk to a coworker? Go! I know how to talk to people. I can write. I've always written. Also, This article was edited by Zoe.

Before you discard something, ask yourself if there's a good reason not to try anything new. Is the 1:1 only a talk, or do you want extra benefits? Try the steps below to discover more.

I. Reflection (5 minutes)

Context-free, broad comments waste time and are useless. Instead, give team members 5 minutes to write these 3 prompts.

1. What's effective?

2. What is decent but could be improved?

3. What is broken or missing?

Why these? They encourage people to be honest about all their experiences. Answering these questions helps people realize something isn't working. These prompts let people consider what's working.

Why take notes? Because you get more in less time. Will you feel awkward sitting quietly while your coworker writes? Probably. Persevere. Multi-task. Take a break from your afternoon meeting marathon. Any awkwardness will pay off.

What happens? After a few minutes of light conversation, create a template like the one given here and have team members fill in their replies. You can pre-share the template (with the caveat that this isn’t meant to take much prep time). Do this with your coworker: Answer the prompts. Everyone can benefit from pondering and obtaining guidance.

This step's output.

Part II: Talk (10-20 minutes)

Most individuals can explain what they see but not what's behind an answer. You don't like a meeting. Why not? Marketing partnership is difficult. What makes working with them difficult? I don't recommend slandering coworkers. Consider how your meetings, decisions, and priorities make work harder. The excellent stuff too. You want to know what's humming so you can reproduce the magic.

First, recognize some facts.

• Real power dynamics exist. To encourage individuals to be honest, you must provide a safe environment and extend clear invites. Even then, it may take a few 1:1s for someone to feel secure enough to go there in person. It is part of your responsibility to admit that it is normal.

• Curiosity and self-disclosure are crucial. Most leaders have received training to present themselves as the authorities. However, you will both benefit more from the dialogue if you can be open and honest about your personal experience, ask questions out of real curiosity, and acknowledge the pertinent sacrifices you're making as a leader.

• Honesty without bias is difficult and important. Due to concern for the feelings of others, people frequently hold back. Or if they do point anything out, they do so in a critical manner. The key is to be open and unapologetic about what you observe while not presuming that your viewpoint is correct and that of the other person is incorrect.

Let's go into some prompts (based on genuine conversations):

• “What do you notice across your answers?”

• “What about the way you/we/they do X, Y, or Z is working well?”

• “ Will you say more about item X in ‘What’s not working?’”

• “I’m surprised there isn’t anything about Z. Why is that?”

• “All of us tend to play some role in maintaining certain patterns. How might you/we be playing a role in this pattern persisting?”

• “How might the way we meet, make decisions, or collaborate play a role in what’s currently happening?”

Consider the preceding example. What about the Monday meeting isn't working? Why? or What about the way we work with marketing makes collaboration harder? Remember to share your honest observations!

Third section: observe patterns (10-15 minutes)

Leaders desire to empower their people but don't know how. We also have many preconceptions about what empowerment means to us and how it works. The next phase in this 1:1 format will assist you and your team member comprehend team power and empowerment. This understanding can help you support and shift your team member's behavior, especially where you disagree.

How to? After discussing the stated responses, ask each team member what they can control, influence, and not control. Mark their replies. You can do the same, adding colors where you disagree.

This step's output.

Next, consider the color constellation. Discuss these questions:

• Is one color much more prevalent than the other? Why, if so?

• Are the colors for the "what's working," "what's fine," and "what's not working" categories clearly distinct? Why, if so?

• Do you have any disagreements? If yes, specifically where does your viewpoint differ? What activities do you object to? (Remember, there is no right or wrong in this. Give explicit details and ask questions with curiosity.)

Example: Based on the colors, you can ask, Is the marketing meeting's quality beyond your control? Were our marketing partners consulted? Are there any parts of team decisions we can control? We can't control people, but have we explored another decision-making method? How can we collaborate and generate governance-related information to reduce work, even if the requirement for prep can't be eliminated?

Consider the top one or two topics for this conversation. No 1:1 can cover everything, and that's OK. Focus on the present.

Part IV: Determine the next step (5 minutes)

Last, examine what this conversation means for you and your team member. It's easy to think we know the next moves when we don't.

Like what? You and your teammate answer these questions.

1. What does this signify moving ahead for me? What can I do to change this? Make requests, for instance, and see how people respond before thinking they won't be responsive.

2. What demands do I have on other people or my partners? What should I do first? E.g. Make a suggestion to marketing that we hold a monthly retrospective so we can address problems and exchange input more frequently. Include it on the meeting's agenda for next Monday.

Close the 1:1 by sharing what you noticed about the chat. Observations? Learn anything?

Yourself, you, and the 1:1

As a leader, you either reinforce or disrupt habits. Try this template if you desire greater ownership, empowerment, or creativity. Consider how you affect surrounding dynamics. How can you expect others to try something new in high-stakes scenarios, like meetings with cross-functional partners or senior stakeholders, if you won't? How can you expect deep thought and relationship if you don't encourage it in 1:1s? What pattern could this new format disrupt or reinforce?

Fight reluctance. First attempts won't be ideal, and that's OK. You'll only learn by trying.

Internet's fantastic, right?

We've never had a better way to share our creativity.

I can now draw on my iPad and tweet or Instagram it to thousands. I may get some likes.

With such a great, free tool, you're not alone.

Millions more bright-eyed artists are sharing their work online.

The issue is getting innovative work noticed, not sharing it.

In a world where creators want attention, attention is valuable.

We build for attention.

Attention helps us establish a following, make money, get notoriety, and make a difference.

Most of us require attention to stay sane while creating wonderful things.

I know how hard it is to work hard and receive little views.

How do we receive more attention, more often, in a sea of talent?

Advertising and celebrity endorsements are options. These may work temporarily.

To attract true, organic, and long-term attention, you must create in high quality, high volume, and consistency.

Adapting Steve Martin's Be so amazing, they can't ignore you (with a mention to Dan Norris in his great book Create or Hate for the reminder)

Create a lot.

Eventually, your effort will gain traction.

Traction shows your work's influence.

Traction is when your product sells more. Traction is exponential user growth. Your work is shared more.

No matter how good your work is, it will always have minimal impact on the world.

Your work can eventually dent or puncture. Daily, people work to dent.

To achieve this tipping point, you must consistently produce exceptional work.

Expect traction after hundreds of outputs.

Dilbert creator Scott Adams says repetition persuades. If you don't stop, you can persuade practically anyone with anything.

Volume lends believability. So make more.

I worked as an illustrator for at least a year and a half without any recognition. After 150 illustrations on iStockphoto, my work started selling.

With 350 illustrations on iStock, I started getting decent client commissions.

Producing often will improve your craft and draw attention.

It's the only way to succeed. More creation means better results and greater attention.

Austin Kleon says you can improve your skill in relative anonymity before you become famous. Before obtaining traction, generate a lot and become excellent.

Most artists, even excellent ones, don't create consistently enough to get traction.

It may hurt. For makers who don't love and flow with their work, it's extremely difficult.

Your work must bring you to life.

To generate so much that others can't ignore you, decide what you'll accomplish every day (or most days).

Commit and be patient.

Prepare for zero-traction.

Anticipating this will help you persevere and create.

My online guru Grant Cardone says: Anything worth doing is worth doing every day.

Do.

Traditional sales organizations used the concept of a sales “funnel” to describe the process through which potential customers move, ending up with sales at the end. Winners today have abandoned that way of thinking in favor of building flywheels — business models in which every element reinforces every other.

Ah, the marketing funnel…

Prospective clients go through a predictable set of experiences, students learn in business school marketing classes. It looks like this:

Understanding the funnel helps evaluate sales success indicators. Gail Goodwin, former CEO of small business direct mail provider Constant Contact, said managing the pipeline was key to escaping the sluggish SaaS ramp of death.

Like the funnel concept. To predict how well your business will do, measure how many potential clients are aware of it (awareness) and how many take the next step. If 1,000 people heard about your offering and 10% showed interest, you'd have 100 at that point. If 50% of these people made buyer-like noises, you'd know how many were, etc. It helped model buying trends.

TV, magazine, and radio advertising are pricey for B2C enterprises. Traditional B2B marketing involved armies of sales reps, which was expensive and a barrier to entry.

Cracks in the funnel model

Digital has exposed the funnel's limitations. Hubspot was born at a time when buyers and sellers had huge knowledge asymmetries, according to co-founder Brian Halligan. Those selling a product could use the buyer's lack of information to become a trusted partner.

As the world went digital, getting information and comparing offerings became faster, easier, and cheaper. Buyers didn't need a seller to move through a funnel. Interactions replaced transactions, and the relationship didn't end with a sale.

Instead, buyers and sellers interacted in a constant flow. In many modern models, the sale is midway through the process (particularly true with subscription and software-as-a-service models). Example:

You're creating a winding journey with many touch points, not a funnel (and lots of opportunities for customers to get lost).

From winding journey to flywheel

Beyond this revised view of an interactive customer journey, a company can create what Jim Collins famously called a flywheel. Imagine rolling a heavy disc on its axis. The first few times you roll it, you put in a lot of effort for a small response. The same effort yields faster turns as it gains speed. Over time, the flywheel gains momentum and turns without your help.

Modern digital organizations have created flywheel business models, in which any additional force multiplies throughout the business. The flywheel becomes a force multiplier, according to Collins.

Amazon is a famous flywheel example. Collins explained the concept to Amazon CEO Jeff Bezos at a corporate retreat in 2001. In The Everything Store, Brad Stone describes in his book The Everything Store how he immediately understood Amazon's levers.

The result (drawn on a napkin):

Low prices and a large selection of products attracted customers, while a focus on customer service kept them coming back, increasing traffic. Third-party sellers then increased selection. Low-cost structure supports low-price commitment. It's brilliant! Every wheel turn creates acceleration.

Where from here?

Flywheel over sales funnel! Consider these business terms.