DeFi: The New Standard for Finance?

Published on
January 11th, 2021
58 minutes

DeFi: The New Standard for Finance?

The Interview - Crypto ·
Featuring Santiago Roel Santos and Sebastian Moonjava

Published on: January 11th, 2021 • Duration: 58 minutes

Santiago Roel Santos, partner at Parafi Capital, joins Sebastian Moonjava, Real Vision associate crypto editor, to discuss the growth in decentralized finance (DeFi), Parafi Capital's approach to investing in crypto, and network effects created by developer mindshare and composability. Santos explains that Parafi Capital invests in assets based on "where they are today" and not necessarily where they hope to be in the future, pointing to how some metrics such as the number of users and a project's fee generation structure demonstrate what already has traction. When judging the robustness of a developing project, Santos also considers the importance of strong network effects, stating that he believes team and community to be most salient while liquidity is transient. Confident that the DeFi sector possesses the potential to capture a significant portion of crypto's total market cap, he describes crypto investing as almost being a very liquid form of venture capital investing, making it significantly less risky than traditional VC investing. Filmed on January 6, 2021. Key Learnings: Network effects and moats can be very powerful in crypto—identifying whether a project has a strong team or a loyal community can make all of the difference in the outcome of an open source project. If a project has high liquidity— but no community—this might be of concern since liquidity is a transient network effect. Understanding how large of a user base a project has or how many fees have been generated, as opposed to making decisions based on future expectations, can help remove some of the guesswork in investments. Crypto also enables "liquid venture," which allows investors to manage risk better, compared to traditional venture investing, as crypto assets tend to be liquid as they are being built.



  • RG
    Rodrigo G.
    16 January 2021 @ 22:50
    Great interview, Sebastian. Its always a pleasure to listen/read Santiago! Loved it
  • md
    mike d.
    11 January 2021 @ 23:14
    a general question to anyone, why is crypto currency, in particular bitcoin presented as a gold coin, or a gold dollar sign or written in gold ? it seems dishonest. I dont really understand crypto, but I do understand gold and crypto is not gold.
    • BS
      Bradley S.
      15 January 2021 @ 03:32
      that's a design and marketing department question but every time i see it i think of the grayscale commercial where there pushing shopping carts full of gold bars and there marketing bitcoin as the anti gold personal i find it funny as for gold and bitcoin i think they work together nicely so I own some both
    • JD
      John D.
      15 January 2021 @ 14:29
      totally, bitcoiners hate it as well. Media for some reason use still the same old image. Bitcoin is most definitely not gold. We need better one e.g. this one is more poignant
  • Hv
    Hannah v.
    12 January 2021 @ 22:58
    I had to take notes on this one. Great job 🤓 with a well-rounded, systematic description of DeFi, layers and ecosystems.. now I have to google it up to get it 🥵 🧐😏
  • JT
    John T.
    12 January 2021 @ 01:27
    I'm into trading bitcoin and etherium with a fixed exposure approach (sell the rises and buy the dips to keep roughly the same $ invested). The stories behind the space are amazing, but the two big concerns I have are the following: 1. The idea of bitcoin whales deciding to switch from accumulation to distribution (a few accounts control north of 90%) 2. The tether-printing people have been tweeting about, with the idea that tether is somehow creating huge $ of tokens w/o backing and buying things like bitcoin with them. I'm comfortable with the amount I have invested (and I bought the recent dip per my strategy), but I figured you might have easy answers to those two concerns.
  • PJ
    Patrick J.
    11 January 2021 @ 08:33
    Content is good, but this did not age well.
    • WL
      Will L.
      11 January 2021 @ 10:49
      What didn't age well?
    • SF
      Stripy F.
      11 January 2021 @ 22:46
      Give it time to age. It's early days my friend
    • LS
      Lewis S.
      11 January 2021 @ 23:10
      What do you mean? Just in time to BTFDMF!