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If you’ve been following DeFi on Twitter, you’ve probably heard of the name “DegenSpartan”.
The pseudonymous investor, believed to be based in Asia, has become one of the most popular voices within the Ethereum and DeFi community, having entered this crypto industry very early on.
The fact is, no one knows where he comes from, who he is and what he thinks will come next. Some of these mysteries were answered recently when “Hasu,” another pseudonymous analyst and investor, brought DegenSpartan to his podcast, which he sometimes hosts with Three Arrows Capital’s Su Zhu.
Here are some key points from the DegenSpartan podcast.
I sat with @DegenSpartan, one of the largest and most enigmatic Defi investors there is. We discussed his path to success, how he chooses projects in Defi, why he doesn’t like Maker and Yearn, and more. Http://t.co/toJNTlHYWw
– Hasu (@hasufl) November 13, 2020
Humble origins
Degen explained that he came from humble beginnings, starting to invest his personal funds in fixed income assets and dividends. He says he has a background in finance, although he hasn’t elaborated on this point.
Looking for a way to earn safe returns on his capital, he stumbled upon an arbitrage between cryptocurrency markets, where you can buy and sell coins on different exchanges and profit from the difference.
Eventually, this developed into an interest in more complex financial applications, and this is where DeFi comes into play.
Doesn’t believe in Yearn.finance (YFI)
DegenSpartan is one of the few DeFi investors not to be infatuated with Yearn.finance, the full-stack DeFi protocol and yield aggregator.
He made this clear on his Twitter feed, although he explained his thoughts further in the podcast.
There are many reasons why DegenSpartan is skeptical of Yearn.finance.
First, he’s not sure why its founder, Andre Cronje, is putting so many products under the Yearn.finance banner.
He added that the math doesn’t add up, referring to how YFI holders are somehow entitled to the fees the protocol generates through its products.
DegenSpartan admitted that he cultivated YFI due to the extremely high yields on offer, although he cautioned him with the claim that he sold the coins early, long before the rally to $ 44,000 took place.
MakerDAO too
He went on to mention that he is not entirely confident in MakerDAO, the decentralized loan provider, largely due to the fact that he cannot impose negative interest rates on the owners of the DAI token.
Instead, MakerDAO taxes MKR holders, basically, to account for deficiencies in the ecosystem.
DegenSpartan, along with podcast host Hasu, was instrumental in preventing MakerDAO’s governors / token holders from positively influencing the protocol economy.
DeFi May See Further Losses: “You Didn’t Invest in a Perpetual Money Machine”
While it’s unclear when exactly this was recorded, DegenSpartan apparently suggested that the DeFi space needs to decline further in the weeks and months to come.
His comment was that not all investors have realized that they have not invested in a perpetual money machine, referring to how for every percentage of return earned, there is a loser on the other side of that transaction.
The incentives of many DeFi protocols are skewed, he added, discussing how investors think agricultural businesses are often barely incentivized to hold them for longer periods of time.
DeFi’s watershed moment will be decentralized second tier exchanges
Finally, he discussed what, in his opinion, will truly take DeFi to a new level: decentralized exchanges, i.e. derivatives exchanges built on level two scale technologies.
While DeFi is fast becoming the place to borrow and earn returns in the cryptocurrency space, there are still no exchanges in DeFi that match the experience of using a platform like FTX or BitMEX.
DegenSpartan thinks that when such exchanges are launched, Ethereum DeFi will be taken to the next level.
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