“DeFi is not a story about today – it's a story about the future,” Haseeb Qureshi (hosseeb) said at Consensus2022. Story via danielgekuhn
AUSTIN, Texas — There are “five unsolved problems of cryptocurrency,” according to Haseeb Qureshi, a managing partner at Dragonfly Capital. That is: identity, scalability, privacy, interoperability and user experience, or UX.
Almost all crypto projects that are successful in the long term solved one of these perennial problems, Qureshi said. His definition of “success” here is untethered from financial wins, and instead means a blockchain project that is finding real use. “The question of whether these things have utility is very different from the question of their financial success,” Qureshi said in an interview. CoinDesk caught up with him after the “What’s next for DeFi and Web 3” fireside chat. “Innovation happens when tackling new and important problems,” he said.
But the current bear market is structurally different from any other that the digital asset industry has endured. Climbing interest rates pull capital out from the farthest end of the risk curve, and it’s still unknown how that will ultimately affect digital assets. There are fewer people speculating, and there's less demand for the risky leverage, yield or upside crypto provides.
On stage, Kariya made a similar point: DeFi is down, equities are down, global markets are down. “[This is] not particular to crypto. Leverage unwind [is occurring simultaneously] in a bunch of different buckets,” he said.This may “all be happening at once,” but it’s responding to a “single lever” of rising interest rates as the Federal Reserve increases the costs of borrowing capital to quell inflation.