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Comment by TekMol | Hacker News Reader

Is all that is going on in DeFi just self-referential?

I mean, there is money moved around all the time, there are more and more clever and complex systems.

But are they connected to the real world in some way?

For example, the stock market is. It lets people with savings invest those savings in companies that produce real world goods and services.

Another example is a bank. A bank can loan money to people who want to spend now what they will earn later.

But DeFi? Is anything happening there that has value to mankind? Or is it all a zero-sum game between crypto traders?

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> It lets people with savings invest those savings in companies that produce real world goods and services.

You can invest in cryptos that you think will perform some sort of electronic service, like Ether, in expectation that the value will go up if it grows in usage.

It's admittedly pretty hard to make a connection to the physical world. So staying within the virtual world, ownership is an interesting application outside of finance. NFTs are the most prominent but (as art) least interesting examples of blockchain ownership. More interesting is the intersection with gaming, like what you see with Crypto Kitties and Gods Unchained (deck building game where card ownership and scarcity is blockchain driven). Another example is ENS: decentralized domain names.

> A bank can loan money to people who want to spend now what they will earn later.

This topic is much easier. Finance is the first application of blockchain, and there are tons of traditional financial instruments which exist in cryptospace already.

CDPs[1] offer a decentralized way to borrow money.

Compound[2] offers a way to both lend and borrow.

[1] https://coinmarketcap.com/alexandria/glossary/collateralized...

[2] https://compound.finance/

Many invest in private companies through DAOs and crypyo token. So I don't get your stock market difference.

This is the first time I hear about something like this.

Can you give an example?

All governance tokens are essentially common stock with voting rights. $GRT for The Graph, for example.

All DAOs are essentially corporations. But not all are legally registered corporations. "LAO" (Legal Autonomous Organization" is the moniker for legally registered DAOs.

There's a few thousand Ethereum based LAOs listed on this site: https://aragon.org/aragon-govern

https://aragon.org/aragon-govern seems to be a landing page. There is no list of thousands of LAOs. Is it hidden behind some link perhaps?

Also you explicitly say LAO instead of DAO. Under which country's jurisdiction does the LAO fall?

Not OP, but Telegram has its own token and there are also tokenized stocks on FTX. I actually use the latter one, since my income isn’t large enough to take a margin loan at e.g. InteractiveBrokers (they require 75k€ annual income) to participate in moves of Tesla.

Please don’t tell me about European derivatives like KnockOuts and Warrants. These are more expensive than a margin loan on FTX.

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