DeFi’s user base needs to be more decentralized, says former ConsenSys executive

In a webinar organized by Kraken entitled “DeFi-ing expectations” (a little pun on DeFi), invited panelists discussed the emergence of decentralized finance, its defining characteristics and how to measure its success.

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The webinar was held on July 31 and featured the participation of the most recognized influencers of the DeFi ecosystem such as Anthony Sassano, co-founder of, Ryan Sean Adams, founder of Mythos Capital, Andrew Keys, managing partner of Dharma Capital and former executive of ConsenSys, and William Mougayar, one of the first investors of Ethereum and former advisor to the Ethereum Foundation.

Pete Rizzo, general editor of Kraken, moderated the panel, often asking somewhat provocative questions about the nature of the DeFi movement.

Metrics and Decentralization

One of the questions was about the total blocked value metric, with Rizzo asking why is it important and what is its usefulness?

Sassano gave a brief introduction, noting that it was first popularized by the statistics website DefiPulse as a way to measure how much Ethereum is blocked in the protocols, with the implication that it would not be contributing to sales pressure.

“That’s a very primitive way of looking at it,” Sassano said, explaining that the metric has recently come under scrutiny because that value can easily be removed from the networks.

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A potential improvement would be a “cash flow in the chain” metric that measures how much money passes through the protocols in a given period. Market manipulation (wash trading) could still be used to reinforce this metric, he warned, especially if the protocol does not charge fees. “Any metrics we try to assign will be imperfect because of the way the systems are designed,” he concluded.

Keys proposed a different metric:

“What interests me most is the Gini coefficient. I want to see millions of people borrowing $100 instead of one person borrowing $1 million. … I think that’s an important metric for ecosystem growth, so we don’t have … a 1% (versus) 99% economy again.

This hits a major problem with the current heavily burdened nature of the DeFi ecosystem. For example, 30 wallets represent over 70% of the activity on platforms like Compound, according to data from, DappRadar.

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Keys also argued that the Gini coefficient is an important component in measuring decentralization, he said:

“We need to decentralize the user base. The smaller the amounts of money, the better.

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However, Sassano noted that because of the current cost of gas commissions at Ethereum, starting small in the DeFi space is not very practical.