Having grown from a loosely organized group chat, DeFiEye is developing a new and expanding path that is different from traditional companies. Although DeFiEye has not set up a complete governance structure and incentive token economy, and thereby cannot be strictly defined as a DAO, its story is still a meaningful and successful case study for exploring where and how a community can be united and constantly produce value.
Even though the Web3 scene has recently been cooling down and entering a bear market period, DeFiEye is still “BUIDLing” and preaching. Last week, Pandaily conducted an exclusive interview with Co-Founder of DeFiEye, Teddy. During our one-hour conversation, he shared the history and the mission of DeFiEye, his understanding of decentralized versus elite management, and his vision for Web3 amid ongoing turbulence.
Pandaily: Can you please introduce the mission of DeFiEye? I noticed you have launched multiple Web3-related tools and educational documents – what value are you trying to deliver through those features?
Teddy: We are trying to build an investment platform of Web3. Firstly, we have tools available, including both alpha tools and open-source tools. Secondly, we also output many high-quality contents in different formats and channels. For example, we have daily newsletters to curate industry information, in-depth research reports. We also host essay competitions to scout outstanding content producers. Thirdly, we are also building a community for Web3 participants, including contributors of DeFiEye and BUIDLers from other projects as well. We want to manage the community in the form of DAO, and make use of the on-chain token economy of governance and incentives in the future. In other words, we want to deliver values and reach consensus through an organization with a new relation of products in the Web3 era.
Pandaily: So tools and content are two main foundations of DeFiEye as a programmatic alpha community?
Teddy: Yes basically. We have a lot of writers who express their understanding about specific topics. Tools are corresponding to programmatic. There are two parts. One is developed by our full-time engineering team. Mainly are core alpha tools. One is mainly contributed by the community, which is composed of multiple open-source and free tools.
Pandaily: Is DeFiEye a DAO?
Teddy: That depends on your definition of DAO. DeFiEye is not a well-defined DAO since we have not set up our own token economy, on-chain voting system, treasury, etc. However, that is our goal and we are working towards becoming a DAO. We currently have seven function groups, including operations, content, etc., and we are using an accumulated point reward system to incentivize members.
Pandaily: You mentioned DeFiEye is implementing an “accumulated point reward system.” Who is responsible for distributing points? In the traditional company system, your manager decides whether you can get a salary raise or promotion, but that is what DAO hopes to change.
Teddy: We have a guideline, in which we formulate a series of behaviors and their corresponding points. Thus, people will have a general idea about how many points they can earn. The guideline will be updated if needed in the future. As I mentioned, we are not fully decentralized at this moment. If we were to be decentralized, we might initiate a proposal and invite DAO members to vote for any guideline changes.
Pandaily: You have stated multiple times that DeFiEye is not a well-defined DAO at present. Can I recognize it as a blend between a company and a community? Based on your understanding, what is the key difference between a DAO and a C Corporation, apart from tokens?
Teddy: You are right. DeFiEye is not a company, either. It is in the middle of being a community and a company, but eventually, as I underscored, our goal is to be a DAO. I think a DAO needs to have a treasury, a multisig mechanism, at least. DAOs also need to have a mission and vision. The whole community structure, token economy, and other designs have to be constructed aligning with the mission.
Pandaily: Another question that always pops up along with the incentive design is talent scouting, since both of them are related to human management. DeFiEye was born as a loosely connected community, so how did you attract high-quality and active members and manage your community?
Teddy: High-quality content is the foundation. You also need to do some user stratification according to their knowledge about crypto.
Pandaily: Having people to join the community is only the first step. You also need to figure out who can make solid contributions and is willing to be a core member of your DAO. Any tips here?
Teddy: As you said, DeFiEye has been evolving from a community. We started from a WeChat group and a Weibo account and then moved to Twitter and Discord. During this process, we have accumulated a member base, some of whom are not only very knowledgeable and capable, but also pretty active in the group. We will then invite them to take different functions, including operation, content, etc. Thus, those core members are not from nowhere. Instead, we have been BUIDLing together before they join the team.
Pandaily: It is a mutual process. You observe your members, and vice versa.
Teddy: Of course. Members will contribute constantly if they feel the community is helpful, even without financial rewards.
Pandaily: The process you mentioned might be more suitable for early-stage DAOs. When the DAO size has reached a certain level and it becomes almost impossible to spend time observing each candidate, how can you decide whether you want to have someone as your new member?
Teddy: We have a discord specifically for recruiting. Those who want to join us need to introduce their crypto-related experience, expectations for being a DeFiEye contributor, preferred functions, previous work, etc.
Pandaily: You mentioned the important role of content in the development of DeFiEye. I once read a tweet that said the most important skills that someone should hold in Web3 are coding and writing. What is your opinion? If someone wants to get advice for getting into the Web3 realm, where would you advise they start?
Teddy: Coding and writing skills are definitely very helpful. If you know how to code, you can participate in the development work – either front-end or back-end. If you have writing skills, you can produce content. This content does not have to be very deep. No matter whether you code, write, or even produce videos, you need to create some value and insight.
Pandaily: How do you define “insight” here?
Teddy: It means being helpful. For instance, you may produce a new user guide via writing or video and lower the entry barrier for newbies. Or, you may write an analytical article. It is not necessary to have a fully-agreed conclusion, but if you provide a fun approach with logic and streamline complicated facts, then it can also be insightful.
Pandaily: Besides coding and writing, what other skills are useful?
Teddy: The same as what you would need in any company. Marketing, BD, etc.
Pandaily: We have discussed a lot of skills, since DeFiEye provides a very good example of how to convert the power of community to that of production. Another one of the most valuable things DeFiEye has offered is your tool to detect alpha projects. I believe you also have some observations and comments on the industry trend.
Teddy: The overall NFT market is in a slump. Many projects are taking a “meme” approach recently, because it is easy to be promoted broadly. We are all going to die is a good example. Another example is Shitcoin. Its anti-elitism property causes its marketing efforts to boom. You can tell meme-alike projects are growing, but the price has been dropping since few days ago. Thus, we still need to wait.
Pandaily: You mentioned We are all going to die. DeFiEye detected it at a pretty early stage. How did you find it?
Teddy: Mostly from an investment perspective. Our own tool tracks a project mainly focusing on its rate of return. After the tool grabbing a new project, we will take a look and evaluate it.
Pandaily: You are checking a project mainly from an investment perspective. How about the storytelling and narrative?
Teddy: Some other community members might focus more on the narrative perspective. They will have another framework to decide whether a project is worth investing.
Pandaily: What if you have different opinions on the same project from different perspectives?
Teddy: Currently, we do not have an investment DAO to invest together. Thus, a 100% agreement is not needed. We might have some internal discussions to exchange our thoughts. If we were to have a fund to make investment in the future, we might need to reach a conclusion.
Pandaily: It sounds like you are planning to set up an investment fund within the DAO in the future. Do you have any other future plans for DeFiEye?
Teddy: When the team expands to a certain level, there might be some new requirements regarding compliance that we need to pay attention to. During the process, we will draw lessons from the experience of other DAOs as well. We might be very aggressive regarding investment, but we want to be more conservative regarding compliance.
Pandaily: In the long run, what makes DeFiEye stand out from other Web3 investment platforms?
Teddy: Some of our competitors focus on trading and marketing, but we focus on investment and content. We are BUIDLing tools, which might not be able to bring returns immediately, but those tools will benefit us in the long run. For example, we are developing a tool on cross-chain bridge. We have also done a lot of on-chain and off-chain data collection, information curation, and insight aggregation. Regarding the content, we are outputting high-quality content and attracting new creators through exploratory article competitions. We are providing something that can leave long-term value to the whole ecosystem. The crypto world is always full of FOMO, but we still want to BUIDL some solid things.
Pandaily: How does the bear market impact your plans?
Teddy: It depends. Is the coin price dropping continuously and constantly? Or it will keep at a low but comparatively stable position? If it kept dropping, the participants might drop as well. Otherwise, there might be some new concept popping up.
Pandaily: What is your reaction towards those two conditions?
Teddy: We will keep our eyes more on infra-level construction. We might optimize different layers of data and our API design, for example.
Pandaily: What is your prediction for crypto’s development in the following years?
Teddy: It is hard to tell because it is deeply impacted by the macro-level policy. When crypto becomes more mainstream, it becomes tightly tied to the macro economy. In the last wave of bear market, the crypto market was more independent, but now, things are different. However, separating from the economic cycle, I believe DeFi and NFTs are still renewing the traditional format of productivity. They bring a new format of property and trading. They reformat the financial market. They also revolutionize a lot of technical foundations.
Regulation might be a key topic in the following years. LUNA, stETH, Celsius all tell us we have a lot of work to do to increase the security of the whole industry – to make it more reliable.
Pandaily: Any advice to Web3 people? How should they prepare for the next bull market?
Teddy: To learn, to absorb, and to try. There will be new concepts and projects looming all the time. If you can catch any of them in the early stage, it will be helpful to both yourself and your community.
Pandaily: How does DeFiEye help people during the bear market?
Teddy: Firstly, our tools will help people detect new alpha projects. Secondly, we want to do more education work to invite more people to join the game.
Pandaily: As for the educational part, will you do more user stratification work?
Teddy: Yes. We have had three stratifications already. One is alpha hunter, those who are willing to pay for tools. One is those who are holding some Web3 experiences and using our free tools. One is the newbies, who need to catch up with the most basic concepts.
Pandaily: Any predictions about the next bull market? What can we expect the next wave to come?
Teddy: It is very hard for a new project to boom during a bear market. However, many projects were BUIDLing during the bear market, and when the bull market came, they stood out almost immediately. I think those that focus more on infrastructure construction will receive more attention at the beginning of the next wave.
Pandaily: Is there anything you want to supplement?
Teddy: I want to restate what I want to do from another perspective. How is a blockchain formed? Each member in the community can be seen as a node. When you make any contributions, you earn financial rewards. It is called POW (proof of work). I am the first node in DeFiEye, and other nodes are growing gradually. Step by step, the whole network becomes larger and stronger, and naturally, has higher value. DeFiEye can be viewed as a POW blockchain.
Note: The cross bridge tool Teddy mentioned in the interview is now participating in the Gitcoin Grant Round 14. If you are interested in it, you can click the link and make a donation.
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