The Founder Fireside Chat series hosted by DeFi Pulse interviews DeFi founders in the hopes of offering readers an opportunity to better understand their perspective and what drives them to build their vision.
This week, Michael J. Cohen, founder of xToken, joins us to discuss the awesome power and potential pitfalls of composability.
What are you building and what sets it apart from similar offerings in the space?
We’re building simplified off-the-shelf investment strategies. We got started with a focus on wrapped native staking tokens (e.g., xSNX, xAAVE, xKNC) that encapsulate the end-to-end staking/claiming/reinvesting processes into set-and-forget, composable ERC20 tokens.
We’re continuing to build native staking wrappers, but recently we’ve moved into Uniswap V3 liquidity strategies and soon we will launch our internal lending service, anchored around our yield-generating xAssets.
Which quality of the Scalability Trilemma do you find to be the most important?
It’s hard to pin down the “most important” element — the nature of the trilemma is that each quality is eminently important but in constant tension with the other two. But I do feel like decentralization requires the most long term vigilance.
Liquid staked ETH solutions, for example, are an impressive technical innovation offered by teams with good intentions, unlocking billions of dollars in value. But without proper vigilance, it’s not difficult to see the network slipping into a semi-centralized state in the hands of a few projects. I’m not suggesting any malice or mal-intent…just a gradual descent into centralization. This all said, it seems like the prominent teams in the space are aware of the challenges on the horizon and are making a strong effort to decentralize.
What is the most critical part of forming a lasting community?
I think a lasting community forms when a team shows up in the bad times as much as they show up in the good times. Our project has had some challenging times, but our core team showed up for our community and now we feel like our core community shows up for us.
What is something in DeFi that you think more people should be paying attention to?
How quickly conventional wisdom becomes stale. I’ve only been in crypto since Spring 2018 and the CW on pretty much everything DeFi or ETH-related has changed multiple times.
What is a critical lesson you have learned on your journey?
Make sure to sell at the top.
What is your favorite meme from the DeFi community?
The *always has been* meme. We’ve all been so obsessed with psy-ops and conspiracies and rugpulls for so long at this point and “always has been” kind of captures that jaded irony.
Thank you Michael for chatting with us and for that cleverly concise but critical lesson. 😆 And as always, thank you for reading.