Rabbithole #2: Past Events and New Ideas

Reviewing the last year, ideating around DFK, and new products on Solana.

12 min readMar 21, 2023

Hello!

Since my last issue, I have been focused on building the JewelBoyz Guild and understanding project expansions within GameFi (Gamified Finance) protocols. You can catch up on these topics and learn more about the group here:

The current market climate brought on a feeling of near-peak euphoria moment that reminded me of Solana’s (SOL) price action at the beginning of 2021. During this time, SOL led the market with a 30x return before skyrocketing to $200+ later in the year.

In comparison, my initial mentality viewed recent events as a new opportunity for GameFi to take the forefront in the growth of the crypto industry. However, I still have a somewhat naive outlook on how most of these concepts (formed in theory) will be applied in practice.

Whether these ideas come to fruition or not, let’s dive in!

Disclaimer: This article was initially published on Substack back in January 2022. Please reference provided information as un-updated and not completely relevant to the current state of the market.

Looking Ahead to New Sectors

Blissful ignorance and how I innocently viewed the world around me.

In this issue, I want to cover a few topics and review past notes from my previous write-up. An interesting outlook I have tried to spend more time understanding is the realization that hindsight should be taken advantage of for future situations. Too many times have there been repeated scenarios within this industry where I am sure users become distraught after realizing they have made the same mistakes again.

First, I would like to explain some necessary mental changes I had to experience while looking back on 2021 and how they have affected me going forward. Next will be our Treasury allocations, ideas for potential protocol expansions, and an update on the Guild.

Finally, I still enjoy testing out protocols on multiple chains and will share a few helpful resources about DeFi on Solana. By staying informed on the progress of other chains, we can assess overall market risks, the status of these networks, and the types of applications built on top of them.

A Note on the Year

One aspect of the last issue I enjoyed was being able to place all my thoughts down in one area to refer back to. Hopefully, this provided a small insight into how my brain has been working over the past year (basically pulled in all directions). I think going forward my commitment to this next year in crypto will be to continue reading about new opportunities and sharing my ideas within long-form posts or our Research Database.

I see no need to blame crypto but the past year has been such an overwhelming amount of information, resources, and opportunities (which I am ever so grateful for) that it has been nearly impossible trying to keep up with anything. Since this is my first cycle, there is this mentality of either missing out or seeing the fortune of others that ends up hurting your progress that I think everyone starting should seriously take into consideration.

Similar to the above image, you might also feel pure bliss in thinking that everything is right in the world or that nothing bad can happen to you. In reality, it is only a matter of time before you fall victim to your ignorance and suffer a similar fate as this bunny.

I remember beginning 2021 with my first real experience joining an ecosystem as the Solana community was establishing itself as a leading Layer-1 network. This was one place where the crypto market (both attention and liquidity) decided to focus on, however, multiple networks were all competing with each other at the same time. Some of the most prominent included BSC, Fantom, Avalanche, Polygon, and countless others. During this time, the main area that people would go to for trying out these networks was through DeFi protocols like PancakeSwap. Especially if you were early enough, it felt amazing to be able to watch the development of each community from its introduction to its most extreme levels of excitement.

However, even within this one ecosystem, there were hundreds of projects and thousands of people to interact with, something that I truly had not been accustomed to. It became a rather unbelievable form of collective efforts that came together to create something beautiful and yet, a feeling of insignificance often washed over me. I felt similar to a small cog in the machine, just observing a mini-cycle that is relative to other industries during their ebbs and flows.

What became important to me in hindsight is to look at these moments as an opportunity to enter any new space as a true beginner and learn from the ground up. Hana has been one of my favorite people to refer to when considering this mental framework as they are open to exploring any protocol, and always ready to develop what they set their mind to. It is this mentality that I think all people entering the crypto space should take into full consideration as there are frequent opportunities to learn.

From cupidhack on Twitter:

I will never be ashamed of being a novice or learning new things.
there’s so much depth everywhere. if you’re constantly curious you’re *always* going to be a beginner at something

To those that may have felt the same way last year, I urge you to take the necessary time to observe your efforts in this space and question whether you have truly had a productive state of mind during your daily/weekly actions. As you learn, setting overall goals should be a key point for you to follow but try not to diminish your outside responsibilities while achieving these objectives.

Even more important than the money at the end of the day, is what you are doing with it! One area of crypto that amazed me during my introduction to this industry is that there is a seemingly infinite amount of capital and resources flowing around. There are instances where people can either take advantage of the opportunities they have been granted or leverage this wealth for the greater good.

Over time I have seen schools being built, charities formed, and even the number of CT Twitch raids where Cobie gets people to send six-figure sums to random streamers. All have been amazing acts of kindness and comprehension of what is happening in the outside world and how we can create change with any newfound wealth.

With that being said, I think this last year was a good time to begin since it opened my eyes to various positive and negative aspects of an up-only market. Although it truly had its ups and downs, view your initial interactions as a learning moment and you should be able to improve yourself for the next time. Now we can push forward with what was learned, where failures overcame winnings, and how 10xs were achieved at random.

GameFi and JewelBoyz Updates

When understanding what a GameFi protocol is capable of, I think having a reduced outlook of larger MMO games can be a good place to start. For instance, there are guilds, or like-minded collectives, that form around mutual interests and their desires to succeed at said game. We had started the JewelBoyz guild with intention of becoming the strongest group in DeFiKingdoms (DFK).

Over this past month, one aspect of the game we had focused on was Mining and Gardening. You can think of the former as an interaction with the game itself where users can send their Heroes off to mine gold (or their locked tokens). The latter is similar to yield farming and utilizes the liquidity pools on DFK for what each Hero “gardens”.

These efforts have been rewarded with a 5x on our Treasury since our launch and we have created an even larger community than I could have expected. Although a larger Treasury is always great, I think there are more initiatives that community groups can take to improve the protocol they support.

Since one of my primary interests includes strategic partnerships and protocol expansions, I want this Guild to take a frontier-like approach and help DFK beneficially merge various projects for their ecosystem. Although these are very hopeful ideas, I think sharing them as they come is how true growth occurs and allows for healthy discussion on best practices.

Idea #1: Abracadabra on DFK

An area of crypto that I have been interested in since learning about Yearn Finance has increased opportunities for collateralization and optimizing for capital efficiency. I would like to expand on this by offering similar exposure to $JEWEL holders and DFK through lending protocols such as Abracadabra Money. After speaking on the concept below, I will eventually write a proposal to Abra’s forum explaining this in detail.

An example is provided here:

The above example essentially attempts to align the interests of DFK, SushiSwap, and Abracadabra so that liquidity can flow independently between each protocol. The idea is that each protocol will be able to benefit from the additional volume and new attention acquired from GameFi enthusiasts.

My initial notes were met with some feedback from friends at The Brain Trust and JewelBoyz and I have compiled the main ideas here:

Right now best overall options could be creating Spell-Jewel and Mim-Crystal pools, i.e. preparing for Crystalvale launch in advance and allowing for an easier onboarding of liquidity prior to to the Avalanche (AVAX) expansion.

This also integrates with Abra’s whole vision of being multi-chain and as a dominant lending protocol on every chain.
The idea works hand-in-hand with DFK expanding to different chains.
Allowing Sushi to operate as an additional cross-chain dex that could be used in combination with DFK’s DEX.
This also allows for getting rid of the weak(er) Gardens on DFK:
Instead of One-Superbid, Jewel-Shitcoin pools, use the Jewel allocations for a stable farm or a liquid staking version of xSushi-xJewel.

Initial Plan

We can view this opportunity in three separate ways by valuing the different connections available between each protocol and their underlying tokens (SPELL x SUSHI x JEWEL). Within this plan, the MIM stablecoin from Abra would be integrated as an additional stablecoin on DFK along with USDC.

Adding MIM liquidity to Sushi and DFK would benefit both platforms.
Instead of dumping the entire $750m balance into Sushi, this allows for using Sushi as a bridge and swap platform between each protocol’s respective chains.
This also helps users in onboarding onto DFK and integrating both communities through their protocols, instead of relying on outside sources.
MIM (and Abra’s overall theme) assists in boosting the storyline behind DFK.
Think of this as a magical, wizard-themed alternative instead of only using USDC or USDT as the desired stablecoin.
Implementing MIM could allow for the first stablecoin pool on DFK through MIM-USDC.

Benefits for Abracadabra

By setting up liquidity pools for these protocols, Abra can frontrun DFK’s expansion into Avalanche and become well-situated for the increased volume and attention it will bring. On top of this, an expansion fits perfectly with the multi/cross-chain outlook that Abracadabra has regarding its lending mechanisms.

From here, we would be able to create a new set of liquidity pools that adds to Abra’s exposure to different chains:

This potentially creates a new storyline for DFK and introduces a GameFi aspect to Abra that has not been seen before.
SushiSwap would be in a prime position to add additional liquidity to DFK since the recent $750m in liquidity from Abra could be applied for bridging to Harmony or earning yield through DFK itself.

Concerns

One aspect that was revealed to me relates to finding the right timing. While developers are building out the game, it could be detrimental to the overall growth of the protocol if we immediately start launching collateralization and lending markets. Especially when considering how over-collateralized most users end up being in these types of markets.

Some questions to consider here include:

Why should DFK invite additional risk?
What are the true benefits of collateralizing tokens like xJewel?
Should an implementation like this be built in-house first?

For example, the above description shows that the team has already spoken about wanting lending markets, but what is the best route for this to occur?

Going forward, I think these are the main questions that should be addressed first before moving on to a full proposal. Especially considering that DFK should gain the most benefit from any launch in this manner.

Additional thoughts:

I am primarily interested in seeing these types of opportunities pushed forward with further expansions in the same manner, however, this is really up to the DFK devs for making this a reality.

The opposing argument that we can create here is that this is still the crypto industry. If people want MIM on DFK they will gladly bridge it over and set up their liquidity pools. Whether or not this is successful is completely up to the users themselves.

The main area holding this back is MIM not being available on Harmony’s network. If/when this changes, it can be a very simple process for players to create a “___-MIM” pool and add their liquidity. This has already occurred with other in-game items where players have profited off of the trading fees incurred from gameplay.

This is just one example of how a guild can create ideas around protocol expansions and build out the necessary integrations for these concepts to work efficiently. By combining knowledge of the underlying protocol and a desire to explore further, users can become a key part of the community they plan to support.

Idea #2: Porting DFK to Solana

This is more of a recent development that we wanted to push forward and ended up piggybacking off of Lazul’s interaction with Solana’s founder, Anatoly. Although I had wanted to see DFK eventually expand to Solana, the actual methods for going cross-chain had escaped me. Anatoly spoke on porting the game over to Rust, whereas I initially imagined that using Neon Labs and their soon-to-be Ethereum Virtual Machine (EVM) release would be the best route.

Either way, I think we could create a beneficial opportunity for either group and create a more seamless entry for SOL on DFK. This was a cool moment to see where Anatoly’s interests are regarding other protocols. Now, speaking of Solana, let’s take a quick look at new products in their realm of DeFi.

SSOVs on SOL

A Single Staking Options Vault (SSOV) provides users the ability to lock up their respective tokens and earn a yield on these staked assets. These are vaults that can be customized to user preferences and allow for additional options for people to profit from their staked assets.

To better understand what an SSOV is, I would recommend reading Dopex’s breakdown of their vault structure.

For Solana’s current options protocols, there are two projects that I think people can start with:

Within these two protocols, there are various products they have created for implementing traditional financial products on-chain. One example of this includes Covered Calls from Friktion. This vault involves building a long position on a single asset like SOL and writing a call option on this asset. The user would then receive the additional profit from the option premium.

Ideally, this can become a new alternative for institutions and funds looking for structured products on the blockchain, which is where Katana is currently leading the way on Solana. Looking into where new users will arrive from, the tradfi side of crypto could take advantage of more complex structures that they are used to. Either way, when you find new protocols or ideas being discussed on your timeline, I hope this acts as a reminder for you to take the time to learn more about them.

Until Next Time

Although this series is much more off and on than I would like it, I have ideas around visiting concepts on Virtual Reality (VR) and some of my first insights into metaverse avatars. People have recommended products like the Varjo Aero and to learn more about NeosVR. There has been a wide variety of potential implementations, especially ideas such as Sirkitree’s Cosmos implementation.

For any additional information on Jewelboyz, feel free to visit our Twitter and keep up with the Guild’s Guide for updates. I will be continuing further research into other ecosystems and have enjoyed spending time in the Cosmos ecosystem. One valuable aspect is their developments around staking alternatives, such as Superfluid Staking. I have put together additional resources on this here.

If you enjoyed this article, let your friends know! Feel free to reach out to us on our Twitter and start a discussion about this topic as we love learning from our readers.