In the event, the wilder theories (Arbitrum airdrop) were proven wrong. Instead, when the accounts in question revealed their news on Monday, it transpired to be something very novel indeed: an experiment in social coordination. What exactly does this mean for DeFi and what prompted the campaign?
In total, more than 30 of the leading DeFi protocols took part in the campaign including Yearn, Element, CoW Swap, Balancer, Aura Finance, Euler, Gearbox, Dopex, Pods, Opyn, SushiSwap, DegenScore, MakerDAO, Stake DAO, Zerion, Ajna, Aave, Oasis.app and Pods Finance. Each of the projects named another in their tweet, branding it “an experiment in social coordination.”
Essentially, the campaign was conceived to send the message that “together we are stronger than the sum of our parts.” Amidst all the in-fighting, competition for DeFi users, chasing market share, and inwards-looking developmental focus, it’s easy for DeFi projects to forget that they’re not alone in this.
Broadly speaking, DeFi projects share a common goal: to provide an alternative financial system that is more private, egalitarian, and fair than anything offered by TradFi. For this goal to be realized, projects should work together where possible, promoting healthy competition rather than constantly seeking to outdo one another.
A second goal of the campaign was to emphasize the decentralized, trustless nature of the protocols themselves: web3 is permissionless, which is why each project took the decision to “permissionlessly” share information about an ostensible competitor.
The Enemy Lies Outside
The crypto industry, DeFi in particular, faces threats from external actors intent on applying pressure to stymie its growth. Over the last few months, a concerted effort by the US government to pressure banks into stopping crypto payments has ramped up. This has made it increasingly difficult for users to move funds in and out of the cryptosphere.
This has also affected crypto businesses, including Binance which recently suspended all deposits and withdrawals in USD using bank accounts on February 8. Because an outright ban on crypto is virtually impossible to enforce, these “backdoor” methods of thwarting adoption, while pushing for parallel technologies such as CBDCs, are likely to increase.
Given the severity of the threats faced by DeFi protocols and the industry at large, efforts such as Monday’s social coordination campaign are a signal that success will only come when projects work together.