It’s been a wretched year or so in the crypto markets.
The sector of decentralised finance has felt the pinch as much as anybody, with volumes and capital in the space free-falling from pandemic highs.
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However, there are still things happening in the industry. This week on the Invezz podcast, we interviewed Oz Rabinovitch co-founder of Archimedes Finance, a borrowing and lending platform.
Archimedes has just kicked off its two-phase launch on the Ethereum mainnet, with its liquidity pool going live on Curve earlier today. The platform revolves around a leverage engine and promises attractive yields for investors, with Rabinovitch intimating these would start in the teens.
Naturally, that spurred some curiosity in me, given what has happened in the space over the last year. I immediately asked Rabinovitch one of the most important questions in crypto: “where does the yield come from?”, a question that many chose to ignore during the hysteria of 2020 and 2021.
I’ve always liked to come at crypto with a macro angle. In this sense, I also wanted to ask about how DeFi has been affected by the fatter yields now on offer in the real world. During DeFi summer of 2020, interest rates were near 0%. However, today the Fed fund rate is nearing 5%, meaning investors have a viable alternative for substantial yield at minimal levels of risk. Rabinovitch said the effect of these higher rates was significant, and we talked through how this has fed through.
We also chatted through the bear market, and how the DeFi space in particular has been affected. It was especially interesting hearing what it is like to launch a product in the depths of this market lull.
Archimedes sealed a fundraising round of $4.9 million earlier this year, in an announcement perhaps most notable for its timing, and the pool is launching as I type this. Last year, there were projects launched every week. Today, they feel few and far between.
For all of DeFi, the glory days of 2020 seem long gone. But it takes courage to be an entrepreneur, and many of the products that soared so loftily during the pandemic were created in the depths of the last bear market.
Continue the conversation on Twitter with @InvezzPortal, @DanniiAshmore and @ArchimedesFi. Or visit www.archimedesfi.com for more information.
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