![]() ![]() ![]() In December, he testified before the House Financial Services Committee, emerging as a credible advocate of federal regulation, preferably under a single, unified regulatory regime. In addition to the company's success, Bankman-Fried has emerged as a thought leader in the crypto/DeFi space. I was one of the most bullish internally on FTX-and thought there was an 80% chance it would fail to get traction, he said. ![]() And yet, founder Sam Bankman-Fried, who just turned 30, tells the Observer that he wasn't sure the company would pan out. The company has hired Tom Brady and Naomi Osaka to promote to the masses. Something like ten percent of the cryptocurrency traded every day around the globe takes place on FTX. The Observer is very grateful to our editorial partner CoinDesk for guidance on creating this list. Arguably Bitcoin has transformed into a highly concentrated asset, both in mining (0.1% of all Bitcoin miners control half of all mining capacity) and ownership (1% of Bitcoin owners control 27% of its supply). But we want the list to reflect as much as possible the principle of decentralization. It's almost certainly true that without Bitcoin's birth in 2008, none of the entries on The DeFi Dozen would exist, not in anything like their current form. You may notice the absence of Bitcoin from this list. ![]() At the same time, these dozen entities do very different things, and so a single yardstick can't be applied, but almost every entity on this list is a market leader in at least one way that fuels the DeFi economy. How did we choose this list? To the greatest extent possible, we based it on available data: market capitalization, valuation based on venture investment, Github search results, mentions on CoinDesk. Also worth noting: not one of the entities on the DeFi Dozen is more than ten years old. The players on this list are responsible for a huge chunk of that. The size of the DeFi market fluctuates because even the largest coins and tokens shift dramatically in value, but many 2022 estimates put the total value locked in DeFi protocols at over $100 billion. They are more like globally scattered choirs that have consented to sing from the same songbook-yet together their voices can shatter glass. Indeed, calling this a list of a dozen “companies” is a misnomer several of these entities are not structured as companies at all. They are remaking not only the world of finance, but everything we think about the creation of value. The Observer has sought to capture this energy in our first annual DeFi Dozen, a nonranked list of the most powerful and influential entities fueling this revolution. While cryptocurrency won't overthrow the Russian Army, the idea of delivering emergency aid directly across borders, with no chance to be intercepted by warlords or corrupt governments, has an obvious appeal. The potential power of this movement became profoundly clear when the government of Ukraine opened itself up for cryptocurrency contributions following Russia's horrific invasion-and $100 million worth of crypto contributions zapped through in a matter of days. Yet we are living through a revolution of decentralized finance (DeFi), in which trillions of dollars in annual transactions take place in channels that are not controlled by any one entity, in part because a significant number of the transactions are across national borders. Stock and bond exchanges are "centralized" to ensure, among other things, that there aren't people setting up shop to sell the same financial instruments at a different price (this practice was routine in the 19th century). These days, almost every country or economic bloc has a "central" bank, to ensure uniformity of things like money supply and interest rates. The idea of "centrality" is, for historically understandable reasons, crucial to the development of economic stability and growth. ![]()
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