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Michael
@michael
I've been digging back into new web3 products recently and spent last night looking at a new defi protocol, https://x.com/bunni_xyz. Here's what I learned, why it's worth talking about, and what the rise of tools like this can tell us about how web3 is changing...
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Michael
@michael
Confession: I've put a considerable amount through defi over the years but I don't have a clue how liquidity providing works. It's a black box that I've never taken the time to open. With Bunni, now I don't have to. Bunni is like self-driving for liquidity providers. Normally, LPs have to stay on top of market movements really closely. They narrow and widen positions and move capital between active/idle constantly based on market conditions. Bunni does this for you. They have three key features: position shapeshifting (dynamically adjusting risk), auto-compounding yield (unused capital gets deposited in Aave for more yield), and MEV shield (protects you from front running by bots). Together, these changes make LP management mostly automated. You still need to decide what to provide, of course, but Bunni handles most of the day to day minutia of making it profitable.
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Michael
@michael
Zooming out, tools like Bunni are part of a clear trend in web3 products. New technology starts inaccessible and esoteric and then gets wrapped in layers of accessibility until anyone can use it. This pattern isn't new, every tool we use has a similar story: - Stock brokers → Robinhood - FTP servers → Dropbox - IRC → Slack Web3 is on the same journey. And from the products of the past we can generalize a few principles about how web3 will play out too:
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Michael
@michael
1. Complexity transfer Apps are taking on the UX burden that people used to handle. Just like you don't need to understand how TCP/IP works to load a website, soon you won't need to know how defi works to generate yield. The UX bar is raising, and those who don't follow along will be left behind.
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Michael
@michael
2. People will pay a premium for convenience Bunni isn't the cheapest option. But much like people are happy to pay for Spotify and Netflix despite torrents being free, the cost doesn't matter. Wrap something in great UX and people will come.
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