Community Driven Governance in DeFi: Superfluid Collateral & 122 Synthetic Stakes

Community Driven Governance in DeFi: Superfluid Collateral & 122 Synthetic Stakes

Written by
Taylor Silveira
Date published
April 14, 2023

🤝 💸 What does community-driven governance in DeFi mean?🧵 Superfluid Collateral + 122 Synthetic Stakes = DeFi Powerhouse

1/ 💡 Superfluid Collateral challenges the traditional notion of locked-up collateral. Why let your assets sit idle when they can be utilized to generate more value? Unlock liquidity from your collateral while still earning interest on it! 💰

2/ 122 Synthetic Stakes take collateralization to the next level. By pooling multiple assets into a single synthetic asset, you gain a diversified and dynamically managed basket of assets that mirror the value of underlying assets. 📈Read more about 122 Synthetic Stakes ⬇️

3/ The connection between Superfluid Collateral & 122 Synthetic Stakes? Optimizing collateral usage in DeFi protocols.Read @Messari's 2023 Crypto Theses to learn more:


4/ Superfluid Collateral allows dynamic adjustments for efficient asset utilization. Users can stake or unstake collateral easily for flexibility & liquidity.

5/ 122 Synthetic Stakes leverage this flexibility to generate synthetic assets with predefined collateralization ratios, adjustable in real-time based on market conditions.

6/ 🔄 It's a feedback loop of opportunities.Borrowers can use their collateral to generate synthetic stakes, which can be utilized for trading, liquidity provision, yield farming, and more.

7/ 🔓 Unlock liquidity, and maximize utility:Borrowers can engage in various DeFi activities while still participating in the potential upside of the underlying assets.Investors can diversify exposure, manage risks, and optimize strategies.

8/ Superfluid Collateral and 122 Synthetic Stakes are versatile and scalable solutions for DeFi participants. Use them with a wide range of collateralized assets such as cryptocurrencies, tokens, and digital assets.

7/ ⚡️ Proper risk management, due diligence, and understanding of the underlying assets and protocols are crucial to navigating this new frontier of DeFi successfully.

8/ 🔍 Several forward-thinking companies are pioneering the emerging sub-field of DeFi with Superfluid Collateral and 122 Synthetic Stakes.

9/ @synthetix_io, a leading DeFi protocol, is exploring the use of Superfluid Collateral and 122 Synthetic Stakes to enhance its synthetic asset ecosystem.

10/ @AaveAave, a prominent DeFi lending protocol, aims to make borrowing and lending more flexible by integrating Superfluid Collateral and 122 Synthetic Stakes.

11/ @Balancer, a leading AMM, is exploring the integration of Superfluid Collateral and 122 Synthetic Stakes to enhance liquidity management and composability on their platform.

12/ @CurveFinance, a popular DEX, is exploring the use of Superfluid Collateral and 122 Synthetic Stakes to enhance liquidity provision and risk management.

13/ 🚨 While these projects are exciting, it's important to be mindful of potential challenges and risks. Let's dive into some of them.Great EP w/ @delitzer on the risks:

14/ ❌ Liquidation risks: Borrowers becoming undercollateralized due to collateral value drop, potentially leading to liquidation or loss of funds.

15/ 📉 Market risks: Fluctuations in the value of collateral assets and market volatility can impact the performance and yield of synthetic stakes.

16/ 🔐 Smart contract risks: Vulnerability to bugs, hacks, or exploits in smart contracts, which could result in loss of funds.

17/ 🚫 Scalability challenges: Ethereum network limitations in transaction throughput and gas fees may impact usability, cost-effectiveness, and efficiency.

18/ 📱 User experience and adoption: The complexity of concepts may pose challenges for user adoption, requiring user-friendly interfaces, documentation, and education.

19/ 📊 Oracles and data reliability: Reliance on external oracles for price feeds and data, which may be subject to manipulation, inaccuracies, or delays, leading to potential mispricing and risks for synthetic assets.

20/ Decentralized governance of community-driven models has benefits, challenges, and implications for the future of finance. Let's explore some of them.

21/ Governance models involve token holders voting on proposals that impact protocols. Transparent & verifiable decision-making through on-chain voting mechanisms.

22/ 🌐 Community-driven decision-making allows the collective wisdom of the community to shape protocol direction.Token holders, users & stakeholders participate in discussions, debates, & proposals.

23/ 🔑 Ownership & engagement among community members are fostered through direct say in the development & governance of protocols. Legitimacy & acceptance among users & stakeholders can increase.

24/ 🔒 Resilience of protocols enhanced with decentralized governance, reducing risks of single points of failure. Challenging aspects of community-driven decision-making include achieving consensus, delays, and disagreements among community members.

25/ ⚖️ Responsible exercise of voting rights and working towards consensus is crucial for the long-term sustainability and success of these protocols.

26/ 📈 Active participation and engagement from the community are vital for the continued growth and development of these protocols.

27/ 🔮 🚀 Looking to the future of DeFi with SuperFluid Collateral & 122 Synthetic Stakes. Exciting opportunities are ahead of us!

28/ Adoption & maturity of these protocols may influence regulatory considerations & industry standards. Increased clarity & legitimacy for DeFi.

29/ 🏛️ These protocols may set a precedent for other DeFi projects & traditional financial institutions to adopt community-driven governance models.

30/ ⚠️ 🔍 Approach with caution & due diligence. Informed, engaged, & responsible users contribute to the long-term sustainability & resilience of protocols.

31/ The future of DeFi is promising but requires vigilance, research, & prudent risk management. Safe & prosperous journey in the evolving financial landscape.🌱 Continuous learning, research, & risk management are key to navigating the evolving landscape of DeFi.

32/ Thank you to @nonieengel@jetherean27, & @adlabossiere for your feedback on this piece.

33/ Are you interested in reading more content from the @chapterone researchers? Check out more content from cohort #2 here: