Innovation Key to DeFi’s Survival: Dragonfly’s Haseeb Qureshi Explains

In the Brief:

  • Dragonfly Capital's Haseeb Qureshi believes DeFi needs more than just high-yield products.
  • He questions CertiK reimbursing victims of Merlin and discusses challenges facing the Cosmos community.
  • He also stresses the importance of VCs using long lockups and predicts fewer monies in the future with increased automation.

3 - 5 minute read

The world of cryptocurrency can be a complex and ever-changing landscape. It is a space that requires a keen eye and a strong understanding of the market to navigate successfully. As the crypto market continues to evolve, it is important to understand the perspectives of those who are deeply invested in it.

Haseeb Qureshi is a managing partner of Dragonfly Capital, a well-watched crypto venture firm, and the moderator of one of crypto’s best podcasts, “The Chopping Block.” In an interview with CoinDesk, Qureshi shared his insights on various topics related to the crypto market.

The biggest change in the crypto market that Qureshi has observed recently is the demand for decentralized finance (DeFi)-sourced yield. He explains that this was a big theme that made DeFi attractive in a zero-interest-rate policy (ZIRP) environment. However, he notes that now the appetite for risk has changed, and in order to gain traction with consumers, companies have to do more than just create synthetic high-yield products.

Qureshi is known for his ability to predict the future of the crypto market with great accuracy. When asked if there are emerging trends that have developed this past year that he didn’t see coming, he jokingly responded, “Nope, I predicted everything perfectly. I also knew you would ask this question.”

When it comes to the Cosmos ecosystem, Qureshi describes the community as an army of generals. He explains that a community founded on the basis of radical independence from other chains is, unsurprisingly, unable to agree on stuff.

Following the fall of FTX, there have been numerous calls to rethink crypto’s market structure. Qureshi supports separating trading from custody, an option already being facilitated by prime brokers like Hidden Road and FalconX. He notes that post-FTX and post the Binance Commodity Futures Trading Commission suit, institutional players are no longer comfortable facing risky exchanges directly and taking on counterparty risk. In that regard, he believes that we’ll see the same disaggregation of financial layers that we see in traditional finance.

Qureshi is also a proponent of long lockups when making investments, both for investors and for the team. However, he notes that equity stakes are not necessarily locked up, and there is nothing that generally stops a company from selling its equity via a secondary transaction.

When asked if there will be more or fewer monies in 100 years, Qureshi responds with a simple answer, “Fewer.”

Qureshi also provides insight into designing crypto systems that have network effects without “Ponzi-like” attributes. He notes that Ponzi schemes don’t have network effects and don’t even have economies of scale. The bigger they get, the harder they are to sustain. That’s why Ponzi schemes that are small can survive for a while, but the bigger they get, the more likely they are to collapse.

The Bottom Line

Based on Qureshi’s insights, it is clear that the crypto market is continuously evolving. To be successful, traders must keep up with the changes and developments in the market. Separating trading from custody is a wise move, and long lockups are recommended when making investments. It is also important to be cautious of Ponzi-like attributes in crypto systems.

Disclaimer: The content in this article is provided for informational purposes only and should not be considered as financial or trading advice. We are not financial advisors, and trading carries high risk. Always consult a professional financial advisor before making any investment decisions.

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