Why is it important?

Plutus smart contracts are less likely to be hacked than those on Ethereum. This could become our ecosystem’s strongest point.

What does success look like?

Existing DeFi projects, PP#3 graduates and teams outside Cardano start building "killer apps" on Cardano, migrate here, attract TVL, thrive.

Key Metrics to measure

• Total Value Locked in Catalyst-funded projects.

• Total number of smart contracts and dApps.

• Market share of Cardano in total DeFi universe.

• Amount of ADA voted in favor of funded proposals.

Challenge brief

Fund-8 lacks dedicated DeFi challenge categories despite the success of “Boosting Cardano’s DeFi” (highest number of funded proposals with >100 million ADA Yes votes). Arguably, with the Alonzo hard fork just half a year ago and a month prior to the graduation of Plutus Pioneers Cohort #3, this is not the time to slow down.

Instead of lumping DeFi together with Dapps, where it may fare poorly due to the emergence of the category for the Cardano ecosystem, creating a dedicated category like in previous funds makes at least as much sense as it did before. If not much, much more.

Cardano smart contracts are less likely to be hacked than those on Ethereum or “VC chains” and this might turn out to be our ecosystem’s strongest point – if we give it a chance.

DeFi applications that should be proposed in a dedicated DeFi category include exchanges, oracles, stable coins, synthetics and derivatives, insurance and crypto-backed lending. The emerging area of DeFi driven NFTs will also be perfect for this challenge setting: NFT staking, NFT collateralized micro lending, NFT powered escrow etc. (https://twitter.com/DanielTetsuyama/status/1499047129003683840)

<https://cardanofeed.com/hoskinson-reveals-why-cardano-has-an-edge-over-ethereum-and-other-smart-contract-blockchains-23631.html>

<https://iohk.io/en/blog/posts/2022/01/10/defi-demystified/>