How to encourage new teams to Deploy Defi Solutions on Cardano?
This is the total amount allocated to F7: Seeding Cardano's Grassroots DeFi
Currently, the vast majority of DeFi dapps and assets flows occur on the Ethereum blockchain, however due to congestion and increased transaction fees, the use of DeFi is increasingly elitized, leaving out the people who could most benefit from it, the unbanked.
Over the past year several DeFi projects have been moving to more scalable blockchains, such as Binance Smart Chain, Polkadot, Cosmos, Solana, among others. Second layer solutions are also being used as alternatives to Ethereum main chain, Polygon has been a great example.
In this migration and bridges creation scenario, some projects are turning to Cardano to create their DeFi projects.
Cardano is finally delivering smart contracts and that opens a door to a lot of innovation in DeFi. We can offer not only a scalable blockchain, but also a secure blockchain and aggregated governance layer in the near future. This set of characteristics place Cardano in a prominent place and with a good opportunity to gain market share and expand the user base.
With Catalyst, we have the opportunity to fund DeFi projects and allow them to have greater decentralization and resilience, which are essential aspects for DeFi projects. Many projects end up accepting the participation of Venture Capitals due to lack of financial resources. The participation of VCs in DeFi projects usually ends up causing a large part of the supply distribution to be alocated to VCs and this compromises the decentralization and consequently the security of these projects.
The DeFi ecosystem today is taken over by projects full of vulnerabilities, hacks are constant, economic models are copied from other projects, decentralization is no longer a priority and few projects are dedicated to create economic models/bonding curves/algorithms thinking about the users' needs.
It has become clear over the year that bugs, hacks and vulnerabilities are not unique to smart contracts on Ethereum. Dapps running on Binance Smart Chain and Cosmos suffered from vulnerabilities as well.
Cardano arrives to change this paradigm and bring security to users.
Privacy and resistance to censorship are also important but often overlooked in favor of subsidizing (yield farming). How to encourage DeFi projects to seek resilience, safety, research-based economic models and critical thinking?
RATIONALE FOR BUDGET DISTRIBUTION
New or less popular teams have difficulty competing with influential and popular teams in the Cardano community. Even ensuring a good score is difficult to get engagement in the voting stage to compete with consolidated and influential teams in the Cardano community.
This challenge intends to sow new teams, who have never received funding from Catalyst so they can have a chance to show their value to the community.
Each new team can request up to 25% of the total $200,000 USD budget, also know as $50,000 USD.
Why is it important?
So that new teams can have a kickstart in their projects without having to resort to ICOs and VCs allocation.
How does success look like?
At least 4 new teams deploying DeFi dapps on Cardano in 2022 + Managing to form a community in order to gain competitiveness/susteinability
Key Metrics to measure
View all the ideas that were allocated funding in this challenge.