Dan Elitzer, investor at IDEO CoLab Ventures, describes a concept he describes as superfluid collateral made possible in the decentralized finance space. We talk about which DeFi projects make this possible, how one can make collateral liquid so that interest can be earned from it, and what kinds of tokens could both serve as debt and earn interest. (Surprisingly, even trading pairs, particularly on the Uniswap decentralized exchange, which exist as tokens, can do so!) Based on the growth of Uniswap and DeFi, there’s more than $300 million in collateral on Ethereum, causing Dan to make a prediction that Uniswap pool shares could serve as collateral for millions of dollars in loans within months. However, he admits that such a system could be risky, and discusses how he thinks such risks should be managed.

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CipherTrace: http://ciphertrace.com/unconfirmed

Episode links:

Dan Elitzer: https://twitter.com/delitzer

IDEO CoLab Ventures: https://www.ideocolab.com/ventures/

Dan’s Medium post, Superfluid Collateral in Open Finance: https://tokeneconomy.co/superfluid-collateral-in-open-finance-8c3db15efac

MakerDAO interview Part 1: https://unchainedpodcast.com/rune-christensen-of-makerdao-part-1-how-to-keep-a-crypto-collateralized-stablecoin-afloat/

MakerDAO interview Part 2: https://unchainedpodcast.com/rune-christensen-of-makerdao-part-2-how-dai-stayed-at-1-while-eth-crashed-from-1400-to-85/

Unchained interview about Compound: https://unchainedpodcast.com/how-youll-earn-interest-on-your-crypto-with-compound-ep-82/

Unchained interview about Dharma protocol: https://unchainedpodcast.com/nadav-hollander-on-how-dharma-could-create-new-forms-of-debt-ep-80/

Unchained interview about 0x: https://unchainedpodcast.com/will-warren-of-0x-on-why-decentralized-exchanges-are-the-future/

Uniswap: https://uniswap.io