I’ve started building a CREAM position. It was motivated by me using their platform to deposit my DPI — which I plan to eventually and strategically put some leverage on. As I’ve said before, at this stage in the cycle, buying what you are using is not a terrible idea.

CREAM caught my attention recently when they unveiled the plan for the Iron Bank - a way to do uncollateralized lending to protocols. This is a pretty revolutionary and underappreciated primitive, and I suspect it could only be done by an incentivized runner up. Just like Aave did flash loans (and not Compound).

DT @dgntec

Cream basically delivered this with the Iron Bank 1/

DT @dgntec

@KentoInami theoretically, if you had some credible source of recurring income linked to an address you could do credit analysis - i.e. lending money to @iearnfinance's treasury for example

8:58 PM ∙ Jan 17, 2021

I also like the quick CREAM / AAVE comparison. CREAM can be quickly explained to a newcomer as Aave, but with more assets (like DPI) and less TVL.

This brings additional risk, of course, but comes at a much lower valuation. Market Cap/TVL for Aave is 1.85 while it’s 0.16 for CREAM.

This plays into my thesis of selecting promising runner ups while they are still relatively cheap — SUSHI is a similar, but more expensive bet.

It’s more beta, given their smaller size. But it’s also alpha if there’s a credible case for the runner-up, as I believe there is for both CREAM and SUSHI.