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Again. In DeFi to buy what you use is not a terrible idea (yet).
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).
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.