Finance requires two seemingly opposing qualities: predictability (i.e. smart contracts) and adaptability (i.e. AI). DeFi has spent years building reliable, transparent financial primitives through smart contracts. But we've not seen yet AI-driven dynamic allocation of capital as opportunities arise. Corners of DeFi are still incredibly inefficient and I think the smart application of AI will not only unlock arbitrage profits but also improve price discovery, anticipate market shifts, and inform directional positioning.

Tokenization is the means, not the end The real value lies in composability and programmability Crypto has its own culture, historically driven by demand for high yields and high returns. Simply putting a TradFi asset onchain doesn't create demand The opportunity is to make RWAs productive through DeFi primitives like leverage Issuers need to understand the market they're distributing into If you bring a product onchain without understanding what onchain users actually want, that's a skill issue

Loopers, we hear you You simply want to loop good assets, spend less time managing positions, have more clarity on performance and easier entries and exits with little drag We're are working hard to deliver on all of those things A sneak peek at what's coming for @3f_xyz users 👀

Capital efficiency visualized @symbioticfi vaults cooked by including the 3F BF adapter

It’s RWA season and RWA-backed lending is accelerating on lending protocols But we think RWA-backed lending ought to be done differently than crypto-backed lending to make it safe for the lenders See the presentation for additional lender protections @3f_xyz has built on top of @Morpho Don’t have unprotected lending

Tokenization —> programmability —> new distribution Come hear about how @3f_xyz provides new distribution mechanisms for RWAs

Gm motherland 🇰🇷 The 3F team will be here for the week! DM if you want to chat stablecoin yields, leverage and RWAs

The fascinating thing about DeFi is that the market in many corners is pricing onchain TradFi as riskier than crypto-native assets - largely because of thinner 24/7 liquidity That means TradFi yields need to pay a premium As liquidity infrastructure improves (ty @FissionXYZ instant redemptions, @grovedotfinance Basin, @symbioticfi Liquid Lane, @multiliquid_xyz, etc.) I expect that premium to compress

I'm curious how Morpho and crypto prime brokerage models are different from risk perspective Morpho's LGD (Loss Given Default) for BTC and ETH collateral is said to be near 0 Are the LGD numbers at Tier-1 crypto prime brokerages similar? My guess is that all this would depend on the assessment of the right overcollateralization ratio + liquidation speed but curious if anyone has knowledge here or data you could point me to

More distribution for onchain private credit! Excited to see 3F’s wFalconX borrow market selected as one of the first yield sources for confidential USDC deposits curated by @RockawayX Congrats to our friends at Rockaway