Andre Cronje is a blockchain programmer, entrepreneur and prolific writer on DeFi and the cryptocurrency ecosystem as a whole.
In fact Andre’s writing is one of the key reasons that he’s made it as number six on our Exodus top 10 most influential people in crypto series, since it provides insight into what it’s like to build and manage a DeFi dapp (decentralized application).
In this article we’ll cover some of Andre’s opinions about DeFi, and consider what makes Yearn, Andre’s flagship protocol, so unique.
Andre Cronje's Reflections About Building in DeFi
Andre Cronje is an especially interesting person to follow since he gives us a behind-the-scenes look into how DeFi actually works. As an expert programmer and serial builder, Andre has a unique understanding of what it’s like to create a decentralized application, and how a protocol’s users affect the project.
Building in #DeFi sucks, one of Andre’s most-read articles, was published in February of 2020. In the article Andre articulates why launching a dapp is so difficult, especially when only one person is doing the work. The following are a few of Andre’s key points.
The users
Andre has found that DeFi users are rarely satisfied with the product and are quick to demand improvements. According to Andre, “No matter what you do, they [the users] will be unhappy, and they will make a point of telling you so.”
The community
Anyone who has been in crypto for a while must be aware that the community can sometimes be unfriendly, bordering on hostile. Andre has found that the community for his projects is, “Constantly looking for any bit of information to pick you apart.”
This comment suggests that rather than providing constructive criticism, most people are interested in attacking a project when something goes wrong.
The cost
Building in DeFi is expensive. In an article entitled Things I wish I knew before building Ethereum #DeFi dapps, Andre explains how he spent nearly $20,000 to launch the first version of Yearn finance. That was the price tag even though Andre didn’t have any employees and did all of the coding himself. $20,000 is nothing to a large corporation but for one person it’s a lot, especially if the costs are being paid out of pocket.
One year after the original article came out, Andre published a follow-up article called Building in defi sucks (part 2), in which he further enumerated his views about why it’s difficult to launch a DeFi application:
A lack of real users
In Andre’s experience, “Real users are scarce, for all the billions we have in defi right now, if you strip away the subsidies (paying for users), this number will collapse.” One has to wonder, if they couldn’t mint governance tokens, which DeFi protocols would survive?
The blame game
As a builder, one of Andre’s frustrations is that, “Your success belongs to your “community”, but your failure is 100% your own.”
Another frustrating aspect of this success/failure paradigm is that rather than being judged on its merit, a project is often judged by how well its token does. Andre has written, “Your value is only as good as your token, token go up? You built an amazing protocol, its the future of finance, blah blah. Token goes down? You are a scammer, fake project, bad coder, blah blah.”
That’s a lot of criticism levied against DeFi, however, as Andre himself admits, “Any industry has its good and its bad. You leave an industry when the bad outweighs the good. I’m still here, so don’t get me wrong there is good.”
We’re glad that Andre continues to build in DeFi, since he has obvious talent and his projects tend to be quite popular. One protocol in particular has been a runaway success. Yearn finance has more than $4 billion in TLV (Total Valued Locked) and is the 9th most popular DeFi dapp on Ethereum.
Andre Cronje's Unusual Approach to Launching Yearn
Anyone who is unfamiliar with Yearn, Andre’s most popular project, can check out the Exodus guide; What is Yearn Finance?
As a brief summary, Yearn is a yield aggregator. Users deposit assets, like USDC or DAI, into the protocol. Yearn takes the assets and deposits them into another DeFi application with the best income-generating opportunity. For example, if Aave pays 4% interest on USDC deposits and Compound pays 3%, Yearn will move all of its users’ deposits to Aave. If the interest rates change, Yearn will relocate the assets to whichever protocol has the best yield.
Andre explains the concept further in his article, yETH vault explained.
Launching Yearn
Andre launched Yearn in Q1 of 2020. As mentioned, Andre coded the entire project and paid for all of the expenses himself. One of Andre’s key takeaways is that a developer shouldn’t, “dabble in building smart contracts unless you have some cash to spare, this has already cost me a lot more than I thought it would.”
Several months after Yearn went live, Andre Cronje did something unexpected and which is almost unheard of in the DeFi ecosystem. Roughly five months after launching Yearn, Andre minted the YFI token and distributed it to all of Yearn’s liquidity providers. And, that’s it… Andre reserved no tokens for himself or a Yearn development fund. With a total supply of 36,666 coins, and a trading price of $40,000, had Andre even kept 1% of the YFI tokens he would be sitting on a pile worth nearly $15 million.
The fact that Andre didn’t keep any of the tokens has given him something of a legendary status in the crypto community, with some comparing Andre favorably to Satoshi Nakamoto.
Some of Andre’s more recent projects include Stablecredit, a flexible lending and yield platform, Deriswap, which provides a mix of loans, swaps and futures /options trading in order to increase capital efficiency, Fixed Forex, a decentralized stablecoin exchange protocol that aims to bring the world of foreign exchange onto DeFi, and Keep3r Network, a decentralized gig economy network which specializes in helping projects find support from external developers.
Andre was also heavily involved in developing Hegic, the decentralized options platform, and Fantom, the highly scalable layer-1 blockchain.
Andre Cronje’s Motivation
Andre Cronje’s motivation isn’t to capitalize on every profitable opportunity or to get fabulously wealthy, his motivation is to build really cool stuff. Much like Picasso enjoyed painting and Hemingway enjoyed writing, Andre enjoys coding and creating awesome products that people love to use.
Nothing illustrates Andre’s unique views better than his take on a bull market. He believes that a bull market in crypto can demotivate developers, since they see scam projects succeed while legitimate projects languish. In Andre’s words a crypto bull market, “rewards the scammers and the copycats.”
While Andre’s writing can be at times disheartening, that doesn’t mean he’s wrong. Andre has more firsthand experience with DeFi, token economics and decentralized project management than 99.999% of the world. We’re often reminded of why DeFi is great and how it’s going to change the world, but from Andre we can learn what needs to be better.
Top 10 Most Influential People in Crypto, the countdown:
10 - Vinny Lingham
9 - Kathleen Breitman
8 - Gavin Wood
7 - Elizabeth Stark
6 - Andre Cronje
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.
