To date, the Rift protocol:
- Processed over $70M in deposits.
- Deployed liquidity pools for 15 DAOs.
- Collectively saved millions of dollars for partner DAOs.
- Protected the downside of over 1,500 addresses providing liquidity.
- Offered max APYs up to 140%.
- Facilitated the launch of 2 tokens with guaranteed immediate liquidity
The first version of the Rift protocol was developed to solve a clear problem in the growing decentralized financial system: DEX liquidity. In traditional finance and centralized exchanges, companies can rely on market makers to ensure sufficient liquidity for their stocks. DAOs, however, do not have this luxury on decentralized exchanges. Instead, they were forced to incentivize liquidity through giving away tokens to anybody who provided liquidity on decentralized exchanges. This was a flawed system that incentivized short term speculation from investors, while harming the long term potential of DAOs. Rift is a protocol that was developed to invert these incentives, allowing DAOs and investors to work together. Given how much the DEX liquidity problem was costing DAOs, the Rift protocol rapidly picked up traction upon deployment.
All of this was achieved in one of the most turbulent years in crypto’s history. As an insolvency contagion spread throughout centralized and opaque institutions, decentralized and transparent protocols like Rift worked flawlessly. We are proud to have driven the industry forward in a sustainable way that saved our fellow builders millions. At the same time however, activity in the decentralized finance sector as a whole demonstrated significant correlation with asset prices as they steadily moved downwards this year.
Steadily decreasing DEX volume throughout the year (where Rift yield is generated)
Given the correlation between activity and yields, there was a noticeable shift in deployment preferences among the core liquidity provider partners. This price downturn happening in conjunction with the Fed’s decision to raise interest rates simply made DeFi participation a poor risk adjusted return for many investors. Many of the larger capital deployers in the Rift protocol informed us that they were simply removing their positions from DeFi entirely to place their capital in treasury bills.
We are still extremely optimistic for DeFi in the long term, as we believe the sector will grow to become the backend for the global economy. However, we are maintaining a realistic perspective on the near term prospects for any DeFi protocol and are weighing that against other more foundational opportunities to contribute to the crypto economy. We started Rift with the goal of driving forward a decentralized, global economy for any person across the world who wishes to live a self-sovereign life, and we’re excited to continue building towards that vision.
Looking Forward To 2023
For many projects, this coming year will not be easy. Public markets are likely to remain bearish, there will be regulatory backlash from the mismanagement of centralized platforms and public skepticism among users is likely to remain high as news of these mismanaged institutions spreads.
While the short term macroeconomic picture may appear bleak, this project was started with the 10+ year vision of building a self-sovereign society. The Rift foundation has over 5 years of runway to tackle some of the biggest problems in crypto, and the core developers behind Rift are a deeply technical team that built through the previous bear and deployed production smart contracts that handled tens of millions of dollars.
Most importantly, all who are contributing to Rift are relentlessly optimistic about the path forward for crypto, and have high conviction in the global impact this industry will have. We are building the technological foundation for a self sovereign society — nothing excites us more.
Through the development of the Rift protocol, we have become deeply familiar with the constraints of smart contract platforms today and are extremely excited about upcoming innovations in both scalability and functionality that will unlock entirely new domains for the decentralized economy. In particular, in our six years of building in crypto never before have we seen such exciting opportunities presented by rollup and zero knowledge technologies to solve the problems experienced by developers today.
- Scalability: Having been in the industry since 2017 we have seen firsthand (as well as actively built on) the multiple waves of promising scaling solutions (state channels, plasma, etc). All of these attempts have failed but we have developed deep conviction that rollups will be the future of crypto scalability. The existing deployments have already demonstrated further progress than any predecessor and are far from full capacity. However, there is a lot of work to be done for these systems to achieve the same security, openness, and censorship-resistance that Ethereum holds today. We are deeply committed to accelerate the widespread utilization of these systems in a way that preserves the fundamental properties of Ethereum today.
- Functionality: Moon math is here. Zero knowledge proofs are reaching the earliest stages of production-ready use cases and we could not be more excited for what this opens to builders like us in the industry. ZK systems promise to revolutionize every component of the stack today with alternatives that are more secure, private, economical and efficient. New cryptographic primitives are what ignited the entire blockchain industry, ZK technologies present similar promise to unlock a categorically new set of possible system designs for our decentralized global economy.
Innovations in these technologies will be the backbone for growth in crypto throughout the coming years. As our team moves into 2023, we will be focusing our efforts on these domains as they present the greatest promise to fundamentally advance the crypto economy and accelerate the arrival of a self-sovereign society.
Moving Forward As Recursive
To reflect our new focus, we’ll be shifting our communications from Rift to Recursive. In 2023 we plan to leverage our talents to innovate at the most foundational levels of our rapidly evolving blockchain stack. Since the introduction of Ethereum in 2015 never has there been so much opportunity to improve essential components of the decentralized economy. This year we plan to:
- Dive deeper into the stack — in 2022 we leveraged the power of smart contracts to create a decentralized finance protocol, this year you will see us building closer to the infrastructure layer where we anticipate a vast majority of the value will accrue as blockchains networks become unbundled.
- Become industry leaders in the novel mathematical techniques that can be applied for both scaling our existing blockchains as well as expanding their functionality. You can expect a majority of our research to be published in an open source manner and we invite you to follow along both on twitter and discord.
- Be on offense — after building heavily used protocols, expanding our team and growing our relationships in the industry we are well positioned to thrive in a year where most companies are on defense. The most important crypto companies are built by those who maintain relentless drive and optimism throughout bear markets. We will leverage this time to expand our product offering, innovate at fundamental levels of the stack and position ourselves to lead the next wave of adoption in crypto.
Thanks for being part of the journey so far, and we’re very excited to share our progress this year with you all along the way as we scale crypto through zero-knowledge powered modular network design.