Part two explores achieving a healthy market by focusing on liquidity, utility, demand, and volume and leverages the EVM to catalyze the Divi developer community through initiatives such as Divi Ventures and Dev Jams.
If you’ve been following me or the project for the past few months, you’ve seen me championing the “Four Pillars of a Healthy Market.” These pillars are Liquidity, Utility, Demand, and Volume. It is difficult to achieve a healthy market, viewing these items as critical drivers, because they form a chicken and egg problem. One begets the other, and so on. So, how do we achieve these things?
We have already taken the first step. By integrating GSR as our market maker, we have enabled deep liquidity in the market. We have also launched the Divi DeFi platform, which provides decentralized liquidity and the potential for cross-exchange arbitrage.
However, just because there is deep liquidity lying in wait on the CEXs and growing liquidity on the DEX doesn’t mean much if there is not enough utility to drive demand, which generates volume.
Currently, the utility potential of $DIVI is limited. You can spend it at a variety of online and offline merchants. You can stake it. You can deploy it as liquidity in the DeFi AMM pools.
While the Divi Blockchain is highly robust from a security perspective, it doesn’t have much flexibility. In other words, you can’t develop much on top of it. There is no ability to write expressive, Turing Complete smart contracts with the Divi Blockchain.
Does that mean we just toss it out? Absolutely not. Divi is a vital part of the ecosystem as a settlement layer and a driver of consensus on Layer 1.
We can focus on the newfound ability for $DIVI (ETH) and $DIVI (MATIC) to be leveraged for new tools, products, services, etc., in Web3. At the same time, we continue to maintain the baseline infrastructure that bolsters the ecosystem.
I will explore how this shift will take place later in this blog.
Start thinking of ways you can use $DIVI now that we have access to the EVM. It doesn’t have to be highly technical! It can be a simple game, an NFT drop, a helpful tool, or anything your mind can imagine. Look at all the integrations the Bonk community was able to put together. You may find this silly, but they had an insane run, and look at all the use cases that the community built for it in a short time. It doesn't have to be groundbreaking. It just has to be something where people can use their $DIVI.
If a meme coin can do it, indeed, we can too!
The more utility we create as a community, the more demand we will drive toward the coin.
Demand & Volume
As stated above, once enough utility is available throughout the ecosystem; we will start to drive demand: the more demand, the more volume. The more volume, the more traders will look at the coin, and round and round we go.
The $DIVI coin is now on Ethereum and Polygon. That means building new use cases for $DIVI just became 100x easier. Hundreds of thousands of developers already know how to work with Solidity (Ethereum’s smart contract language), and now we can attract them to our ecosystem! If you are a developer and a Divi community member, you should consider ways to capitalize on this new toolset.
Here are some of my ideas for how we can catalyze the Divi developer community.
If you’ve been around for a while, you may remember an idea that my co-founder, Geoff McCabe, had called Divi Ventures. This concept would enable community members to contribute their own $DIVI and vote upon new projects that would receive funding for building new Divi use cases. While there was significant interest in the concept, it could never take off because there is no decentralized, on-chain way to manage the fund on the Divi L1. There is also no current way to apply for Divi Foundation funding, nor have any projects built to date received significant funding for their efforts.
However, now with access to the EVM, this insurmountable hurdle no longer exists!
Let's reinitiate the conversation about Divi Ventures. I envision it working like this (purely an example):
Remember, this is purely governance over the Divi Ventures “arm” of the ecosystem. This collective doesn’t contribute to decisions outside the mandate of funding new use cases for the ecosystem. I’m not married to the numbers above. They are just a starting point for discussion.
Dev Jams are a great way to collaborate as a community and build fun use cases. This activity is typical in the game development community and helps developers hone their skills and create or iterate on ideas.
Let’s schedule periodic Dev Jams with anyone willing to or interested in building new use cases for the ecosystem. These would be short, weekend-long events where we each develop a concept and knock it out over the weekend. The Dev Jams will be an excellent opportunity to quickly deploy many use cases for Divi over a shorter period. They don’t have to be groundbreaking ideas, but maybe one or two will go viral!
Please join me for a Twitter Space this Friday to discuss the concepts discussed here, and look out for the next post in the series, to be launched one week from today.
You can also join the Divi DAO now, as we will open the discussion on the governance framework over the next weeks, starting this Friday.