Alright, the elephant in the room here is this 18% return guarantee that daGama and 8lends are making. My first impression? Equal parts skepticism and curiosity. We’ve all been there, witnessing the DeFi graveyard chock-full of projects that had a nice sales pitch, but produced nothing but vapor. 3 reasons this partnership feels different. But something about this collaboration feels different, and it’s worth digging into why.

Real-World Returns In DeFi?

The core of the daGama/8lends proposition is simple: bridge the gap between DeFi and real-world SME lending. Rather than focusing on elaborate tokenomics and unsustainable incentives, they’ve fundamentally grounded their returns to the underlying businesses creating revenue. It would be the same as comparing a carefully developed sourdough starter (real-world revenue) to a packet of instant yeast (token incentives). One has substance, the other is fleeting.

Look, this partnership isn’t just about finding and pursuing the highest possible yields. It’s about creating a more sustainable financial ecosystem. 8lends carries the deep expertise of traditional finance, including borrower screening, credit scoring, and regulatory compliance (very important in Switzerland, by the way). daGama provides the DeFi backbone: tokenization, smart contracts, and on-chain transparency.

Here’s where that healthy skepticism comes back into play. As attractive as the idea of real-world returns powering DeFi may be, it creates a host of new risks. All at once, we’re not only concerned with smart contract bugs or rug pulls. We are worried about the creditworthiness of European SMEs. But are these loans really as safe as they’re advertised to be? What happens during an economic downturn?

DeFi For Everyone?

In real life I’m from the East Coast, but online I go by Ellyna! Can’t wait to hear how daGama & 8lends are opening up DeFi to more folks! Yet the promised "DeFi for everyone" can sound very empty, indeed, when the onboarding experience takes a PhD in cryptography.

The sleek and intuitive User Interface, level of identity verification and robust portfolio management tools are all clear strides in the positive direction. The focus on regulatory compliance in Switzerland is a huge win for risk-averse investors who are used to traditional finance.

Let's be real. And even with a rosy user experience like that found in DeFi today, things still feel scary. How would daGama and 8lends teach their first-time users about the risk of playing with other people’s money on the line? Will they provide resources in multiple languages? Or will they just continue to ignore the digital divide as they ignore the financial literacy gap keeping so many from joining the digital economy?

These are questions that need answering. Inclusivity is about more than just unlocking the door and inviting people in. It’s not just creating great streets—it’s making sure everybody feels safe, comfortable, and empowered to walk along them. It’s akin to giving someone a new Tesla and sending them the keys, but neglecting to provide any driving lessons. What's the point?

Risk Redefined or Just Relabeled?

This is the million-dollar question. But are daGama and 8lends truly reshaping DeFi risk, or just repackaging it in a more catering manner?

The transparent underwriting, Swiss regulations and data immutability on the blockchain are all very good signs. They don't eliminate risk entirely. Keep in mind that even the best regulated financial institutions can go under.

  • Transparent Underwriting: Great, but what are the criteria? Are they truly mitigating risk?
  • Swiss Regulations: Excellent, but regulations evolve. How will they adapt?
  • Data Immutability: Fantastic, but data can be accurately immutable, or inaccurately immutable.

Here's where the "unexpected connection" comes in. Just look at the 2008 subprime mortgage crisis. Those loans were “safe” only because, we were told, they were collateralized by rock-solid real estate. When the housing bubble burst, the whole house of cards came crashing down.

The same could happen here. If too many of these SMEs fail to repay their loans, then the whole daGama/8lends ecosystem might be in danger.

So, what's the verdict? I'm cautiously optimistic. Both daGama and 8lends are making strides in emphasizing real-world returns and investor protection and I believe they are both on to something. While I am excited by the possibilities, we should be guarded in how we view this partnership. First, it’s critical to be clear-eyed about the risks.

Do your own research. Never put in more than you are willing to lose entirely. And don’t forget, even in the artificially “safe” world of regulated DeFi, nothing is guaranteed.