Flash in the Pan or Future of Finance?

Hey Lantern Community,

You've probably heard: "DeFi is the future of finance."

They're not wrong. But the future doesn't arrive all at once.

Today, let’s rewind to 1998 and visit a pitch meeting that almost killed Netflix.

But first, market update!

How Netflix Almost Got Laughed Out of the Room

In 1998, Netflix pitched its DVD-by-mail business to many venture capitalists in Silicon Valley.

One VC bluntly told them their idea was literally shit:

"DVDs are a flash in the pan. No one is adopting this long-term. The big jump was from analog to digital. Why should I invest in a company that won’t be around in five years?"

He was absolutely right about the future: streaming would eventually take over.

But he was wrong about the timing.

Netflix’s founders knew movie studios were betting big on DVDs. That gave them at least five years to build a business - plenty of time to dominate the space and then transition into streaming when the world was ready.

So they built a DVD business first, then transitioned to streaming when the technology and market were ready.

The lesson? Being right about the endgame doesn’t matter if you’re wrong about the timeline.

The same principle applies to DeFi compared to Lantern’s model of lending.

From the book, “That Will Never Work” by Marc Randolph

The Trade-offs Between DeFi and Lantern

Here’s what happens when you choose DeFi lending.

You might get lower rates during stable market conditions, complete control of your assets, no KYC requirements, and fully transparent on-chain activity.

But those benefits come with significant challenges: rates can spike unexpectedly to 30-40% during volatile periods, you face potential smart contract risks from bugs and exploits, liquidations happen instantly with no grace period, there's no customer service when things go wrong, and the technical complexity can be overwhelming.

Lantern takes a different approach.

We offer something different:

• Fixed and predictable rates

• Institutional custody with insurance coverage

• A 72-hour margin call window that gives you time to respond

• A human support team when you need it most

• And a user experience designed for simplicity

Neither approach is inherently “better” - they serve different users. But for people who want stability, predictability, and support, Lantern is the bridge that makes crypto usable today.

The Five-Year View

Just like Netflix DVDs, the traditional lending model may not last forever.

DeFi will continue improving. UX will get better. Security will strengthen. Regulatory clarity will emerge. More people will use it over time.

But it won't replace traditional lending overnight any more than digital streaming immediately replaced DVDs.

At Lantern, we view ourselves as the bridge to mainstream adoption. And if history is any guide, the companies that build the bridge are often the ones that own the future.

The Bottom Line

If you're reading this newsletter, you're probably someone who values:

• Professional custody over self-custody

• Human support over code-only solutions

• Predictable rates over potentially lower but volatile rates

That's exactly who we built Lantern for.

We're not trying to be everything to everyone. We're trying to be the best solution for people until the time DeFi is ready to serve mainstream audiences. We believe that crypto will take over the world one day, but it won’t happen tomorrow.

Curious about whether Lantern or DeFi is right for you?

Call or text us: (415) 365-0100 or check our calculator: https://lantern.finance/borrow

Until next week,

The Lantern Team

This newsletter is for educational purposes only and does not constitute financial advice. Always do your own research before choosing any financial service provider.