My first interaction with crypto was in 2016. Looking back at the crypto history, that was the second bull market. I got hooked quickly mainly due to my passion for trading. I love staring at numbers jumping up and down. And the volatility of crypto amplified the excitement. I registered a wallet and put in some gambling money. Then I forgot about it.
Then 2020 came along. 2016 – 2020 was a transformative period for me. My daily exposure to cutting edge technology and new business ideas has dramatically broadened my horizon and increased my risk appetite. Thanks to the industry I am in, I got connected with a legendary trader in crypto. Or more specifically, a trader in DeFi. He was kind enough to share an introductory book with me “How to DeFi”. It completely blew my mind.
If in 2016, I was simply excited about the underlying blockchain technology and many potential use cases it could come with. In 2020, many of the use cases become reality. It is no exaggeration to say 2020 is a hallmark year featured by an explosive number of high quality DeFi projects.
My not-so-short experience in traditional finance let me see the potential of DeFi, and how it will change the world for the better. I want to share some of the obvious benefits here:
Frictionless access
When I moved to London a few years ago, it took me one month to open a bank account. The time frame stays roughly the same in 2021. I can’t remember when I received my first credit card. But it was an embarrassing credit limit at a crazy high APR. Until this day, my credit limit hasn’t moved much. And we are talking about an individual with reasonable income and good credit history who also happen to live in a developed country. It could get a lot worse.
And we are talking about basic financial service access, like opening a bank account. I haven’t even touched upon more sophisticated financial services such as requesting a personal loan or mortgage or investing in shares.
With DeFi, you don’t need a bank anymore. Anyone can open a wallet within seconds and start using it for saving, investing or lending/borrowing. No more minimum balance to open an account or minimum credit score to borrow money. Everyone can access services/products that were only available to the privileged, proportional to their own financial reality.
Just pause and think what this means to the 1.7 billion unbanked population. I am thrilled.
(Almost) real time
I was told to send a bank check a couple of weeks ago regarding a fee needs to be paid to the building I live in. It took exactly 10 business days or two weeks for the status to change from “initiated” to “cleared”. I was chased twice by the building during the wait. My first thought was, don’t blame me, blame the system. It is 2021 and you still request paper checks to be sent? What on earth!
Even international money transfer with multi-billion fintech giants (I won’t name them) takes 1 – 3 business days to complete.
With DeFi, all money transfers/payments can be done in seconds (minutes if the system is busy). You also have the option to review the complete transaction path on Etherscan or Bscscan or their equivalents.
Finance education for all
Yesterday, I came across the news that FDA has approved EndeavorRx, a digital therapeutics solution created by Akili Interactive. It is the first-and-only prescription treatment delivered through a video game. Therapists can debate how effective it is. But what excites me is that it overturns the old stigma around medicine. Medicine doesn’t have to be daunting, it can be fun.
Here comes DeFi. Not only it makes finance education accessible, it makes it fun. DeFi is a field filled with a lot of young people. The youthful energy is reflected in the product, in the UI and the social media marketing campaign. I am often amused by a coin name, a gif or a short video that was shared on Twitter or Discord. The learning is always easier when it is fun.
In fact, as a social gamer, DeFi is the best video game I have ever played.
The bigger picture
In a world that both traditional fiscal and monetary policies no longer work, perhaps it is time to resort to new technologies to tackle the age old issue: how to achieve sustainable economic growth. The rise of bitcoin prompts us to re-evaluate: what is money? what is the best way to create and distribute money? DeFi might just be the answer.
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I have decided to have a dedicated space to write about all things blockchain and DeFi. I have conviction in this space. And I hope more people could see through the fear and greed, and get excited about a DeFi future.
Dreamerella 