Scrolling through Crypto Twitter is one of my favourite pass-times right now. A lot of cynical and funny individuals over there, it's fun reading their opinions and views on so many matters. And so I found it funny when some set of individuals said the Defi boom wouldn't last. Their reason was valid but flawed. And in my right now sought after opinion, I think that Defi will last for two most basic and fundamental reason.
We as humans have evolved a lot in how we store money. We first stored money by ourselves, but it could easily be stolen. And then the banks came along with their vaults to protect your money from theft, and we willingly gave them our money. But they came with a fundamental flaw, you had to relinquish ownership of your money once you handed it over to them, and they could do whatever they pleased with it. And then came our good friend(s) Satoshi Nakamoto with Bitcoin and Decentralisation. And today we have an offshoot of that called Decentralised Finance, more popularly known as Defi. Right now everyone in Cryptodom is loving the open access nature, resistance to censorship, privacy and the open democracy of finance far different from the centralised control that banks bring.
Like I said, Defi in my opinion will last for two most basic and fundamental reasons. The first is the Decentralisation it brings. No country, no matter how old or technologically advanced, has achieved the true meaning of Democracy, a Government of the people, for the people, and by the people. With Defi and it's Decentralisation, we can attempt to rewrite this wrong especially starting from the financial sector. The finance industry like I have said is a heavily centralised one but with Defi even the most common of us all has a stake and a voice there. For instance, in the cases of Decentralised Exchanges like Uniswap, and Newdex which I've been recently using a lot of the EOS Blockchain. You can add to a liquidity pool and that gives you a stake and a voice and governing power. In a Finance sector that the banks and government would have seized total control, this is a way forward. Its beautiful to see Defi taking control out of the hands of the central authorities, and making finance transparent, easily accessible, and open to everyone.
The second reason why I think the Defi boom will last is because you finally get to earn from Finance. I have overtime grown to hate banks, because in my country they promise a very minute interest (considering the crazy money they make) for keeping money with them but instead the money gets debited. But with Defi, yield farmers are making a hell of profit all by making their funds available for others to use when needed. I have my hands in a bit of yield farming and I must say it's really quite profitable. Yes the different platforms have their different rates so you should check them for the best before going in but they are all pretty dope. I majorly use Compound for my lending, also tried out Aave and Maker DAO (love Maker by the way). And yeah it's a pretty dope way to earn a pretty nice passive income.
But more than just Decentralised Exchanges and the Decentralised money market which are the two most popular, Defi is also pretty large and vast. There are Decentralised Insurances, Decentralised Derivatives and a whole lot more keep coming out on a daily basis. It really is a field I'm keeping a keen eye on, and I believe it will be here for the long term, don't let Crypto Twitter tell you otherwise.
Nice article and informative too.