Defi — Society often does not trust “intermediaries and banks”. Will decentralized finance become the mainstream in 2020?
This year has been a turbulent year. Social protests have taken place all over the world, and there have even been incidents like people burning ATMs and governments freezing accounts. With tens of thousands of bitcoins this year, how will decentralized finance and cryptocurrencies become the mainstream? This article cites Coindesk’s 2019 annual review on foreign media to discuss how decentralized finance (DeFi) can improve its usability and gradually move into the trend. mainstream in the next decade.
“2019 is a pivotal year moving toward the future of decentralized finance (DeFi) slowly but steadily.” Ethernet-based C lending platform (ethereum). Network CEO Alex Mashinsky said as Thus, he pointed out to today’s society that in general the agency and the central government are not satisfied: deeply distrustful towards most banks and financial institutions, and social media platforms on the growing false news at the same time, corruption, inequality and authoritarian doctrine force people to move from Hong Kong to San Diego, people in the streets screaming, demanding reform or successful setting up a new government.
Mashinsky drew a conclusion based on this general phenomenon: “This is why all roads lead to a” decentralized future, “one where everyone can control their own assets, data, and finances.”
A turbulent year
In 2019, rallies are taking place around the world. In Europe, Spain, Catalonia demanding independence, the conflict between Israel and Palestine in West Asia, the incident of East Asia in Hong Kong, etc., it is not difficult to notice that certain political and economic disturbances Zones, volume of Bitcoin transactions will have a significant increase.
Citizens are tired of the massive devaluation that comes with government corruption and mismanagement. Instead, they choose decentralized cryptocurrencies, hoping to regain their financial dominance and not let their assets evaporate due to inflation; for them, they would rather believe volatile and up-and-down cryptocurrencies are as obvious as the market and do not choose increasingly unreliable government-issued currencies.
However, Mashinsky points out: “With the advent of the year 2020, the crypto community finds itself in an awkward position: we’ve been too busy building the underlying infrastructure and providing support. for core participants, so much so that we almost forgot about the public. Consumers. “
Indeed, for decentralized currencies to become truly ubiquitous, one cannot always expect people to be disappointed with government. Mashinsky believes that DeFi needs to be included in the mainstream financial services sector. However, for this purpose, DeFi projects must build a cohesive architecture — including better user interfaces, highly accessible products and services, and stable currency. those who don’t know much about cryptocurrencies easily buy digital assets and participate in decentralized financial services.
Let the public embrace DeFi
Mashinsky has listed three main points that make DeFi acceptable to the mainstream:
1/ DeFi needs a friendly, intuitive and desirable interface; DeFi projects can and should maintain multi-signature contracts, protect data privacy, interconnect blockchains and all other decentralized functions, but they should be placed in “consumption. User-friendly apps, such as mainstream apps or online banking services.
2/ The DeFi community should create products and services for more people; Trading platforms and spreads are useful for day-to-day traders and hedge funds, but those who most need DeFi are not actively trading crypto assets.
3/ The DeFi project had to rediscover Bitcoin’s original intent by focusing on peer-to-peer transactions and removing “toll collectors” from financial services.
DeFi providers should note that due to price volatility, many people remain skeptical of investing in digital currencies; As a result, the stablecoins will become an important bridge from central legal assets to decentralized cryptocurrencies. First-time crypto users will be surprised to find that they can earn more interest on stablecoins than traditional savings accounts without having to worry about collateral depreciation; and similar to fiat currency, stablecoins can function like Bitcoin (BTC), Ethereum (ETH) and other cryptocurrencies and are the starting point of DeFi projects. DeFi projects like Celsius Network, where Mashinsky is the CEO, or projects like Voyager, Compound, and Monarch, specialize in providing more popular financial services, such as loans and Interest entry, property management and mortgage loans. Providing these services will allow DeFi projects to expand their coverage by providing real value to more people around the world, regardless of income, age or geographic location. .
Now it seems that even though Bitcoin has had tens of thousands of points back this year and the Ethereum ecosystem continues to expand, DeFi still has a long way to go. According to CMP, at the time of writing, the crypto-currency market cap is approximately $ 195 billion, 1500 billion more in assets than the tenth largest US bank Capital One under management.
Most consumers still do not have or are not accustomed to holding cryptocurrencies. They often choose to deposit their money in banks and other central financial institutions and only invest in stocks and bonds.
Mashinsky pointed out that just as we cannot throw our beginners swimming directly into deep water and expect them to swim well, we cannot introduce new crypto users into complex DeFi services and expecting them to become Hodlers, Mashinsky said: “Overall, DeFi and cryptocurrencies may be the mainstream, but they should be as easy to use as Facebook or Google.”
It has been 11 years since Bitcoin’s inception, with the efforts of the crypto community and changes in the world situation, although there is still some way to go but bringing DeFi to be a result of decentralization that everyone can join in and enjoy the power of decentralization that isn’t far off. Mashinsky encourages everyone to continue their efforts into 2020 and looks forward to the arrival of the DeFi world day.