Recently, I authored my first issue about decentralized finance, Issue #23, in which I dipped my toes into what decentralized finance (DeFi) is and what it might mean for traditional financial markets (TradFi) in the future. In that issue, I admitted that I had become cautiously optimistic about DeFi’s potential to disrupt (and perhaps even improve) the plumbing and architecture of the legacy financial system. While I still do not consider myself an expert on cryptocurrencies, digital assets, and DeFi, I have spent some time and energy researching and playing around with various protocols on different blockchains in the past few weeks and feel that I know enough to offer an update on my previous views with some more specific commentary.
I am interested specifically in DeFi because I believe it harbors the potential to become a new medium of exchange, replacing the impenetrable, obscure, and inflexible layers of the wholesale Eurodollar banking system with an alternative that is rules-based, transparent, and much more flexible. On the one hand, we have this bilateral and bespoke monetary system, in which even the ruling international regulatory body (the Bank for International Settlements) is incapable of fully and properly measuring the complex web of counterparty relations. On the other hand, we have blockchains that can function as a shared ledger that is fundamentally publicly available and accessible to everyone, which ensures that all transactions are perfectly transparent to all participants, not just those involved.
Extremely I'm agree:
I am interested specifically in DeFi because I believe it harbors the potential to become a new medium of exchange, replacing the impenetrable, obscure, and inflexible layers of the wholesale Eurodollar banking system with an alternative that is rules-based, transparent, and much more flexible. On the one hand, we have this bilateral and bespoke monetary system, in which even the ruling international regulatory body (the Bank for International Settlements) is incapable of fully and properly measuring the complex web of counterparty relations. On the other hand, we have blockchains that can function as a shared ledger that is fundamentally publicly available and accessible to everyone, which ensures that all transactions are perfectly transparent to all participants, not just those involved.