“Crossing the chasm” refers to the concept that there is a giant chasm between the “early adopters” of a new technology and the “early majority”. If a particular technology is able to cross this chasm then it means that the product or service has reached a point where it is easy-to-use instead of something that only people with specialized knowledge can use. Now, I don’t think Ethereum and DeFi have crossed the chasm just yet, but it’s getting closer every day.
CNBC @CNBCWhat exactly is DeFi and what does it mean for the crypto economy? @Kr00ney breaks it down for us. https://t.co/0fJGW8MUWq https://t.co/YpfjziTP1Q
My tweet above links to a video from CNBC where reporter Kate Rooney is discussing both Ethereum and DeFi as being the “next big thing”. In her own tweet, she says that she’s been hearing “a LOTTT more buzz about it [DeFi] after the #Coinbase listing” which won’t come as a surprise to you if you read my piece from the other day. I think Kate did a pretty good job of breaking down what DeFi is for a mainstream audience (even though it was full of buzzwords - our fault, not hers) and generally I’m just really excited to see more coverage for something other than Bitcoin on mainstream media. While this coverage alone won’t help DeFi directly cross the chasm, it will help with general awareness and start incepting the idea of DeFi into a new audiences minds.
You could probably argue that something like Bitcoin has already crossed the chasm due to its adoption from public companies & large institutions and you could also probably argue the NFTs have almost crossed that chasm. Though, I would say that DeFi still isn’t there just yet and we are probably still a little while away from it. Think about it, DeFi is amazing but it’s currently hampered by all sorts of things like high fees, limited scalability, new buzzwords that people have to learn, poor general UI/UX, limited on-ramps and frankly, a lot of DeFi just looks like a straight up scam (and to be fair there are many scams). To really cross the chasm DeFi needs to solve these issues - particularly those around scalability, onboarding and UI/UX - because we can’t expect everyone to spend weeks learning about DeFi just to be able to earn some yield on their dollars.
The most important aspect that DeFi needs to get right so that it can finally cross the chasm is having an end to end product suite that is as easy to use as something like a centralized exchange. This means that a product must allow users to go from their bank account to DeFi in just a few clicks. Dharma is doing pioneering work here with their mobile app (and so are others like Argent) but it’s going to take a major push from the entire ecosystem to get this right. As an example, Dharma and Argent still inherit Ethereum’s scalability and high fee issues so they need to wait for those to be ironed out before they can offer a truly seamless end-user experience. Though in the meantime they can come up with their own solutions (such as Dharma’s gas-lite solution).
All in all, I’m not really concerned about if DeFi will cross the chasm or not - I know it will - it’s just going to take some time and honestly, I’m a patient man. I would rather DeFi become much more scalable, secure and easy to use before we onboard the masses - after all, we don’t want to lose these new users just because they have a bad first experience!
Have a great weekend everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.