Disruptive DeFi - The Daily Gwei #136
Disruptive DeFi - The Daily Gwei #136
We're coming for you, TradFi.
Tyler Winklevoss tweeted out this news yesterday that an ETH fund is going to be listed on the Toronto Stock Exchange and has already raised $75 million. Obviously, this news is quite bullish but what I’m more excited about is what tycoon.eth replied with below - that is, when are things like the Toronto Stock Exchange going to be on Ethereum?
Source: https://twitter.com/tyler/status/1336839087093919744
So Ethereum is on track to radically transform the financial system as we know it by creating a more fair and decentralized system - this is obviously known as DeFi. Though DeFi is still very insular and hasn’t really made any strides in the traditional finance world - hell, it may as well not even exist since it’s so small as $15 billion locked is fun but that’s just a rounding error to the traditional system. Though we all obviously believe that this will change in the future.
One of the next major steps for DeFi is to disrupt and transform the incumbents such as centralized stock exchanges. These machinations are of the slow and boring old-world where trading can only be done in certain windows of time, the interfaces to access these systems are clunky and there’s no concept of “money legos” to be found. On top of all of this, these systems are not self-sovereign and are not “bankless” which means everyone is at the mercy of the centralized players.
As bullish as I am on DeFi, I still think it’s going to take quite a while before it actually disrupts these legacy systems simply because the switching cost is still quite high and DeFi needs to grow much, much larger before TradFi takes it seriously. Though what I do think will happen is that traditional finance will begin creating “bridges” into DeFi and crypto in general where they can tap into the ecosystem without having to cede control of their own systems - pretty much what centralized crypto exchanges are already doing. This can be viewed as either a positive or a negative but honestly I think it’s both - new people get exposed to the various DeFi products that we’re building (the positive) but the negative that comes with it is that centralized parties still retain their power.
It’s inevitable to me that DeFi will disrupt both crypto-based CeFi and normal traditional finance in a large way for many reasons but as with all new technologies, those closest to them tend to overestimate just how fast adoption will happen which can lead to disappointment. For me, this is a multi-decade game and not something that will be won overnight so it’s best to just sit back, relax and enjoy the ride!
Have a great day everyone,
Anthony Sassano
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All information presented above is for educational purposes only and should not be taken as investment advice.