This article was written by PangolinK.
DeFi
Decentralised finance. A fast-growing, technology-driven financial sector that removes the stranglehold banks and institutions have on money and financial services; it does this through the use of the blockchain and distributed ledgers where every participant has access to all the information, ushering in a new age of transparency.
FIRE
Financial Independence, Retire Early. In short, it is the idea of investing aggressively to minimise the period of a career when someone ‘has to’ work. This idea has, perhaps, been misleading to many. The true aim of FIRE is to give a person financial independence so they can pursue and work towards projects that are meaningful to them.
The most important step in beginning the journey is the cognitive shift; to shift from a mindset that prioritises instant gratification to a mindset that values delayed gratification. A dollar saved today will be worth five dollars in the future.
Introduction
The modern world is replete with instant gratification and centralised control. To step away from these takes great courage, but in doing so the opportunity to prioritise financial freedom arises.
Many people work jobs that they dislike, or worse still, see no meaning in. Pursuing FIRE opens up the opportunity to undertake meaningful work that impacts the world.
Human beings by nature love to create and build, but many are trapped exchanging their time, the most precious resource available, for capital.
FIRE aims to shatter this bond of servitude. It gives someone the power to stand on their feet, rather than rest on their knees. FIRE is about freedom. Freedom through discipline.
Benefits of FIRE
Meaning
The primary benefit conferred to those who pursue FIRE is meaning. They are still in the rat race, but have now become aware of it.
Instead of staying at the level of a mindless consumer, that FIRE investor becomes a different entity, an entity that is autonomous. They attach themself to a plan larger than any one person, and in doing so become greater than their past self.
With the backing of capital one is no longer chained to an employer and instead freely pursuing a vision of one’s choosing. FIRE creates the freedom to choose how to spend one’s time. There is no greater feeling in life than having concrete goals and moving towards them.
Time is the greatest constraint to any individual, and all except a very privileged few must exchange their time to gather resources via labour. FIRE aims to give back this time so that it can be appropriately allocated by its owner towards things they deem worthy.
Security
Naturally an interest in FIRE leads to better economic health. It is the things which happen on random Tuesday afternoons that cause the most stress in life and much of this stress is economic.
Most of the stress experienced in life can be mitigated, if not mollified by having an investment pool and savings. Imagine investments to be the roots of a tree that anchor one in life so one cannot be dragged around by the capricious winds of circumstance. Instead, the investor stands tall in the face of all weather.
Freedom
Life is a game and should be treated as such. A thorough understanding of the rules is essential to engage with any game, and the modern world operates under a capitalistic framework, thus money is freedom.
To say that money is not everything is a right that is earned through the generation of capital. The game is to be smart enough to make lots of money, whilst keeping in your head that wealth is not the most important thing. FIRE allows people to live their lives in a fashion of their choosing, by removing the element of forced labour, the greatest drain on time, from their lives.
How to FIRE
FIRE is different for everyone depending on the cost of living, and the type of lifestyle someone desires to lead. But the two central processes remain the same for all: reduce spending and increase investment.
Certain people are happy to lead incredibly frugal lives and others enjoy more comforts. There is no one size fits all for this goal, but the general rule is one must have twenty-five times their annual expenses saved to facilitate early retirement or financial independence. It is a process of building wealth over a period of time.
Perhaps unbeknownst to most participants in the DeFi sphere, their actions align with the FIRE movement philosophy, but there is just one element missing which is the understanding of risk.
Many involved in the DeFi sphere see only outrageous APRs. These numbers chase away the threat of liquidation in their minds, with dreams of getting rich quick occupying their thoughts instead of getting rich slowly. This leads to going broke fast, instead.
DeFIRE
Enter DeFIRE. Our innovation is to combine the two ideas outlined above in one ecosystem. DeFIRE aims at facilitating FIRE through DeFi and offers all investors, regardless of location and experience, investment opportunities within the DeFi space. It will offer containers of assets with varying levels of risk for the investor to utilise in their journey towards FIRE.
Education
DeFIRE is an ecosystem aimed at transforming the ordinary investor into a battle-hardened FIRE chaser. One cannot linger in the DeFi space without hearing the acronym DYOR (Do Your Own Research), and this is the slang term to infer, “I am in no way responsible for whatever you do with your funds and losses that may be incurred.”
DeFi is still in its infancy and many protocols result in scams and rug pulls while others will deliver nothing but losses to their investors. DeFIRE is different.
Of course, the investor still handles the responsibility of his investment, but a central feature of the ecosystem is the DeFIRE Academy. DeFIRE provides educational content aimed at improving the financial literacy of its users.
In joining the DeFIRE ecosystem, one is not looking for a ‘get-rich-quick’ scheme but voting for the long term generation of wealth over time. DeFIRE represents a journey, and this is one of the primary reasons the ecosystem will launch using a pre-sale in place of the typical farming rewards. A participant votes for his long term faith via pre-sale purchase.
Efficiency
According to DeFi Llama on January 2nd, 2021, TVL (Total Value Locked) of the DeFi sector stood at $18.11 billion. As of March 1st, 2022, there was over $208 billion worth of assets locked. In just over a year this value increased over 1000% or a 10X.
Total Value Locked is the sum of assets currently earning rewards within the DeFi sphere. If an investor adjusts their lifestyle and makes sacrifices, it logically follows they will want the best returns on their investments.
The returns offered by DeFi outpace those offered by traditional financial institutions, and the new age of finance is arriving. DeFIRE offers investors a broad range of risk-adjusted assets to build an optimised portfolio for any investor that can achieve excellent returns, by any standard.
The blockchain technology revolution has begun, and early adopters will be rewarded accordingly. The days where banks or investment funds handle investments and release an annual report are fading; soon to be replaced with a new financial paradigm where every participant has access to every transaction transparently on the blockchain.
Embrace the cognitive shift. Forego the pleasures of the now to experience greater pleasure in the future.
