Alice’s Adventures in DeFi Land

Andrew Spence
Blockchain and the Distributed Workforce
5 min readSep 19, 2021


Getting Curious About Decentralized Finance

The cover of The Economist caught my eye this week –

“Down the rabbit hole — The promise and perils of decentralized finance”.

The weekly newspaper was founded in 1843 and owned by wealthy industrial families. It’s significant that a pillar of the financial establishment has a cover story on blockchain and decentralized finance.

The title reminds me of a wet weekend in 2017 when I first got ‘curiouser and curiouser’ about blockchain. It felt like I was getting pulled into an economic, political, sociological and technological rabbit🐇hole. I share my notes and light commentary on the article with plenty of links and resources at the end for those feeling curiouser…

Since 2017, I’ve been to many blockchain meetups around the World. From start-up hubs in Berlin, to conferences in St.Petersburg, and the back-rooms of East London pubs. At these events you will find a heady mix of altruists, shameless shillers, technologists, futurists, investors, entrepreneurs and #hodl’s and #NoCoin’s. I’ve had speeches censored in Shanghai and might have shaken Satoshi’s slightly sweaty hand. Using blockchain to solve problems has many opportunities but a few barriers too, starting with communication. Explaining a critique of money, the internet, and staffing models, would be hard enough - then throw in slow database technology, cryptography and the risk of jail…and you get my point.

What is Bitcoin?

Anyway, let me know what you find down the DeFi rabbit 🐇hole!

Decentralized Finance According the The Economist

“I am under no obligation to make sense to you.” Mad Hatter

Some quotes from the article…

The promise of DeFi is that it could lead to a better kind of finance: a system that is quicker, cheaper, more transparent and less reliant on powerful centralized institutions. It could also underpin a digital economy that is less dominated by a handful of tech giants.

The ultimate goal is to replace intermediaries like global banks and tech platforms with software built on top of networks that direct the value they generate back to the users who own and run them.

the potential gains from payment and digital content platforms owned and governed by their users, a more open digital economy and a more efficient financial system are vast. The hope is that it is not all just a dream.

Cryptocurrencies are no different from the dollar, in that they rely on people having a shared expectation of their utility. However, conventional money is also backed by states with a monopoly on force and central banks that are lenders of last resort. Without these, DeFi will be vulnerable to panics.

Crypto Market Capitalisation — Source — The Economist

Digital libertarians would prefer that DeFi remain autonomous — imperfect but pure. Yet to succeed it must integrate with the conventional financial and legal systems.

As with the internet in the 1990s, no one knows where the revolution will end. But it stands to transform how money works and, as it does so, the entire digital world.

What problems does DeFi Solve?

Conventional banking requires a huge infrastructure to maintain trust between strangers, from clearing houses and compliance to capital rules and courts. It is expensive and often captured by insiders: think of credit-card fees and bankers’ yachts. By contrast, transactions on a blockchain are trustworthy, cheap, transparent and quick — at least in theory.

Are there any examples of useful DeFi apps?

Ethereum is verifying. In the second quarter this reached $2.5trn, around the same sum as Visa processes and equivalent to a sixth of the activity on Nasdaq.

Example of DeFi — Source — The Economist

Decentralized Exchanges — less vulnerable than centralized exchange to attacks and theft. In theory.

Stable assets — tokens pegged to the dollar or other currencies.

Lending protocols — for flash loans, using other tokens as collateral.

Banking the unBanked

There is not much focus on financial inclusion in the articles.

Banking the unBanked was a mantra and part of the crypto cultural lexicon. See for example Facebook’s failed attempt at Employer Branding with Libra.

Close to 2 billion adults are excluded from financial services worldwide, with just half of all financially excluded individuals living in 7 areas: China, India, Pakistan, Indonesia, Bangladesh, Mexico and Nigeria. The global percentage who have smartphones rises each year, from 67% in 2019.

Recently El Salvador has given it’s population a crypto wallet and $30 to get started. Businesses are obliged to accept the digital coins as payment. Salvadorans last year sent home almost $6 billion from abroad, mostly from the United States. The sum is equivalent to some 23% of the country’s gross domestic product. Only 30% of Salvadorans had a bank account in 2017, according to the World Bank. It will be interesting to see how the adoption of digital currencies will develop in El Salvador and other countries, if and when inflation rears its ugly head.

The DeFi Rabbit 🐇Hole

From Financial Inclusion to Global Workforce Inclusion

2 billion don’t have bank accounts, and 53% of the World’s working-age women are not in the labour force. There is a massive economic and societal opportunity to include these people in the economy and improve social justice — as I describe in my essay Unleashing the Decentralized Workforce.

The reason I was curious about blockchain initially was it’s potential to solve problems in the world of work and HR. The largest staffing and technology providers are now building the internet of careers, we have worker-controlled work-matching platforms and some emerging and exciting use cases of new type of organizations forming with DAOs.

You can read my latest research here — Blockchain and the Decentralized Workforce.

Andrew Spence is an independent Workforce Strategist.

He publishes Workforce Futurist Newsletter.

You can connect with him on Twitter, or on LinkedIn.



Andrew Spence
Blockchain and the Distributed Workforce

Passionate about making work better. Writes Workforce Futurist Newsletter.