How DeFi will enable participants to reimagine financial markets?

Written by Timo Lehes, co-founder Swarm Markets, a regulated DeFi exchange

Financial infrastructure touches every part of our lives, from paying for a coffee to buying a house, whereby playing a critical role in economic development and stability. In recent years, FinTechs have emerged to improve the user experience of institutions and offer additional services through an API. They have sought to democratise access to global markets by making them more transparent and give some level of control to the user. We’ve seen this happen in other industries where new technology improves user experience. For example, in the travel industry Booking.com effectively removed a whole layer of intermediaries and gave people direct access to booking hotels, flights and even day trips. The advent of decentralised finance (DeFi), made possible by blockchain technology, takes user experience of financial markets one step further. By digitising financial markets, the people using and engaging in them are able to re-imagine how they are built. Putting users at the heart of financial market design, instead of venues, will incite the creation of novel products based on individuals and institutions unique trading needs.

Aren’t markets already digital?

Whilst markets are electronic, they are still based on a paper system developed centuries ago. They depend heavily on the role of financial intermediaries…