DeFi: An unstoppable Wave?

I recently worked with a University College Dublin (UCD) Masters in Business Administration (MBA) team at the Smurfit Graduate School of Business and also Pluto Digital PLC (Pluto) to develop a primer on Decentralized Finance (DeFi) for newcomers to the sector called “DeFi: An Unstoppable Wave?”

The origin of the partnership is that I am a past Smurfit MBA graduate and last year was part of Smurfit’s Mentor programme for the MBA class of 2021. As part this programme Smurfit asked if I could help provide some topics for a final MBA project that MBA teams could self-select to tackle. I provided a number of project topics, and a team came together in Smurfit to research and develop a project on DeFi. The net result of this collaboration is this new primer paper, which I believe contributes to the knowledge base for newcomers to the DeFi space. I’m proud to have worked with Smurfit and supported the MBA team of Chris Powers, Conor Hyland and Kevin Mathews develop their original MBA project and then help turn the project in the primer paper, which you can find a link to below.

The goal of the primer was to create a white paper focused on DeFi, including the history, state of the art, and future implications for traditional finance. The team used research methods including, desk research, field interviews and active participation in DeFi itself. In total nearly forty experts were interviewed in the blockchain/DeFi space throughout the project, ranging from thought leaders, regulators, company executives, and enthusiasts. Pluto supported the MBA team with access to key members of its team, including CTO John Frizelle and other key team members for interview. The team’s enthusiasm for the project was infectious and their first-hand DeFi participation study, see p28, in which they detail the trials and tribulations of navigating the set-up of a MetaMask wallet and using the Yearn and Zapper protocols highlights the challenges faced by new DeFi users.

These challenges include: a lack of a clear educational materials, high gas fees on the Ethereum blockchain and difficulty navigating the dApps, to name but a few. The team also looked at a very important current topic also, which is that of regulation and the perspective of the paper is that “Fair global regulation is critical for the continued growth (of DeFi). Institutions will be hesitant to enter the market until there are clear guidelines. We urge regulators to create safe rules to protect consumers but allow the industry to continue to grow… Should regulation make it for difficult for DeFi companies to operate, you will see them move to areas of the world that want innovation.”

So to summarise, one of the key findings of the white paper is that DeFi services, whilst incredible powerful and disruptive to traditional FinTech and Finance, are currently difficult to use and many services have not yet reached good levels of usability. To address these issues Pluto, has recently launched a major DeFi platform called YOP, which is focused on making DeFi easy to use. I believe that YOP will be a major contribution to the crypto community, as although crypto and DeFi is an area with potentially endless possibilities, I agree with the white paper’s findings that the subject can be incredibly tough to get to grips with for newcomers. Typically, most find there is a high barrier to entry and a steep learning curve to access most of the existing DeFi protocols. As a result, I can’t wait for the MBA team and the community to try YOP out and provide feedback.

This paper starts with the question — is DeFi an unstoppable wave? The answer is a resounding yes! I agree and believe that DeFi is going, over time, to revolutionize and disrupt traditional finance. I hope that this paper will serve as a great introduction to the DeFi sector for newcomers.

You can read DeFi: An Unstoppable Wave here.

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Barry Downes

Barry Downes

Co-founder & Managing Partner Sure Valley Ventures (VC). Previously co-founder Pluto Digital PLC (DeFi & Metaverse) and founder FeedHenry, sold to Red Hat