Solving a Broken Money System: How DeFi is Changing the Game

Published in
8 min readOct 4, 2021


A “Normal Friday”

On a normal Friday, millions of people across the globe have money from their paycheck deposited into their bank accounts. Most people take that money and use it over the month to pay their bills, buy groceries, and make other needed purchases. If they have some money left, they save it. It all sounds simple and effective, saving what they have left to make sure their future selves (and their families) have more money.

Generally, when people save their money, they either put it in an investment account or an old fashioned bank savings account. If the investment account or savings account is at a different financial institution than where their paycheck is deposited, those funds will usually get transferred via ACH (automated clearing house). ACH can take up to three days to transfer plus the receiving institution may place a hold on the funds once received to reduce fraud.

Even though it is a digital process, it is a slow process with multiple third parties involved, all adding time and costs along the way. At the end of the day, it is the consumer that bears the cost of having a system of middlemen facilitating the movement and storage of our money.

That cost appears in multiple ways. Bank fees to transfer money, limits on how much money you can transfer because the middlemen have to manage their risk, and the most impactful to consumers, low savings rates.

If you’re lucky, an investment account like an index fund will earn an average of 8% per year for your lifetime. But many people have little to zero funds in investment accounts. A savings account, on the other hand, doesn’t even “save” your money. Depending on the inflation rate in the country you live in, over time, the money in your savings account, on average earning less than 1% per year, will actually be worth less than it is today as its purchasing power decreases.

If you are using a bank account to “save” money, you are going backwards.

To make matters worse, for consumers to qualify to open a savings account, they essentially have to go through a background check known in banking as KYC or know-your-customer, handing over nearly all of their private data to their bank and any of the middlemen involved in the process. Certain regulations require this private data to be collected even though research has shown that anti-money laundering policy has less than 0.1% impact on criminal finances. And compliance costs exceed recovered criminal funds by more than a hundred times leaving banks, taxpayers and ordinary citizens penalized more than criminals.

A bank makes money by taking the savings deposits and lending those funds back out, sometimes lending 9 to 10 times what is actually deposited, and generating interest from borrowers. This is at much higher rates than the returns the bank pays on savings deposits though because the gains are eaten up by all the transaction and compliance costs already mentioned, the cost of banks having offices and branches, managers and tellers, legal and marketing expenses, and of course, bank profits. They’ve got to be generating dividends for bank shareholders too.

No wonder it’s difficult for the average person to grow their savings at a bank.

Another key point is that there are many more people across the world that don’t have the data identities to pass the background check to open a bank account in the first place, or that live in communities considered “not profitable” enough to be serviced by banks. Recent estimates are that 1.6 billion people are unbanked or underbanked and that this financial exclusion has a significant impact on both individual wellbeing and national economic growth and development.

Add all these challenges together, and you have a broken money system.

So when the next “normal Friday” rolls around and you see your paycheck hit your bank account, assuming you have a bank account, you may start to think how things are not that simple nor effective.

But is there a better way?

We think so and so do a lot of smart people like Ryan Sean Adams of Bankless and Chris Burniske of Placeholder VC who are also talking about how decentralized finance (DeFi) can be a solution for the deep underlying challenges with the money system.

SyncDAO is using the tools of DeFi to help design a new money system that puts your money to work for you and eliminates so many of the old blocks and inconsistencies.

The Old vs The New

Let’s cut the banks some slack. Banks today are not the real problem. The real problem is the system as a whole, which we’ll call traditional finance (TradFi), that is made up of decades-old business models, built on decades-old technologies. The banks are playing by the old system’s rules. Rules that have no transparency, no accountability, and require the customer to simply “trust” the bank’s process for handling money.

With cryptocurrency and blockchain technologies, new systems are emerging; new financial products, services and organizational forms are being created. This is what makes DeFi such a powerful solution.

With blockchain-powered DeFi, we can have systems that are secure, verifiable, transparent and within the control of individual customers. DeFi systems are described as “trustless” as there is no central “trusted” authority or organization in control of funds, instead, the whole system of smart contracts and transaction verification can be seen by any user, at any time. The system itself is what creates trust, not any individual or developer.

At SyncDAO, we believe DeFi offers a new vision that with patience and persistence can transform our financial lives, and the fairness of financial opportunities and access to so many excluded by the old broken money system. DeFi is the end goal.

In between TradFi and DeFi lies centralized finance (CeFi). CeFi comprises the cryptocurrency firms that operate more like a bank, meaning firms that are run by a management team, conduct background checks on customers, and hold custody of customers’ funds. It’s like a “halfway” step towards DeFi in many ways, yet while CeFi offers some of the convenience and familiarity of the TradFi systems, with some use of digital assets and blockchain tools, it’s important to realise CeFi is a compromise on the full promise of DeFi and the new financial system that’s truly open and efficient for all.

To get a clearer picture, let’s look at a side-by-side comparison of some of the key differences in the three paradigms:

As you can see in DeFi — or the new system — there are fewer inefficiencies and less room for profit-taking from management and third parties. There is so much more opportunity for shared useability and fairer distribution of economic rewards.

At the same time, in DeFi, users need to remember that they are 100% in control of their money. Each user holds full custody of their funds, and in this way takes the responsibility for being their own bank. DeFi is rooted in the belief that self-responsibility is vital for a fair and open financial system.

Creating the New Financial System

As SyncDAO’s vision comes to life, a new system will begin to take hold. The new system will welcome anyone willing to take control of their money, choosing self-responsibility over placing trust, responsibility and control, in the hands of the corporations that make up the current traditional finance system. As a decentralized autonomous organization (DAO), SyncDAO will be controlled by its users and run on decentralized smart contracts, completely removing middlemen. Its members, the holders of the SyncDAO Governance token $SDG, will have control of the system.

The new system will introduce the concept of perpetual wealth which simply put is putting your money to work for you, forever. SyncDAO is building a system that gives you ongoing returns for simply depositing your money into a DeFi vault, what we call a Perpetual Vault. Think of it like a modern replacement for your bank savings account but instead of losing purchasing power as a result of inflation, you receive recurring interest payments for storing your money in SyncDAO’s DeFi vault. That’s why we call it “Forever Money”.

Through all of this, you don’t have to share your personal identity with SyncDAO, wait for approval to make a deposit or withdrawal, and you don’t have to hand over your financial life to the business needs of the banking system. Instead, by simply setting up a digital wallet and depositing crypto in a SyncDAO vault, you can control your financial life for years to come.

As we create this new financial system, SyncDAO has a role for everyone’s comfort level in DeFi. If you’re new, being a User is the way to go by simply depositing funds into the Perpetual Vault to earn interest payments. If you have some experience and want to help others learn about DeFi and use the new system, becoming an Affiliate will empower you to earn commissions in addition to earning returns on your deposits. And last, if you really want to take control, you can become a Governor by holding the SyncDAO Governance (SDG) token, giving you access to vote on the DeFi strategies used to generate secure, long-term returns. It’s up to you. You can play any (or all!) of the three roles in the new system.

See How the New System Works

If you’re ready to move on from the old financial system to a more open and fair way to manage your money, check out SyncDAO’s Perpetual Vault User Guide and get ready to make the switch. And when your next Friday paycheck comes in, you can be confident that the money you choose to deposit into SyncDAO will actually be put to work to pay your future self.

If you’d like to know more about SyncDAO you can check out the website at

You can join the conversation on one of our channels

Or check out more in-depth details about the project;

You can verify the token address on and on the official SyncDAO website