On Stepping To Decentralized Finance
By Nick Avramov on ALTCOIN MAGAZINE
“Philosophy is the art of forming, inventing, and fabricating concepts.”
Gilles Deleuze, Felix Guattari. (1991) What is Philosophy?
One time I will definitely start talking on philosophy and other humanitarian stuff here, though not today. The épigraphe I am putting now here in the very beginning of the article has tickled my mind for a couple of months when I first encountered a comparison between philosophy and marketing.
Indeed, there’s something in this power of concept creation that makes relatives out of these two spheres of.. I don’t really know what. It’s hard to attribute marketing to what I used to call a field of knowledge (as I truly believe it resembles much more a sort of know-how), but there might be a place, a certain space where this two sorts-of-something lays in the same row of enumeration.
What’s Decentralized Finance (DeFi)? Is it a way of contemplating a decentralization and how it can groundbreaking the very foundations of our economy, or just a mean to fool the one with some amount of money to put [the money] in your’s one or someone’s else pocket? Let’s examine.
According to a commonly spread definition, decentralized finance or DeFi is
the movement that leverages open source software and decentralized networks to transform traditional financial products into trustless and transparent protocols that operate without unnecessary intermediaries.
Effectively that means that DeFi reflects traditional financial tools built on a distributed ledger technology and blockchain (better not confusing these concepts). They are mostly open-source protocols or modular frameworks (like Hyperledger Fabric) that aim at creating and issuing digital forms of real-life assets, and which is more, tokenizing assets that previously wouldn’t be presented in a digital form.
Up to now, there is a great number of ways decentralized finance can emanate to the world. Here is what stands under a buzzword “decentralized finance”:
- Asset Management Tools
- Tokenization Protocols
- Decentralized Exchanges
- Stablecoins
- Derivative Protocols/Prediction Markets
- KYC/Identity Protocols
And indeed, many more of them.
In essence, by putting financial services on more reliable and advanced rails, DeFi empowers the financial system to become faster, cheaper, much more efficient and globally accessible. Some people describe DeFi as the Internet of Money — hopefully, I cannot afford that banality.
DeFi ≠ Fintech
Even though for a number of resemblances it might seem that DeFi means Fintech — congrats, you got served. For the purpose of nurturing those particularly curious, I took this image from Tobia De Angelis:
The basic thing you can find here is the following: o-p-e-n_s-o-u-r-c-e.
DeFi is essentially about building open-source software, whereas Fintech (you can put here a long list of N26, Revolut, Monzo, Tinkoff, etc.) are proprietary-based. There’s something beautiful in that surge for community-driven software development — I am not saying I would argue it’s better than corporate-based, but it really differs. And I believe it makes a great deal to the better world and much more accessible services for all of us.
That’s why I’ve decided to co-found DEFI AGENCY — the boutique marketing agency for financial startups, especially DeFi startups. I would be grateful if your expertise and passions lay in the approaching trajectory and you would decide to join us.
The opinion of the author may not coincide with his point of view.
For personal inquiries, please text in Telegram.
