The Financial World Does Not Know What Is Going To Hit Them

How long does it take before people to realize a tsunami is brewing? The water is stirring long before the waves are causing catastrophic damage. When the 40 footers are bearing down upon one, it is way too late.

This is the situation that is brewing with the financial system yet few realize it. Decentralized Finance is becoming a major force, although that is not truly evident at this moment. However, a few simple projections and we can see how powerful this truly is. In fact, we are aligning ourselves for a complete paradigm shift.

The reason this is likely is because DeFi, Mark Cuban aside, is a much better system than we have now.


Source

Over the last 18 months, the industry saw incredible growth. Of course, this is just the beginning. Eventually we are going to see most every community offering DeFi services to their members. The code is available to anyone and that will cause replication as more structure is put in place.

DeFi allows anyone in the world to lend or borrow blockchain assets. It is done using simple downloadable wallets and can be done 24/7/365. The DeFi world never closes. At the same time, we are seeing the infrastructure being put in place to host more advanced financial activities. People are going to be able to invest in synthetic assets, engage in leverage trades, bet on futures, underwrite insurance, and become an automated market maker.

Obviously, we can see the opportunities that are available to individuals expanding rapidly.

The financial collapse in 2008 taught us something very valuable. While many talk about the importance of privacy, it can open up systemic risk. Since the banks were actually leveraging to a much greater degree than anyone realized, we saw the entire economy turned upside down. The fact that nobody was truly aware what the financial sector was up to resulted in losses of trillions of dollars.

DeFi is transparent, bringing a degree of safety to the entire economic system. Ironic when there are calls for regulation considering the fact that regulation (or regulators) did not work last time.

Another problem exposed, especially with AIG, was the fact that counter-party risk opened seemingly safe investments to a great deal of risk. Insurance is only as good as the party that is providing it. If that entity goes down, then the insurance policy is worthless. This is what the holders of billions in CDOs found out.

DeFi has no counterparty risk. All transactions occur based upon the code established in the smart contract. This means that not only is it transparent but is also executed based upon code and not individuals. This, according to many, is a step in the right direction.

We are literally watching the concept of "out with the old, in with the new". While it is not complete, this is the path that is being taken.


Source

Think for a moment about Bitcoin. It took a little over a decade to go from nothing to a trillion dollar asset. Here we see the march is not likely done as the role of "digital gold" is just getting started. However, it is not outrageous to think that this asset class, which was worth near nothing a decade ago, could rival a $10 trillion market. With the demographic shifts that are taking place, it is likely that Bitcoin is embraced by many Millennials as their "gold play". In fact, there are now publicly traded companies that are holding Bitcoin on their balance sheet. Who would have thought that circa 2013?

It looks like DeFi unfolding in a similar manner. Those who dismiss it do so at their own risk. We are already seeing trillions in settlements taking place each year, an amount that is only going to grow. The industry is working on some of its challenges at the moment which are hindering the growth. Ease of onboarding and scaling are two areas that jump out. When these two are resolved, we could see a massive explosion in this arena.

DeFi is not going away. This is something that will be available to anyone going forward. As much as the traditional segment wants to control things, the horse has already left the barn. What we need to do now is ensure decentralization.

There are a lot of advantages to DeFi. We do run the risk, however, of opening up the door for issues by building mostly on centralized chains that appear to be decentralized but are not. In the quest for lower fees and faster transactions, we are sacrificing decentralization. This could allow the major financial players to step in and replicate.

DeFi must be decentralized. If it is not, the entire structure is apt to be hijacked. Just like Bitcoin is starting to be taken over by the major money players, DeFi could head down the same path. One of the larger banks could set up a "DeFi platform" that is fully under their control and simply appears to be DeFi.

We must prepare for the day when some of the traditional players will be involved. All are not going to be eliminated. The banking sector consolidated over the last few decades, resulting in a few major entities who swallowed up a lot of their rivals. These companies are likely going to keep this up and expand into other areas. Certainly, there will be ones that disappear, just like happened with the newspapers. However, the ones that survive will do so through adaptation.

That said, most of the industry does not realize what is about to happen.

image.png
Source

It will not be long before all kinds of stuff is being traded on DeFi platforms. Concert tickets, stocks, futures contracts, collectibles, and even socks (anyone have any Unisocks?) are going to be available on these platforms. People will be able engage in these markets anytime they like.

The key will be where the liquidity is located. As more digital assets are produced, we see the opportunity for value to result. This is stimulated by the network effect. It is essentially what will skyrocket the entire DeFi market.

As more people get involved, the value of the existing assets increases. This creates more value to play with, serving as the basis for the entire ecosystem. Over time, to satisfy these people, more assets are developed. This, too, adds to the value basis. Of course, the entire process only serves to attract more individuals, sending the process on an upward spiral.

Another element we see is the attraction of thousands of developers and software engineers. As things keep growing, they are alerted to the potential and join the fray. Here we see the development accelerated as more code is being typed out each day. Hence, it all becomes a circular system moving in an upward direction.

It is vital that anyone involved in cryptocurrency start to explore the different DeFi offerings. This is a financial structure that will become a part of our everyday lives. Just like with cryptocurrency, it is better to learn about it early. Those that do so will be in a better position than those who come at a later date.

There is a lot of noise around cryptocurrency and DeFi. Do not buy into it. This is moving forward. The number of people involved dwarfs the total involved in governments around the world. The technological advancement that we will see over the next few years is going to really alter the financial landscape.

Cryptocurrency was a joke to many not too long ago. Now it is worth more than a trillion dollars. What was once novel is becoming a legitimate player on the global stage.

DeFi is going to be a major part of this. Those involved in it grasp this concept. It is something the establishment is struggling to figure out.


If you found this article informative, please give an upvote and rehive.

gif by @doze

screen_vision2025_1.png

logo by @st8z

Posted Using LeoFinance Beta



0
0
0.000
55 comments
avatar

The Mark Cuban shit yesterday had me dying - just goes to show that ANYONE can become victim to bad actors in the cryptosphere.

Nevertheless, I agree that DeFi is HERE TO STAY. No FUD, no FOMO, just active participation.

0
0
0.000
avatar

The whole financial world is a shitshow, where everyone is a victim. Everyone is in a load of shit. The poor people (like me) are in a deeper shit, as if it would cover our bodies up to our necks. Luckily there are no waves (yet?).

Have some !PIZZA.

0
0
0.000
avatar

100% agree. We have to do everything in our power to forge our own destinies, and to (legally) avoid as much tax liability and government overreach as much as humanly possible.

This is where blockchain comes into play - at least in terms of being in true control of your finances.

P.S. NOM NOM NOM! Thanks for the pizza, fwendo <3

0
0
0.000
avatar

That is true. People need to be cautious. Those that just in believing all will be well are apt to get taken.

Of course it is no different in the traditional realm. A lot of vultures there too.

Posted Using LeoFinance Beta

0
0
0.000
avatar

pixresteemer_incognito_angel_mini.png
Bang, I did it again... I just rehived your post!
Week 61 of my contest just started...you can now check the winners of the previous week!
12

0
0
0.000
avatar

Thanks for sharing. For me i think is high time we enlighten the people on financial diversification and making them to know the importance of investing in crypto currency.


Posted via proofofbrain.io

0
0
0.000
avatar

It is really a whole new world. Every time I spend some time planning my future on DeFi I can't help but think it looks too good to be true but guess what, it is too good and it is true.

It's going to change many lives

Posted Using LeoFinance Beta

0
0
0.000
avatar

What looks too good to be true?

Posted Using LeoFinance Beta

0
0
0.000
avatar

The possibilities to change my life that are more accessible than ever

Posted Using LeoFinance Beta

0
0
0.000
avatar

Ah okay. Yes it is. The thing is that this was always part of the traditional financial realm, just most of us were excluded from it.

With DeFi, we now have the potential to change our financial lives and in a big way. Wait until we completely revamp the VC market and we have opportunities are huge payoffs there.

Posted Using LeoFinance Beta

0
0
0.000
avatar

people invest in people.

Every successful investor knows it. And we will see builders like Elon musk, jeff bezos, jack ma and so on in the crypto world.

With really good running and Trustful dapps.

What does it need? Sure a trustful social layer hive offers :) So I see the way from Finance 1.0 to finance 2.0.

And I also think hive can a bigger role in it we all, even the most bullish expectations if the tools are here to build :).

It will never work if a government raises taxes and also print money to oblivion + low-interest rates.

It is like the biggest Ponzi we ever saw.

There was a reason for the gold standard. In the past, in a case of a war, the government sold war bonds to the citizens to finance it. Same on other worst-case scenarios.

Today it is very very very different. Print is the same as taking away.

0
0
0.000
avatar

That is true and it is going to take on even more importance in the future years. Reputation is going to be something that people judge before making a decision. That is why it is important to get things built now and start getting a track record.

Posted Using LeoFinance Beta

0
0
0.000
avatar

True words ... or, in other words ... facts, facts, facts.

Early adopters are the ones who get most of the benefits, and they deserve it too, because of the risks they take by getting involved (financially) in them.

Increasing DeFi scams are shaking the confidence of users/investors, though, specially of the newbies.

Rest, there is no argument what you have said here.

Posted Using LeoFinance Beta

0
0
0.000
avatar

Increasing DeFi scams are shaking the confidence of users/investors, though, specially of the newbies.

That is true. It is also an opportunity for a Cubfinance, a platform that can show longevity through the Leofinance development over the last few years.

Posted Using LeoFinance Beta

0
0
0.000
avatar

A big fat AGREED.

CubFinance is among the DeFi platforms which are not only keeping the ship afloat but also making it happening what you have told in this post.

Posted Using LeoFinance Beta

0
0
0.000
avatar

It introduced a lot of us to DeFi, helping to expand the potential of the entire community. Many are starting to get a nice flow of funds from there.

Hopefully the expansion keeps going. We need all the help we can get.

Posted Using LeoFinance Beta

0
0
0.000
avatar

I've concluded that a lot of people who meddle with crypto currency don't regard the decentralized part of it high enough, and I understand why.

DeFi must be decentralized. If it is not, the entire structure is apt to be hijacked. Just like Bitcoin is starting to be taken over by the major money players, DeFi could head down the same path. One of the larger banks could set up a "DeFi platform" that is fully under their control and simply appears to be DeFi.

This is ultimately true, you took the words straight out of my head. This is why im so bullish on Thorchain, it is the only defi platform that deals with Native tokens(unwrapped) is actually decentralized to a far more extent than other defi platforms we have, and has impermanent loss protection and also has excellent tokenomics.

One of our strengths on hive is also the decentralization, it's only a matter of time before we begin to see hives true potential as it will be one of the few unfuckwithable (in theycallmedans words) chains in the entire sphere.

For me I see this tsunami as clear as day...i don't know about anybody else

Posted Using LeoFinance Beta

0
0
0.000
avatar

There are a lot of projects that are in the development that can really springboard DeFi and decentralization forward. Hopefully we see them emerging over the next couple of years with a lot of applications. That will really tilt things in a different direction.

Posted Using LeoFinance Beta

0
0
0.000
avatar

Whenever disruption to the current system happens, there will definitely be a lot of noise around the industry. At least from the way I see things, I don't think people want the risk of centralized organizations. So having a more transparent way of doing things make sense for things that do not need to be hidden. I see a need of both of these so I don't think crypto is going away and the technology people can build on it is pretty amazing.

Posted Using LeoFinance Beta

0
0
0.000
avatar

The disruption is happening. It is evolutionary. We are seeing things shift slowly. Each time DeFi gets more into it, it just makes it more powerful.

There is the demographic shift that is needed.

Posted Using LeoFinance Beta

0
0
0.000
avatar

It think it’s time for people to realize that crypto and the legacy system are two different entities. Many in the media like to confuse people into believing they are one in the same. They are not. One has already collapsed via endless debt obligations. While the other is just gaining traction. Hopefully people can differentiate between the two.


Posted via proofofbrain.io

0
0
0.000
avatar

I would disagree. There are going to be aspects of the traditional system that are involved in what is being constructed now. Just like the Internet did not eliminate all of newspaper.

The banking system is in trouble but there will be ones that do adapt. We have a lot of people who will simply go through than as opposed to dealing with the newer applications. This is likely going to be a demographic situation. The MIllennials will be the ones leading the charge into the later.

Posted Using LeoFinance Beta

0
0
0.000
avatar

What I mean by difference is causality. Now the legacy system won’t disappear entirely since it is the true vampire squid.👾 However, people tend to panic in crypto based on certain central banking operations. Yet, aside from fiat on/off ramps the blockchain has limited causality to the legacy system. Blockchain was created as a safe haven by design. CNBC is notorious for confusing investors. Now if certain blockchain companies get discount window access then we will have causality. My hope that in the next few years the vampire squid doesn’t try to bring blockchain down with it.

0
0
0.000
avatar

My hope that in the next few years the vampire squid doesn’t try to bring blockchain down with it.

My guess is they roll in and take over what they can. They will be frontends for many services since people still trust the banks. They might end up being the players on a chain like Ethereum. After all, when you are spinning around millions, who cares if they ever get the transaction fees right?

The other things we are developing is where the true change will come in. That is why I am optimistic about Leofinance. It is starting to build a brand.

Posted Using LeoFinance Beta

0
0
0.000
avatar

This is so true and DeFi will definitely shape the future

0
0
0.000
avatar

"The financial collapse in 2008 taught us something very valuable."

Interesting comment. Many, many people saw the bubble bursting even before 2008. Many people did learn from 2008, but, knowing something and changing your behavior to change it are two different things. Knowing something and changing the behavior of your government and financial systems is almost impossible. That change comes after a revolution.

Posted Using LeoFinance Beta

0
0
0.000
avatar

Yes many were on the sidelines but even if they were, in a round about way, they often got whacked.

Certainly we see governments and bankers still doing the same thing. There were valuable lessons some of which were learned. The banks are only recently getting some of their freedom back which will likely lead to another implosion.

A leopard, in the case the bankers, do not change their spots. Crooks are going to be crooked.

Posted Using LeoFinance Beta

0
0
0.000
avatar

I laugh sometimes when i tell my friends i'm into crypto all they have to say its another scam a ponzi scheme 😆 although i always try to educate them on what crypto is. DeFi for sure is here to stay.

0
0
0.000
avatar

I have a feeling you will be the one laughing in a few years when they are in it and you are a major bag holder.

People will get involved sooner or later; for most it will be later.

Posted Using LeoFinance Beta

0
0
0.000
avatar

Yes indeed, crypto and smart contracts will replace central banks as the lender of last resort. The blockchain is a bank with all the open distributed ledger technology in my opinion.

Binance Smart Chain apparently had some crashes this past week, so there are still loopholes in the system. It's not prefect yet. Loads of customers want a class action law suit against them.

NFTs are also a good platform for concert tickets and collectibles if DeFi loses ground, but this is still the early days of blockchain innovation.

Posted Using LeoFinance Beta

0
0
0.000
avatar

BSC is centralized so they are opening themselves up to issues. It is also putting the entire DeFi space at risk.

Sadly, for now, it is where the action is. We desperately need things to evolve and branch out.

The HBD interest is a nice addition. Hopefully we can get the peg right and start taking Hive to another level in terms of the DeFi that exists on here.

Posted Using LeoFinance Beta

0
0
0.000
avatar

The best argument for Defi is that it's advancing at the speed of light compared to traditional finance. Even if it's still in early stages, and there are still loopholes being exploited as well as the ignorance of some of the participants in this new space, those will find a fix way faster than traditional finance takes to grasp what hit them and how was it possible, since they thought they controlled the world.

Posted Using LeoFinance Beta

0
0
0.000
avatar

It is easier to advance at the speed of light in the early stages. Quantum computing is on the same path since it is also in the embryotic stage yet it is still a decade away from much that will be applicable in the real world usecase.

That said, we need to keep growing and spreading things out. The more we have in different areas, the better it is.

As stated in another comment, the addition to interest for HBD is a great addition. Now any money held in savings (post HF) is DeFi monies.

We just need to keep expanding it on Hive.

Posted Using LeoFinance Beta

0
0
0.000
avatar

As stated in another comment, the addition to interest for HBD is a great addition. Now any money held in savings (post HF) is DeFi monies.

And that's low risk Defi, because there isn't the possibility of a rug pull and we are talking about a stable-ish coin.

Posted Using LeoFinance Beta

0
0
0.000
avatar

Awesome write up as always sir! Reblogging for https://coin-logic.com front feed! DEFI is here to stay for sure, but it is extremely important to do your research so that rug doesn't get pulled. We are all into CubFinance here at the Coin Logic crypto desk as far as DEFI is concerned. We do need a real good lending/borrow platform on BSC though. Hoping that gets added to CUB at some point, until then Nexo.io serves that purpose very well for me, although it is CEFI.

It's to the point that I am not sure why we are still in stocks and ETFs at all, I mean, I guess a little diversification helps, haha.

Posted Using LeoFinance Beta

0
0
0.000
avatar

There will be a lot of folks who will never learn the lessons of 2008.

Posted Using LeoFinance Beta

0
0
0.000
avatar

Yep. And they were the same ones who didnt learn the lesson of the dotcom bubble either.

In fact we see many of them on crypto Twitter whining about the same things.

Posted Using LeoFinance Beta

0
0
0.000
avatar

Without a doubt, DeFi will change the landscape of how we handle money... whether it's going to be an actual tsunami or just a gradually rising tide that drowns those who are not prepared to get onboard? That remains to be seen.

PayPal was deeply mistrusted when it first came to market. How can you have peer-to-peer money transfers without a bank to "trust" as an intermediary? "Must be" a scam and a ripoff... remember that?

I think banks will still exist, but the scope of what they do will completely change — eventually — to become more like "financial services aggregators" or something along those lines. And I don't see fiat currency going away until the cryptosphere solves its volatility issues. Nobody wants to sell a product today, only to discover that the buying power they just earned is worth 1/4 that tomorrow.

=^..^=


Posted via proofofbrain.io

0
0
0.000
avatar

They will have a foothold since the older generations are not going to jump right into applications and peer-to-peer finance. So the banks will have the front end (due to their name) and the customer service to hold people's hands.

Over time, that will dwindle as ease of use increases and people become more technically advanced.

Banks customers will be like the nightly news: growing older by the day before dying off.

Posted Using LeoFinance Beta

0
0
0.000
avatar

The fact that there is transparency and decentralisation, there is likely going to be a serious shift.
Although I think there is going to be a serious fight with the government

Posted Using LeoFinance Beta

0
0
0.000
avatar

Although I think there is going to be a serious fight with the government

No doubt there will be battles there. Government doesnt realize that the Internet came into their world either.

Once we start innovating and experimenting with different governance models, we are going to see the government structures we now know under pressure.

Posted Using LeoFinance Beta

0
0
0.000
avatar

i guess they will most definitely yield under such pressure.. however this looks like a very long time.

Posted Using LeoFinance Beta

0
0
0.000
avatar

Also think DeFi will alter the future for the better. That wouldn't happen easily as there will be fight with several institutions and the government. One thing is for sure, true cryptocurrency and decentralization will prevail


Posted via proofofbrain.io

0
0
0.000
avatar

We are in a DeFi era, this is the time to show the world the great deal of work that crypto has to offer. Am just excited to have a variety of coins on a single secure platform, thanks to the wallet application from https://atomicwallet.io/.

0
0
0.000
avatar

This is a massive swing shift in the financial industry and the longer people and companies ignore it the more established it becomes. I noticed an article that some of he investing giants are looking at defi more seriously as it is on their shopping list.

Posted Using LeoFinance Beta

0
0
0.000
avatar

That is why it is good for a person to invest on himself or herself first in order to be a better person and have a good reputation which they can now take into the financial world and get the desired success...


Posted via proofofbrain.io

0
0
0.000
avatar

To me, DeFi symbolizes equality in finance for all in the world.

0
0
0.000