With so much being made of DeFi at the moment, and the growth of the space through 2020 alone astronomical, many are left wondering when the future of DeFi will permeate and offer mainstream solutions to traditional problems. However, there are also some looking into the DeFi space and seeing not progress, but rather destructive greed.
DeFi, like cryptocurrency, blockchain, and a number of other areas in this new nascent technology space, holds the potential to totally overhaul the traditional status quo of a number of sectors. However, it would be fair to say that even with the mass progress, we are still waiting to see when blockchain, or even crypto will take off and be our future.
YEt, people are also looking to DeFi and when its disruption of the traditional financial space will come to be — but this, it is fair to say, is a long way off.
Richard Byworth, CEO of digital finance company Diginex.
“I do believe that DeFi is the future potentially down the road,” Byworth said in an interview with Morgan Creek Digital co-founder Anthony Pompliano, posted on Sept. 18. “But it’s very early,” he added:
“It’s like trying to fly to the moon in a cardboard box — I mean, you’re going to get yourself into trouble along the way, and, you know, things are going to break and burn up, as we’ve already started to see.”
Part of the problem for DeFi and its race to be a viable solution to the financial space is that its early footing has been wrought with poor mechanics as there has been huge money grabs. Occurrences such as yield farming and the crazy show that was SushiSwap have shown that it is still a wild west out there in DeFi.
Much like ICOs promised to revolutionise the venture capitalism space, DeFi promised to change finance. But in both instances, their early charge was aimed at people making money, quick, and in many cases, with dubious means.
ICOs met their demise for this reason as the money they were attracting reached a fever pitch and forced regulators to step into the quagmire with no alternative than to essentially shut things down. DeFi is facing a similar path unless some sort of self regulation comes in or the focus is for good, not money making.
For the future
It may well be that while the financial space is in dire need of a shake up, and DeFi can provide that, today is not the day. Bitcoin came in under a cloud of speculative investment and also caused regulators to strike back, but the coin has rebounded and is starting to change attitudes about digital currency.
Perhaps DeFi will have its Icarus moment and fall back down to earth only to climb back better and stronger, with harder foundations.