Why DeFi Is Scaling So Fast & Why Does It Matter?
The 2008 financial crisis was an eye-opener on how fragile our current financial system is and heavily reliant on banks and financial institutions that act as intermediaries in providing any financial service. Financial infrastructure has structurally not changed since the industrial revolution and it is similar to software in the pre-internet era. High entry barriers, opaque and inefficient processes and high transaction cost has resulted in limited innovation in core finance. In India, over 190 million adults don’t have bank accounts; merchants have to pay 2-3% on every card or online transaction; small businesses find it difficult to avail credit from banks and international wire transfer is expensive. Trades in capital markets are executed electronically yet the settlement period is T+2 days. While many fintech startups have emerged in the last decade, they are built on top of existing financial rails. The creation of financial products and services has always been a top-down proce...