DeFi: Unstoppable Explosive Financial Revolution? | by Henrique Centieiro | December 2022

Crypto adoption is growing very fast and platforms with very large user bases are implementing crypto infrastructure:

  • There are over 300 million crypto users online who already have a wallet to interact with DeFi applications
  • Instagram, Twitter, Reddit and other big players have launched their crypto wallets/apps to their large user base
  • DeFi user growth was 44% QoQ in 2022 (bear market) and exceeded 5 million users
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DeFi provides a fast track for innovation in ANY financial product:

  • DeFi is not a new asset. DeFi includes ALL asset classes. We currently have Lending, Bonds, Wealth Management, DEX, Insurance, Options and Derivatives all in DeFi!
  • DeFi is highly innovative and, instead of competing with each other (like traditional finance), DeFi applications cooperate thanks to DeFi’s composability.
  • Composability (Money Legos) offers incredibly fast development. Everything is open source and transparent, so developers can build on each other. This brings with it hyper-competition/collaboration.

DeFi is the financial market for Web3 and Metaverse:

  • As we inevitably move to Web3, users now have digital assets (a multi-billion dollar industry) to trade in DeFi
  • The gaming industry has slowly tokenized in-game assets as NFTs, and there are over 2 billion players worldwide. DeFi can unlock the liquidity of these assets.

DeFi is an asymmetric bet:

  • The odds of success and potential multiples when investing are clearly positive (no financial advice; DeFi is also super risky).
  • DeFi is fintech 2.0 on steroids. It’s a whole new financial infrastructure being built from the ground up. The market cap of DeFi is around $50 billion at the time of writing and the entire financial industry is $2.6 trillion. DeFi is still a drop in the bucket.

DeFi network effects offer unprecedented levels of connectivity and scalability:

  • DeFi smart contracts can interact with each other, automate payments, and interact with any tokenized asset.
  • All financial products can communicate/pay/collateralize with each other.
  • DeFi offers the ultimate in financial inclusion. All people need is an internet connection to access a plethora of financial services. DeFi is global, borderless and does not discriminate or censor.
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Source: DeFi Ecosystem Landscape Report 2022 – HashKey Capital
Source: 👾Build NFTs, Tokens and DAOs – Smart Contracts Masterclass