DeFi is Not Taking Over Anytime Soon But I am Sick of “it sucks but things have always been like this so I'm not going to do anything about it" and "here is a fake UX improvement but I didn't actually set things up to be better for the long term"

DeFi is Not Taking Over Anytime Soon But I am Sick of “it sucks but things have always been like this so I'm not going to do anything about it" and "here is a fake UX improvement but I didn't actually set things up to be better for the long term"



The bottleneck is always underlying infrastructure

• Building an abstraction on top is a great starting point but not enough

• We have so many fintech APIs now but the flow and speed of information is still choked by regulations

Find the difference between what actually has to exist vs what just has always exist

• It is fucking absurd that money is the common thread in all our lives yet regulators and banks think that what existed 100000 years ago is what needs to continue



Everything is just about managing risk.. and better UX

There is a balance to be achieved.

• securitization decades ago helped distribute and manage bank capital to create more efficient financial markets

Not saying I have a solution which is hypocritical but I am calling out the damn problem that we all are pretending we are fixing at light speed when it is really a turtle's pace



Key Trends Pushing for DeFi

• Cost of intermediation in financial systems is rising

• Mature markets have massive concentration in certain functions, choking smaller third parties

  • This is also because regulators are a bitch

• Increasing need to go global and be inclusive and be more remote friendly - DeFi is programmable

  • Increasing demand for transparency



Key Questions

• Opportunity for smaller market players to move to DeFi?

• Is DeFi reconstructing the actual underlying infrastructure enough?

  • Fintech mostly abstracted / redid the superficial top layer

• Is CBDC really going to work? Is it our best shot?



TL;DR

• Risk is not managed well enough yet

• Too many scams, banks not ready, poor mainstream use cases

• Infrastructure is WAY overdue for a revamp. The time will come just not tomorrow. Probably not for a decade to be honest.



defi beyond the hype - wharton may 2021