Is DeFi capable of banking the unbanked? What is the future of DeFi? While DeFi has seen significant developments in the reshaping financial system, there hasn’t been much talk about progress on financial inclusion.
Bitcoin advocate Andreas Antonopoulos in a recent podcast shared his thoughts on DeFi. He was of the opinion that DeFi was still in the infancy stage and it needed time to prove its potential. He stated,
“I think DeFi is more about making broader availability of financial services- removing intermediaries and gatekeepers that traditionally have been barriers to economic inclusion. But let’s be honest, at the moment, DeFi requires a lot of understanding. The technology is still immature, prone to problems, risks, security bugs and the user interfaces for using DeFi are not yet mature.”
He asserted that DeFi’s vision was not unachievable but it would take a decade for polishing and maturing interfaces, broadening access, increasing liquidity, reducing volatility, improving the underlying security of the smart contracts, and building more robust infrastructure so that it can be more broadly applied.
The same applies to most cryptocurrencies. Many of them are in the initial phase and might need more time to prove their worth. Interestingly, the debate on if Bitcoin is still in the initial phase also made waves during the March market crash.
DeFi has managed to grow despite the overall bearish year for the majority of crypto assets in 2019. It is speculated that DeFi’s high ROI and its negative interest rate could prove to be a good catalyst for crypto adoption. Commenting on the same, Antonopoulos further stated,
“The negative interests and negative interest rates- they’re good for cryptocurrencies, they’re good for the entire space; negative interest rates are fundamentally an imposition of attacks on savers by a central bank trying to fill in a massive monetization gap created by excessive stimulus and excessive debt.”