- A former senior engineer at Coinbase shares tips for the DeFi industry against the traditional financial economies.
- According to him, the global e-commerce companies made $2.2 trillion in revenue last year, while NFT creators made only $3.9 billion.
- Functions of DeFi include the issuance of stablecoins, peer-to-peer or pooled lending, etc.
Blake West, a former senior engineer at Coinbase, shares tips he believes may put the decentralized financial (DeFi) industry at a better competitive edge against the traditional financial economies.
He did this via a 12-paragraph Twitter thread on June 9, 2022, in which he started by posing a question: “Want DeFi to grow 100x from here? The answer is to be boring!”
Firstly, he compared the revenue of the markets. According to him, the global e-commerce companies made $2.2 trillion in revenue last year, while the non-fungible token (NFT) revenue from creators was only $3.9 billion.
West argues that speculative activities in crypto, NFTs, gaming, or web3 social are great but would do the DeFi industry less good. He believes the DeFi industry needs to move away from speculations and into the boring everyday financial activities of the legacy industries.
He added that the DeFi industry would prove a strong adversary only when it solves financial problems more efficiently.
Ad spending did not only happen to “internet native” activities. It stole market share from TV, radio, newspapers, etc. because it offered a better way to solve the same problem. So the challenge in front of DeFi is the same faced by every other technology that has aimed to disrupt the status quo. It must solve the same old problems, but better.
According to Binance Academy, DeFi is the use of decentralized networks and open-source software to create financial services and products. The functions of DeFi include creating monetary banking services like the issuance of stablecoins, providing peer-to-peer or pooled lending and borrowing platforms, and enabling advanced financial instruments such as DEX, tokenization platforms, derivatives, etc.