What’s next for DeFi?
2024 and beyond
Who are the users of DeFi Applications? What is their motivation behind using the protocols?
- The “Degen”
- The “Whale”
- The “Guppy” — somewhere in-between the aforementioned
All of their motivations are to make a lot of money however there are differences in what they’ll use that money for. Apart from the scammers, all of their financial goals range from understandable and reasonable goals such as “property, education for my child(ren), a vehicle perhaps, wedding perchance, retirement, etc” to ostentatious goals such as “luxury goods and services, building a business empire, superfluous experiences such as indulgences that satisfy carnal desires et al, etc.”
All of their motivations range of conviction for “Why Web3” — ranging from “I don’t give a hoot about decentralization, I only care to make as much money as possible and therefore see crypto as simply another asset class” all the way to “I wholly believe in this technology as the future of the internet, economics, and human civilization altogether and therefore my investment in crypto is more of a statement in this conviction as well as an investment and thus care to even work in this space and contribute to its security by being a staking validator, etc”.
All of their motivations finally stem from a collective distrust in the world of centralized or traditional finance which is inherited from cultural touchstones such as the “Occupy Wallstreet” movement. This along with the Memestock Rally and rise of Consumer/Retail investors thanks to fintech solutions like Robinhood and neobanks — we are seeing an overall awakening in class-consciousness among the masses.
What are your use cases of DeFi?
- Environment — the world of ReFi as it intersects with DeFi have a bunch of use cases I love such as the Agrifinancing ones like EthicHub, the UBI solutions like GoodDollar, and the Public Goods kinds like Solarpunk.Earth.
- Economics — the world of socialism as it intersects with DeFi have has use cases such as Crypto-based Mutual Aid are attractive to me. Seeing people pool crypto together as a means to collectively govern themselves for the common good very much so adheres to the ethos of Web3. The books “Platform Socialism” and “Blockchain Radicals” go into this way more than I can right now.
- Entertainment — the world of storytelling in general in which multimedia IP creation, management, and dissemination is a fantastic Web3 use case in which the world of Gamefi can intersect. i.e. Story Protocol combined with a decentralized gaming economy
What needs to happen for further mainstream adoption?
We need to define “mainstream adoption” properly.
For me, there are 3 broad routes we can go down and it depends on various factors.
Broadly-speaking, there are both bottom-up and top-down processes that would be required for “mainstream adoption”.
- Top-Down: this would require a full reset on the whole economic system in which I would argue would be predicated by a Socialist revolution and therefore pave the way for a new economic system to be created, one that is governed collectively of, by, from, and for the people in a Socialist Technocratic fashion. Watch this video to get a sense of why I say this:
- Bottom-Up: this would require the technological/software monopolies and oligopolies to break apart and give rise to a decentralized landscape of software organizations that take the form of public goods in and of themselves in which open-source is no longer nonprofit but true Social Entrepreneurship of People + Profit + Planet is adhered to. This would mean however mean an upturning of the plutocratic government we have in the Western World which props up these oligopolies. And if this upturning cannot happen internally then it might have to happen externally. The only way for this to happen internally is to elect officials that understand the technology well enough to be able to transform it from within. However, there’s a huge lack of these kinds of people such as Andrew Yang in the West. Otherwise — I don’t believe the kind of adoption we’ll get is true-to-form or what I mean by that is one that is faithful to the ethos of Web3. Capitalism and Web3 don’t go well togehter, they mix as well as water & mollases.
- Mixture of Bottom-Up and Top-Down: the only other way I can see the world of Web3-powered eco-villages becoming the future of Web3 in and of itself. So organizations like CabinDAO, Cohere, CityDAO, etc are paving the way for a future where people are leaving the centralized world by moving to these offgrid eco-villages that are Web3-powered with crypto-rails and blockchain-identity systems. If these villages continue to attract more and more people, they may in turn grow to become eco-cities and thus force the governments to either comply or fight back. If governments clamp down, then we may have to resort to the earlier mentioned top-down process of a Socialist revolution.
