There are many segments of the crypto industry that do not respect the decentralized finance (DeFi) ecosystem of Ethereum.
Referencing popular “money games” like Yam, Ampleforth, and others, these critics argue that these are just systems set up to allow insiders to slowly leech capital from retail buyers. Others say that this space is just a disaster waiting to happen, referencing how each protocol is connected with each other, compounding technological and economic risks.
But the chief executive of ShapeShift thinks that these critics may be missing the point. He recently stated that DeFi is the most cypherpunk thing going on in the cryptocurrency space.
Look past the yams and unicorns, DeFi is the “most cypherpunk thing happening in crypto”
Erik Voorhees, the long-time libertarian founder of crypto exchange Shapeshift, thinks that DeFi’s decentralized exchanges and decentralized money markets are the “most cypherpunk thing happening in crypto right now.”
“When u look past the yams, unicorns, and cute gardening references, you’ll discover that defi – decentralized exchanges and money markets in particular – are the most cypherpunk thing happening in crypto right now.”
He is specifically referencing how anyone can change between assets and obtain loans or provide capital to be borrowed all with the clicking of a few buttons, as opposed to the arduous process that traditional financial institutions would impose on their customers.
“Go try out Uniswap. Trade some ETH for DAI. More advanced: deposit either in a liquidity pool. Even more advanced: acquire some cDAI which earns interest. Notice the number of banks and identity checks involved. It’s magical.”
On top of all this, DeFi is emerging as a key segment of the Bitcoin and crypto revolution as fiat money is being debased, Voorhees explained, making it kind of perfect timing how this is playing out.
A booming industry
It seems that users are taking notice of the fundamental purpose and premise of DeFi.
Flipside Crypto reported on Oct. 13 that “$300 million worth of ETH and WETH are sent daily to decentralized finance applications and exchanges, versus $156 million to centralized ones.” That’s to say, DeFi is starting to overtake centralized crypto platforms due to the space finding a product-market fit.
Santiago R Santos, a partner at DeFi-centric crypto fund Parafi Capital, recently highlighted five other trends showing that this space is reaching “escape velocity.” These include but are not limited to MetaMask hitting one million monthly active users, the amount of circulating stablecoins passing $20 billion, and Ethereum scaling taking place.
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Source: ShapeShift CEO: DeFi, not Bitcoin, is the “most cypherpunk thing” in crypto