Your 2-Minute Guide to Decentralized Finance a.k.a DeFi, Singapore Fintech & Blockchain Week Takeaways
HashTalk with Sankalp Issue #11
Hi, I’m Sankalp Shangari. I’m exploring latest trends & my learnings and experiences in Startup & VC world and how upcoming technologies are reshaping the world as we know it, especially Blockchain & AI.
🔥 This Week’s Burning Topic
🧠 Thought Starters
😂 Just For Laugh Gags
📚 Best of the Best Articles
🎧 Best of the Best Podcasts
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Over the past few decades, we have seen the rise of many major industries primarily accelerated by the growth of computer systems. What humans have done in the past few decades is quite remarkable. We have been able to mould the world according to our needs to make our lives better. Whether that be in automobiles, social media, clean energy and other major industries. Why should money, the crux, the reason, the root of all innovation being done be left behind?
What is Decentralized Finance?
In simple terms, decentralized finance or DeFi is a type of financial system open to everyone, and aims to minimize our dependency on centralized authorities. Through technologies like blockchain, cryptography and internet it aims to give us a set of tools enabling us to collectively build a decentralized financial system without the need of central authorities. For the sake of comparison, imagine the building blocks of decentralized finance as LEGO bricks which become bigger and stronger when multiple bricks are joined with each other.
Why do we need DeFi?
There’s a very simple reason for it and that is, “Much of the power is centralized in finance”. Only a very small portion of people have a say in what ventures get funded and what don’t. Then again, the profits from these ventures is enjoyed by very few sitting at the top of the system. For instance, 50% of all the global VC funding goes to startups in U.S. Now imagine, what if the project/ventures which are really making the world a better place and are not just making the rich more richer gets funded.
What’s the promise of DeFi?
You own and control all of your assets. And that is the promise of DeFi. Though all the banks shout and market that you’ve complete control of your assets, it is hardly a case. In reality, you are dependent on the banks to control your assets. The promise of DeFi is to provide you, the user with the power to handle your assets your way fueled by decentralized blockchain technology. And since, most of the apps built on the promise of DeFi are open source, developers across the world can collaborate together and create faster, secure and easy financial products on the cusp of innovation.
Some Real World Applications of DeFi.
The various products involved in DeFi are referred to as open finance as it’s an ecosystem where blockchain tech, digital assets, open protocols are integrated with conventional financial structures through the use of internet. But, majority of these applications are “Incompletely Decentralized”.
For instance, Bitcoin decentralized the issuance and storage of money but not the access to the financial system. Below is the weekly crypto network stats from CoinMetrics, very informative as always.
What are the risks with DeFi?
It’s not like DeFi is a start all, end all solution for a more liberated banking and finance ecosystem. It has its fair share of risks associated with it which are getting solved one by one. One of the main drawback or you might say a necessity is that handling cryptocurrencies and finance tools require specialized knowledge, so of course, there’s a risk factor involved. Also, since blockchain and cryptocurrencies are still at a nascent stage, there are always risk associated with not having an enough secure system. The infamous DAO hack of 2016 is a proof of that.
What I feel is that, though the DeFi market is small, it has picked up its pace in recent years, and more specifically since last one year. I am very positive that with the advent of new and better solutions coming up the world will reach a genuine financial decentralization in which traditional finance works with decentralized assets smoothly.
Check this out for more DeFi ammunition & get going on latest tools - Just to get you started. You can hear more about DeFi, its future and how to make some DeFi Dough on HashTalk with Sankalp.
Buy Eth ENS domains - Claim yours here, an address like yourname.eth
Check Maker DAO in three days time - it’s going multi collateral
Opyn - creating options on DeFi & earn more interest now
Synthetix - Second biggest DeFi platform now (we love derivatives aka gambling)
Rent from RealIT property
Lend on Fulcrum (they have the coolest website I’ve seen so far)
Trade on Uniswap
and Insure on NEXUS mutual
We had the Singapore Blockchain week and SFF x SWITCH 2019 (Singapore Fintech Week), both together last week. By some estimates, 100,000 bodies transcended on Singapore. It didn’t seem like that at all. That is why we love Singapore so much, amazing preparation, coordination & ease of getting around. Makes you almost lazy. Here are some highlights:
On the Blockchain Side - CoinMarket Cap event The Capital was well attended and stole the show just because we had CZ everywhere with Selfies.
Blockshow on the other hand is getting worse every year. Sorry Cointelegraph
No major announcements, to be honest accept some cool parties by Biki, JetCoin, Bitmex et all
🧠 Thought Starters
🧵TWITTER THREAD OF THE WEEK
😂 JUST FOR LAUGH GAGS
TOP VOTED THOUGHT LAST WEEK
TOP VOTED GAG LAST WEEK
📚 Best of the Best Articles in Tech & Startups
Common Plots of Economic History - Collaborative Fund
Protocols As Minimally Extractive Coordinators - Chris Burniske
Bitcoin is Not Backed by Nothing - Parker Lewis
Taming the Mammoth: Why You Should Stop Caring What Other People Think - Tim Urban
The World Has Gone Mad and the System Is BrokenRay Dalio
🎧 Best of the Best Podcasts
Ep. #8: Alexandre Kech, CEO of Onchain Custodian - The Absolute Safe For Digital Asset Custody - Listen Here
Reduce Uncertainty and Increase Winning | Chris Cochella - Listen Here
Stephen Schwarzman: What It Takes [The Knowledge Project Ep. #69] - Listen Here
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Disclaimer: None of the content in this newsletter is meant to be financial advice. Please do your own due diligence before taking any action related to content within this article.