When I first heard about Bitcoin I was too dumb to understand how far it will go beyond a "mere" decentralized digital currency. When I learned more about it a few years later I thought I understood what it is aiming to become but I wasn't even close.
I needed to see what Ethereum could do to fully appreciate the science behind this modern alchemy and man, was I blown away.
Mattheus van Helmont - Alchemist
When In Doubt Zoom Out
Since we are currently going through turbulent times in crypto, let's take one of the oldest pieces of advice and put it into practice. This time don't zoom out on the chart, zoom out on the crypto industry as a whole. Is it not a miraculous sight?
There is no better way to explain DeFi than to compare it to the tales of alchemists and their attempts to turn cheap metals into gold. What we couldn't do in the physical world is now possible on the blockchain, and there are no gatekeepers. Anyone that wants to join can join but ignorance is a major hurdle.
All of these people that we keep blaming for not understanding crypto have been scammed way too many times in their lifetime. Why would your new invention be any different? It's like explaining video games to someone who never saw a TV in their life.
Before they understand what money actually is they won't be able to understand how DeFi can make it change aggregate states.
And while the lazy people keep calling you delusional for sticking around, let me remind you of all the revolutions that happened in just a few years.
A Monetary Renaissance
Ever since DeFi became a thing it leveled the playing field.
Everyone that criticized Wall Street for rigging the stock market now has no excuse for their complaints. A new playground is built from the ground up and there are no rules, only the ones executed by code that is readable by anyone at any given time. If you are comfortable with that, you can join the digital Wall Street whenever you feel like it and not a single person on in the world will have an issue with that.
As I said, most of us had no idea where this is going but ever since Uniswap showed people how they themselves can become market makers in just a few clicks the game changed completely. Shortly after that, lending protocols started unlocking the power of collateralized loans, another tool many accused the rich of keeping for themselves. Another layer of value became unlocked worldwide and no one took a minute to appreciate what just happened.
People from developed countries may see this as just another DeFi tool but those that never had a chance to take out a collateralized loan in their life know exactly how big this moment was.
For example, if you don't have access to leverage trading, for whatever reason, but you want to long Bitcoin, you can put Bitcoin into a lending protocol, take out a loan in stablecoins, buy more Bitcoin, put it in the same protocol, take more stablecoins as a loan, buy more Bitcoin...
Repeat until satisfied with leverage.
From there we started experimenting with synthetic assets. Trading stocks on a blockchain is now a thing, but a vast majority of people in the world have no clue about it. What this means is that you can trade on the US stock market from any country in the world without asking anyone for permission. This was unimaginable just a few years ago but the alchemists found the formula and gave it to you for free.
Jump to the present and we have gone all the way to partial ownership. Right now you can become a partial owner of a perpetual exchange or some other business on the blockchain without asking anyone for permission, not even the people that built it.
I recently wrote about Tethys Finance so let's use it as an example here. They recently launched a GMX fork on Metis and if you stake Tethys tokens you get a share of the revenue generated by this DEX proportional to your stake.
The current market cap of Tethys is $3M. If you wanted to OWN 10% of this business for as long as you want it would cost you $300K. Buy that many Tethys tokens right now, stake them, and get 10% of the revenue it generates in perpetuity. Can the deal get any better?
Compared to the stock market, we are already lightyears ahead. If you "invest" in Tesla or Microsoft by purchasing shares of those companies you don't get to see what they are doing in real-time. You have to wait for quarterly and yearly reports and also trust them that everything they say is true.
If you own a business in crypto as in the example I mentioned above all you have to do is click on the dashboard and see for yourself. How many users does the dapp have? Is there any volume? Are these users making or losing money? All of this data is there for anyone to see, 24/7 and again, without asking anyone for permission...
And what's the best part? If you own any amount of tokens you get to vote on the future development of these platforms and dapps.
This is the freedom everyone was asking for. The game you deemed as rigged is now forked to a completely new reality. We took what works and removed what doesn't. The suits, the billionaires, the thieves, and "those behind the curtains" all have one thing in common now - they have to play by the same rules as everyone else.
And if you think they will just shut this whole game down because they can't control it I have to ask you one simple question - after using crypto for as long as you have used it, would you ever want us all to go back to "how things were"? The genie is out of the bottle and as long as there is some use case for a cryptocurrency someone will be willing to sell it, and someone will be willing to buy it.
Everything That Can Be Tokenized Will Be Tokenized
The progress crypto and DeFi have made so far is undoubtedly impressive but we didn't even scratch the surface. The tokenization of everything is an inevitability. People may keep debating whether it will happen or not but their opinions matter very little right now. We already reached a point where everyone can create their own currency and currencies will continue to be created left and right.
If you can back your token up with any kind of tangible value there will be someone out there willing to invest.
It may sound like fiction right now but one day in the near future you will be able to tokenize your house, deposit that token into a lending protocol and take out a loan. No questions asked.
Instead of crowdfunding ideas, we will start investing in people. Don't be surprised if someone offers you to buy 10% of their income for the next year at a discount for some cash upfront.
The age of abundance is already here but most of the world needs some talking head on TV to tell them that. Sit tight because that may take a while.
Wen Adoption?
If you are still reading all of this and thinking that we need massive adoption before any of this becomes a reality I, would have to politely disagree. Crypto is a completely different beast. It is free to play with, and if there is a need for some kind of financial tool there will be someone willing to build it.
Adoption is already moving at the fastest possible pace. Two years ago we saw people pay hundreds of dollars in ETH fees just to mint a picture of a funny animal. How high do fees have to go and how cloged up should our blockchains be until we say that we are at a reasonable adoption level?
The technology is already used in every corner of the world, it is changing lives on a daily basis and providing opportunities like never before.
Those that need crypto will find crypto and understand its value immediately. Others... They may need a bit more time.