Those who studied history will well remember the city-states of medieval Europe. Back then, caravans of merchants traveled from one city-state to another, bringing luxury goods and news from faraway places. It was this lifestyle that allowed these merchants freedom of mobility and choice. It is a very similar concept to the one described by Michael Ondaatje in his book The English Patient. The author imagined total freedom, without borders or nationalities that limit people in their struggle for development and progress.
Today, broader access to financial markets through decentralized finance marks the beginning of the open world. DeFi has been very positive from the point of view of wealth accumulation and cheaper financing, giving a new meaning to the concept of “finance for all”. By cutting out middlemen through the use of blockchain technology, DeFi expands the reach of financial transactions and significantly reduces their costs. It is evident that DeFi is the future of finance and other industries. The only question that remains is: How fast will we get there?
DeFi wrapped up in a year
It’s quite fascinating how, in just ten years, we’ve gone from the concept of Bitcoin (BTC) as a digital currency (and personal bank in a traditional sense) to Wrapped BTC, farming, and all the other crypto alchemy.
Essentially, there are several types of applications for DeFi, reflecting the depth of its integration and the range of its uses. Decentralized exchanges (DEXs) represent a large category of DeFi trading, offering cryptocurrency trading without authority. Stablecoins are tied to external assets, such as fiat currencies and precious metals. Lending platforms and prediction markets are also prevalent in the industry.
Related: What is shaping the future of the institutional crypto market?
Famously, DeFi enables yield farming and liquidity mining, offering a niche way to capitalize on crypto assets that have now gone mainstream.
Entire cities are now embracing the new paradigm and preparing to welcome crypto-savvy citizens. Seoul, for example, developed a strategy to become a world leader in blockchain technology in 2019. Its then mayor, Park Won-soon, presented the Promotion Plan for the Seoul Blockchain City, which would become the basis of the Fourth Industrial Revolution. Even before the presentation, several administrative services were already using blockchain technology in 2018. However, the new plan would expand the scope of the technology by including direct democracy, online verification, miles management through the issuance of S-Coin , Seoul citizen card. , and many others.
The proposed crypto city in Nevada represents another case. It is an experiment carried out by Jeffrey Berns, the cryptocurrency millionaire who bought a piece of land in the state of Nevada and decided to lay the foundations to build a city based entirely on blockchain. The initiative encountered opposition from the local government, which has become one of the main obstacles in the way of the creation of the new city. The decentralization element frightened politicians that they might lose control. However, the recent Congressional hearing on Web3 brings hope of reaching common ground on this issue.
Notably, Dubai launched its Dubai Blockchain Strategy initiative, becoming an important part of the United Arab Emirates Blockchain Strategy 2021, which seeks to migrate at least 50 percent of government transactions to the blockchain. The government saw an economic opportunity for positive transformation in its innovative approaches. Currently, Dubai attracts blockchain evangelists and digital nomads from all over the world.
Related: The Crypto Oasis: How the UAE Became the Digital Asset Champion of the Middle East
It has become clear that the failure of governments to realize the potential of DeFi and blockchain could cause economic lag in their respective countries. The launch of the central bank digital currency (CBDC) has become the main signal suggesting the move of governments towards the implementation of blockchain-based technology.
The Atlantic Council has developed a tool to track all countries in terms of the stages of their various CBDC projects. Note that Ukraine, China, Sweden, South Africa, Malaysia, Singapore, Thailand, South Korea, Saudi Arabia, the United Arab Emirates, and several others have already released pilot versions of their CBDCs. At the same time, Nigeria, the Bahamas, and Eastern Caribbean countries have launched their CBDCs as working projects.
Some see governments not only as governing institutions, but also as acting service providers. Global economic freedom, powered by DeFi, would allow the selection of governments that offer the best services in terms of quality, speed and efficiency. This refers especially to the taxation of crypto assets.
Responsibility is freedom.
In cryptography, your keys mean that you own your money. You are your own bank. So being responsible for your money gives you the freedom to spend it how you want, capitalize on it how you want, and interact on any platform or blockchain you want. To quote Michael Ondaatje:
“We are the real countries, not the borders drawn on maps with the names of powerful men.”
Nationality does not mean a place, but a membership to a certain group. One day, an entire group might relocate to their own metaverse. Since the competition for qualified professionals could become fiercer in a visa-free regime, entire cities and countries could come up with peculiar strategies to attract digital nomads. But would they ever settle down having this freedom?
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
The views, thoughts, and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Katia Shabanova is the founder of Forward PR Studio and brings more than 20 years of experience implementing programs for IT companies ranging from Fortune 1000 corporations and venture funds to pre-IPO start-ups. She has a bachelor’s degree in English and German studies from Santa Clara University in California and a master’s degree in philology from the University of Göttingen in Germany. She has been published in Benzinga, Investing, iTWire, Hackernoon, Macwelt, Embedded Computing Design, CRN, CIO, Security Magazine, and others.
This post Decentralized finance as a new accelerator of globalization
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