Recently, participation in traditional financial markets has become less attractive to consumers and institutional investors. Many new opportunities have emerged and much attention has been paid to decentralized economics. However, this new movement is not without risks and disadvantages either.
For decades, consumers and institutional investors have been exploring the many different options presented to them in the financial world. This approach worked quite well, as you can earn negative returns on your own savings account. Things look different today with many banks taking negative interest rates and continuing to take advantage of their customers.
Another issue that exacerbates the decline in the attractiveness of centralized finance is the persistent barriers in the industry. In particular, banks are forced to settle lawsuits regularly, mainly because of their misdeeds. This ranges from opening accounts to customers without their knowledge, hiding products with different names while providing the same service, money laundering, etc.
Despite all this, many remain loyal to their banks or other financial institutions. Or as it was before, because today many are interested in decentralized economics. Unlike conventional financing, DeFi does not have high fees, unfair terms or financial exclusions. On the contrary, it is a movement that aims to provide financial services to everyone, regardless of their current access to these products.
DeFi just got easier
Although it may seem that decentralized financing is meant to undermine traditional economics, there is still a lot of work to be done. In its current state, DeFi primarily serves users with sufficient knowledge of the cryptocurrency market. Unfortunately, the crypto industry is still a niche market today, although the prices of Bitcoin (BTC) and Ether (ETH) have risen rapidly in recent months.
In fact, there are no practical guides on how to prepare for these new financial opportunities. Each existing piece of evidence assumes that the reader is already aware of all the complications of cryptocurrency, which is usually not the case.
Education is the first big step
To understand the complex nature of DeFi, a clear and concise training is required. There is a growing need for investment-oriented education platforms for beginners. Posts that contributed to educational content about DeFi saw significant growth throughout 2020 and early 2021. Education initiatives aim to reduce barriers to accessing decentralized finance by educating people about cryptocurrencies and the opportunities provided by the broader industry. Ultimately, a good goal for DeFi is for another 100 million people to invest at least one dollar in decentralized financing by 2025. It may seem like a simple task, but it is not easy to convince millions of people to participate in the industry. Many people are still unsure about cryptocurrency in general and will probably feel the same way about DeFi.
We as an industry must recognize that things must be improved for the masses to take them more seriously. Building global influence through complex structures and technologies that require the use of cryptocurrencies requires a clear and concise learning curve.
A big boost to start more educational initiatives right now is the saga r / Wallstreetbets and GameStop. All over the world, people all over the world have suddenly discovered that they can make the financial market dance to their tune. It demonstrates the need to make the financial markets accessible to all, but the current financial industry does not always allow this to happen. This became clear when several suppliers stopped the GameStop shares to protect the largest investors. This is a good example of how unfair the financial industry can be.
Equalization of opportunities
In fact, the financial sector can operate without central guards or intermediaries. The DeFi industry has shown that this is possible, even though the industry is still in its infancy. An environment can be created where everyone can safely borrow, borrow and shop directly, but the pedagogical aspect must come first.
As public opinion on traditional money continues to hit the chin, it’s a matter of time before large groups begin to explore other horizons. Investing in cryptocurrencies has made it clear to many what financial freedom can entail. However, it is important to understand that this is only the first step on a long road to achieving this freedom.
DeFi is much more than just owning bitcoin, ether or other cryptocurrencies. Although it provides access to decentralized funding, industry-led educational initiatives will help explain how you can use these assets for more than just speculative purposes.