In November 2021, “fintechjunkie.eth” did a deep-dive of the Web3 space based on his (at the time) novice understanding and exploration of it. This resulted in observations that attempted to plug the gaps between the Web3 space and the traditional finance world. What needs to be built in order to turn DeFi into a fully-fledged system comparable to today’s financial markets.
Subscribe here to get access to the first 500 ideas from our blog. For just one coffee a month, you can have access to more than $500 billion dollars of ideas. What's not to love?
The Tweets that I find most interesting from his thread are below:
DeFi is trying to replace people, policies and process with code and incentives that disintermediate financial transactions.
“… making an unsecured loan will need Primatives that don’t exist today outside of TradFi. Collections is a great example. And some Primatives are built around proprietary IP which makes them very difficult to build in DeFi land (i.e. – risk models). And for common secured loan use cases, many complicated “real world” Primatives need to exist: A valuation primitive, a title certification and insurance primitive, a repo/eviction primitive (car/house/etc), a sale of assets Primitive, etc.”
It’s a certainty that many Primatives in DeFi land won’t look like they do in TradFi world. For instance, assets originated on-chain will require a different set of Primatives than off-chain assets. MANY Primatives need to be built before DeFi can replace TradFi.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)