DeFi is a Rich Nerd’s Pipe Dream

Four nerdy-looking men shuffled awkwardly onto the stage. One had an extremely oversized Uniqlo hoodie – a must-have for tech startup founders – lazily draped over his hunched shoulders, while another looked like the head of the Russian mafia, except that he was sporting a neon green shirt plastered with Axies, unicorns, and a single rainbow that oddly amplified his masculinity. All of them looked like they had spent the previous night snorting lines of co..mputer code.

“Can I request for the sound system to increase the volume please? I can hardly hear the panellists”, the moderator exclaimed after the men had mumbled and squeaked (I kid you not) through their introductions. Oversized hoodie guy even read his self-introduction off a phone balanced on his lap.

As “Crypto Tim” at Blockhead, I had the unenviable task of covering the Binance Blockchain Week, a three day, jargon-filled event held virtually and in-person in Dubai that had one too many exclamations of “crypto is the future”. While admittedly informative and creativity inducing (I was running low on content ideas before the event), I felt as if I was gatecrashing a cult’s ritual where its followers were just desperately worshipping their all-encompassing and ever-charitable entity known as “Web3”.

For the rest of us simpletons and “normies” who just can’t seem to grasp the geek-like infatuation with Web 3.0, it’s just another smart alec-buzzword predictably coined by a crypto native – Polkadot and Ethereum co-founder Gavin Wood. Broadly defined as the next iteration of the Internet, it’s supposedly built with next-gen decentralised applications – think marketplaces selling grotesque cartoon animals and their cheap knock-offs for hundreds of thousands of dollars, virtual worlds where users pay to flex their pixelated wieners, and DeFi (decentralised finance) platforms that are probably going to be developed by one of those awkward geeks I mentioned earlier. How terribly exciting!

Ok, perhaps I’m being a little harsh.

Pardon my lack of computer-fueled sophistication pretty please? I’m just finding it hard to believe that the so-called future of finance will actually become a reality, especially if it’s going to be built from jargon, poor fashion choices, and with little oversight from boomer policy makers, computer-illiterate traditionalists, and most importantly, the rest of us. Just like the event, DeFi seems like a closed community of ultra-rich computer geeks who are touting DeFi as the future simply because they were lucky enough to experience the Ethereum boom in 2017, and can now afford to channel their dodgy funds through a web of food-themed protocols and Adjective Animal NFTs (I’m saving my rant on million-dollar JPEGs for another time). A more “equitable” form of finance? Kiss my fiat ass.

On paper, the idea of DeFi sounds viable. We’ve all heard the script – no human intermediaries, no physical institutions and their bureaucracy. Just you and your funds in a non-custodial wallet interacting with others via a smart contract on a shared network. But it also means that money, albeit in the form of digital tokens, can instantly be conjured out of thin air and mind-boggling wealth can appear (and disappear, mind you) with a few clicks. If anything, DeFi is more of an exclusive magic cabaret than a global financial system.

“There’s a big difference between getting a billion users and 15-20% of the world’s wealth. The biggest issue here is that there are so many people who are unbanked, denied access to legacy financial institutions, or can’t bear the insane cost of remittances etc, and these are users who are welcome in crypto”, said oversized hoodie guy, when asked about what is required to bring the next billion users on board DeFi.

I think there’s a bigger difference between actually bringing financial services to the masses and computer nerds salivating at the 20% APY offered on a random rainbow-coloured platform. With ridiculous variants like GameFi where centralised companies operate under the false pretence of helping developing countries through Pokémon rip-offs, DeFi is nothing more than a rich get richer and the poor get poorer gimmick – a dangerous pipe dream propagated by tech capitalists who are seizing the opportunity to further exploit social inequality and greed. Because let’s be real here, are they really into crypto for the “tech”? Do they actually care for inclusivity and equality?

“If we don’t exercise our voice, the only things that get built are the things that are immediately profitable. And those are often far from what’s actually the best for the world”, Vitalik Buterin, the biggest-headed nerd, told Time magazine. He’s absolutely right, and if he’s this concerned about the state of crypto, we need to start asking ourselves if this Wild West of an industry will actually be able to fulfil its lofty promises in the long-run.

Hope you enjoyed my rant – sorry, not sorry. And please stay tuned to Blockhead, because we’re going to boldly question every aspect of Web3 (yes, including the pixelated wieners) and bring you those fresh, unbiased and critical perspectives that might just unBlock your head.

Views expressed in this article are the author’s own.