“The interest rates that you find in crypto are appropriately reflecting the risk that you’re taking. The reason why they are high is because there are a lot of risks, both known and unknown, for participating in the De-Fi ecosystem”. Marc Weinstein takes off running with a very valuable explanation for an exceptionally educational podcast on Crypto. 

For people that don’t know, “De-Fi” means Decentralized Finance. More accurately, it is open finance and a system that allows for self custody of assets. You don’t need a third party, like a bank, to hold your digital currency. The second piece is permission-less access; anybody can participate. You create a Digital Currency Wallet, like MetaMask or Uniswap, and with an internet connection the world’s population is able to assess the network without prejudice or restriction. The interesting cascade is what you can do with digital assets from there. 

Today the largest liquidity digital asset is Bitcoin. Naturally some of the most common sector activities are trading digital assets, like bitcoin, with other digital currencies. In de-fi, digital currencies are traded on what is referred to as ‘Decentralized Exchanges ’. Blockchains are really cool pieces of technology that enable transactions in the network to be recorded securely. In the case of buying or selling Bitcoin, the transaction must be recorded on a ledger. At a local bank a teller would support the transaction and the bank would keep the record of the deposit or withdraw on its systems. Miners work for Bitcoins by recording the transactions on a collective ledger that is replicated with everyone. Transactions line up and need to be recorded in all databases. This is “blockchain”. 

The digital asset era is now. Visa announcing that the Ethereum technology is available to settle USDC transfers on its networks coupled with Morgan Stanley’s new Bitcoin mutual funds for investor portfolios sends a growing message of institutional acceptance. Traditional investing has a digital twin! Applicability and public acceptance have grown in waves over the last few years. 

The recent craze over NFTs (Non-Fungible Tokens) are only the latest popularized aspect of what can be done with crypto once it is  attained. NFTs confirm the uniqueness of a digital item as well as its authenticity. They can be minted for sound, visuals, and even a fart! The uniqueness of anything is obvious, but until now humans have not had the systems in place to confirm and protect that asset in the digital realm. The NFT interest spike helps artists and creative types continue to evolve their craft and support a larger market of buyers on platforms like Nifty Gateway or OpenSea. Ultra Art Gallery is set to be released as a high-end Hub Culture art world product in 2021 as well.

Join us in an opportunity to expand and grow. Jump on the block train by listening to this latest Chronicles episode here: The Chronicle Discussions, Episode 46: Crypto Class: Defi, NFTs, Bridges and Oracles