Unlocking the next DeFi growth chapter



Quick primer: DeFi stands for Decentralised Finance, the catch-all term for financial products and services built using open-source blockchains. DeFi is programmable and smart contracts remove the need for third-parties to facilitate interactions. That makes transactions fast, cost-efficient and safe. Because it’s permissionless, everyone can create and participate in DeFi applications.

The DeFi movement is by far the most impactful trend in the crypto industry today. It offers a new way of engaging finance that simply makes more sense to a new generation interested in financial products. In a break from traditional finance with centralised institutions, high entry requirements and lengthy application forms, DeFi opens up the world of finance to anyone with an internet connection.

For every product that exists in traditional finance, DeFi offers a different, decentralised alternative across savings, loans, borrowing, trading, insurance, portfolio management, payments and more. Some of these apps are arguably better, in the sense that they provide financial autonomy and introduce a new level of efficiency. Other applications form the basis of entirely new concepts like streaming real-time finance with Sablier.

The crypto world has taken notice. The amount of ETH locked in DeFi is an indication of user engagement, and currently stands at the all-time high of 3.1 million ETH worth 2.19 billion USD as of writing. And while that is a huge accomplishment already, it is nothing compared to what DeFi could be if it transitions from niche to global economic activity.


That’s what the next growth chapter is all about.

The starting points for DeFi are limited

Currently, DeFi best serves people who are already initiated in the crypto space. Even if you’re a novice and you just have some crypto in a wallet somewhere, it’s not that big of a leap to get into ETH, fund your MetaMask, and try out some of the DeFi apps out there. It is very accessible, in a niche way.

But how do you get started if you don’t already have crypto?

Truthfully, buying crypto is still a difficult thing for most people and for those without crypto, credit cards or bank accounts DeFi remains inaccessible even though those would be the people who need it the most. That means on a global level, most people have no easy access to everything DeFi has to offer.

Getting alternative finance off the ground across the world is going to require some alternative thinking, particularly around improving the on- and off- ramps between fiat and crypto. As strange as it sounds in a world obsessed with going digital, cash could be one of the most effective ways to do that.

Why cash still matters

In contrast to what many experts and the media say, cash in circulation is actually rising as a percentage of GDP in every continent in the world. Not everyone has credit cards or mobile payments apps but what they do have is cash - physical pieces of paper commonly used everywhere, making it the best medium for connectivity.

In countries where there is a low money supply, we often see that smartphone and internet adoption is high, with cash demand even higher - at times even at a 50% premium. Third-party payment processors and credit card penetration in Asia and Africa is low, with 70% of transactions still done via cash - particularly in countries like Nigeria, India, Indonesia, and the Philippines. These are giant markets and getting DeFi off the ground here requires a different approach.

Making DeFi cash friendly

There’s a reason why only a few businesses in the crypto space serve cash markets. It’s fundamentally a difficult thing to achieve as it requires physical locations where people can exchange between cash and digital balances. That’s where the opportunity lies for those that know how to capture this market. Digital banks based in emerging markets immediately come to mind. They operate mostly in the digital world, but because of the reality on the ground have needed to create ways to make that service cash friendly.

Some examples from cash-friendly African digital banks include Kuda Bank in Nigeria which enables cash deposits at any GTBank or Zenith Bank branch, customers of Zambia-based Zazu Bank can deposit cash through Zazu Agents, BeBank in Mauritius supports cash deposits and withdrawals at affiliated retail locations using the mobile app, and South African TymeBank offers the same at Pick n Pay and Boxer outlets.

Once cash is digital, building a connection to DeFi is entirely possible. It would create incredible opportunities for DeFi to reach more consumers in new markets, providing solutions outside of the crypto-first on- and off- ramps used today.


Finally, decentralised finance would truly be accessible to anyone, anywhere.

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