The Decentralized Economy During COVID-19

[RealMalatesta]

Crypto in general did see an increasing number of people dealing with it, I do enjoy that fact because it has always been something that I cared about, the price could go up or down and that is fine, but the number of people dealing with crypto should always go up in my book. That is why I think this pandemic was good on crypto, overall it was a horrible thing and hundreds of thousands of people died, I would rather have those people back instead of crypto going up any day of the week.

However if there is at least one good in it, we should take a look at the silver lining as something we can't change and have to accept. Did this affected de-fi? Probably, but it affected all crypto stuff so it is not really that shocking that one part of it got some attention as well.

[MCobian]

Does not bring any advantage COVID-19 for decentralized economy if in the long run, because COVID-19 if it still exists in the long run
will have a negative effect on everything. In my opinion, absolutely overhype right now is decentralized finance, and this is not something
good. Has no effect on cryptocurrency once COVID-19 will end soon, although in a few months the vaccine was finally found and COVID-19
ended. That will not affect cryptocurrency, now crypto is starting to rise in popularity and of course the price is slowly rising too, despite the
spread COVID-19 is still happening.

[exstasie]

This is absolutely misleading, DeFi isn't a competitor of traditional finance, all it does is that it allows you to take collaterized loans or flash loans (loans that are instantly returned back). You can't take a loan to start a business, you can't take mortgage, you can't take a student loan, you can't even ask for a small emergency loan.

In the future, I think we'll see more and more asset tokenization. That will be the basis for liquid secured loan markets. This includes real property mortgages, auto loans, etc.

I think once we have more robust decentralized/digital ID protocols and reputation-based systems, we'll also see more integration of unsecured credit into DeFi protocols.

The big problem for now, besides volatility and the problems of DAI-like stablecoins, is that so much money is going to be lost to bad code and unreliable smart contracts. This stuff is nowhere near prime time. So when I talk about this stuff, I'm talking long term, like decades from now. And that's if this all isn't just empty hype and the whole sector doesn't fizzle out.

[naikturun]

I've heard that term "de-fi" before, but I can't say I know much about what it means, and I'll have to school myself.

But even without knowing what that is exactly, as far as the topic of this thread goes I don't think COVID-19 is having much to do with decentralized finance, either with those tokens or crypto in general.  There's been less use of cash because of fear of handling money that's potentially contaminated, but nobody I know IRL is using crypto any more than they were prior to the outbreak--and I don't see why it should be that way in any case.

2.Decentralized finance is a buzz term,just like blockchain technology,smart contracts and Dapps.
I won't be surprised if the De-Fi projects turn out to be the ICOs of 2020-a bunch of scams.

Interesting.  And you might be right, since I'm pretty sure people are looking for the next ICO-thing now that ICOs themselves have turned out to be all scams or worthless projects.  That'll never end until people realize they're not going to get rich by doing nothing.

You don't have to know it in detail, because the rest of the market will play a role in it. My friend tries to buy ico on a new coin which of course uses de-fi, and the coin rises very quickly in a short time and almost makes 10x the price of ico.
sounds like hype but that's the truth
maybe soon we will see a lot of de-fi scam projects.
it won't take long.

[Police Indo]

DeFi is a smart contract as real proof of the application of blockchain technology and other accompanying techniques. However, because this is still in its very initial form, it is possible to make mistakes in implementing the program code, so that public trust must be maintained. this is a common problem of its application, especially if on a large scale. ISO standardization is needed so that its smoothness is guaranteed.

[hatshepsut93]

I think once we have more robust decentralized/digital ID protocols and reputation-based systems, we'll also see more integration of unsecured credit into DeFi protocols.

More like "if" we have decentralized identities, because there's still nothing even close to them. When it's trivial to obtain KYC documents and other personal data, or use neural networks to create fake one, you can't make a system that verifies identities without third parties. Plus this DeFi acts on a global scale, so a person from Canada can get scammed by someone from Bangladesh and have zero chance of prosecuting them.

[TheGreatPython]

Probably the current pandemic conditions are accelerating most people toward adopting cryptos and thinking about having financial commitments within themselves rather than depending on government nor corporate. But, I do see people one day or other, will start realizing the benefits of not depending on centralized things for their finance related needs and surprisingly that started happening in real world big thanks to covid19 pandemic and slow economic conditions everywhere.

I mean, it has to happen slowly over the time but due to pandemic things, it is already started happening in better pace.

What will happen with crypto once COVID-19 comes to an end?

I think decentralized fiance related services will persist by considering the continents, it can provide to common people; there cannot be big reasons for people to get back to centralized things. Once people realize the big benefits of decentralization then they will never stop using it, I am very much sure .

[Haunebu]

COVID-19 has had a small effect on the crypto market to be honest. If the effect was huge, we probably would have witnessed a huge bull run by major cryptocurrencies thanks to an influx of new investors from around the world, but that clearly isn't the case here.

Major cryptocurrencies like BTC have been stable for sometime now ever since the pandemic swept the world which proves my point. This is why DeFi hasn't gained much from the pandemic.

Among these cryptocurrencies, BTC is still way more popular than the others and I am expecting it to stay that way once the pandemic ends.

[Botnake]

COVID-19 has had a small effect on the crypto market to be honest. If the effect was huge, we probably would have witnessed a huge bull run by major cryptocurrencies thanks to an influx of new investors from around the world, but that clearly isn't the case here.

The effect that we are seeing here is so positive, it resulted to a good price and bitcoin was able to recover easily although early this year it was dumped when the covid-19 was announced as a pandemic.

personally, I am not expecting it result to a stable market, I was thinking it would follow with the stocks but I'm glad I was wrong and now I'm confident that bitcoin will never die as we have survive in this situation.

[stompix]

More like "if" we have decentralized identities, because there's still nothing even close to them. When it's trivial to obtain KYC documents and other personal data, or use neural networks to create fake one, you can't make a system that verifies identities without third parties. Plus this DeFi acts on a global scale, so a person from Canada can get scammed by someone from Bangladesh and have zero chance of prosecuting them.

You're going to be amazed how the perception of people will change once they have to deal with really decentralized things.
Just how people who are not trusting their banks with their deposits are praising Zhao just when he says "Funds are SAFU" and don't even doubt him the same will happen to these. At first, it will be wow, decentralized, then it will need some sort of authority, arbitrage, then more and more, insurance, then control, then KYC and sooner or later the whole things will just have the label "decentralized", like all the "bio" products at Walmart.

You don't have to know it in detail, because the rest of the market will play a role in it. My friend tries to buy ico on a new coin which of course uses de-fi, and the coin rises very quickly in a short time and almost makes 10x the price of ico.
sounds like hype but that's the truth

I wonder what could go wrong if we all invest and expect a x10 price ROI.

[Twentyonepaylots]

This is absolutely misleading, DeFi isn't a competitor of traditional finance, all it does is that it allows you to take collaterized loans or flash loans (loans that are instantly returned back). You can't take a loan to start a business, you can't take mortgage, you can't take a student loan, you can't even ask for a small emergency loan.

In the future, I think we'll see more and more asset tokenization. That will be the basis for liquid secured loan markets. This includes real property mortgages, auto loans, etc.

I think we have a thread about this tokenization of asset, I've already read trials about tokenization, eithere China or Russia but as far as I know there have been some conflicts with tokenization coz people are still in doubt with these new kind of assets. We need probably more years to establish a well founded system that will work, plus the maturing population of the world matters. You can't convince an 80 year old to transfer his money into digital, they don't even know what twitter is.

I think once we have more robust decentralized/digital ID protocols and reputation-based systems, we'll also see more integration of unsecured credit into DeFi protocols.

I guess this is the assignment of the tech companies now for the future, guess they already started testing one of these, especially the digital IDs.

The big problem for now, besides volatility and the problems of DAI-like stablecoins, is that so much money is going to be lost to bad code and unreliable smart contracts. This stuff is nowhere near prime time. So when I talk about this stuff, I'm talking long term, like decades from now. And that's if this all isn't just empty hype and the whole sector doesn't fizzle out.

In next 5 to 8 years for me, it would not take a decade for us to build a system like this, especially now that we have this global dilemma.

[thesmallgod]

De-Fi has been subject of discussion not only here on BTT but also on crypto blog but I'm yet to understand the usage and hopefully if it will address many problem that will pave way for more adoption. I  believe reason why it is not getting hyped is due to growing lost of interest in investing in crypto. I also don't see the correlation between the pandemic and how it can help De-Fi

[Argoo]

Ever since COVID-19 took the world by storm, people have been resorting to the world of "Decentralized Finance" (De-Fi). Ethereum-based smart contracts provide many services known in the traditional banking industry such as lending and borrowing. There's been a boom in "De-Fi" tokens over the past months as the mainstream economy loses traction.

If the current monetary system collapses in its entirety, people will dive in the decentralized economy like never before. It seems that COVID-19 is accelerating adoption of decentralized cryptocurrencies as we speak. The longer the outbreak takes to disappear, the better it'll be for the growth of "Decentralized Finance". I've seen many people talking about ETH's several "De-Fi" platforms, bringing some hype to the industry. Compound tokens (COMP), and even DAI have increased in popularity in such a short amount of time.

Do you think that COVID-19 will become extremely beneficial to the decentralized economy in the long term? Is "De-Fi" way overhyped these days? What will happen with crypto once COVID-19 comes to an end? Your input will be greatly appreciated.

For a decentralized cryptocurrency, it is not profitable to spread the coronavirus, but its consequences in the form of a global economic crisis. It is the onset of the economic crisis and the high inflation of the common currencies of states that will inevitably arouse people's interest in decentralized cryptocurrency as a financial asset that is not subject to inflation.

[justdimin]

The effect that we are seeing here is so positive, it resulted to a good price and bitcoin was able to recover easily although early this year it was dumped when the covid-19 was announced as a pandemic.

A lot of people speculate that the drop was caused by a major scam that took a ginormous amount of bitcoin with their scam named PlusToken nd they later dumped the coins which made the market to crash so badly while at the same time pandemic was on it's peak too so it is hard to say what exactly caused the drop but nevertheless we recovered it which means that bitcoins have finally gained the stability it was craving since it came into existence.

I don't think the economy is going to be decentralized ever because while decentralization sounds cool and offers freedom but at the same time brings a lot of problems which can be of greater threat than the benefits combined. I am not so appreciative of De-fi being so hyped although it is something to keep an eye on.

[Abiky]

I think defi has a yet to be fixed flaw in that it requires someone with high liquidity assets to be put up as collateral. You can't yet, even though it'd be more beneficial to, take a loan out on less collatoralised debt such as stocks afaik and you calso can't do it with real estate (I.e with a 30% deposit so you still have to 150% collateral at start).

Defi is good for releasing $ from crypto and may evolve to add better options for non smart coins like btc (with htlcs or something) but for now I'm a but skeptical as to the uses of the current stable coins. I haven't used compound but I had to convert 1300 dai before and found I could get 1320 usdc on coinbase for it which I think is a bit of a problem (but that could just be me, it's like giving a euro of change instead of a pound imo though)...

It looks like. Its just for traders now, if it expands from that then it might be good.

Agree. For what I know, De-Fi is just starting to blossom. Flaws will be discovered over time, just as it's the case with any emerging technology. I've seen how disruptive the space is, providing banking services to the unbanked. With no need for ID or credit verification to participate, De-Fi could allow anyone around the world to have a stake in the crypto economy. I think De-Fi is ideal for times of turmoil (like the ones we're facing right now). We might soon see a future where jobs are paid in crypto, while people put their savings on the Blockchain without the need to interact with a real bank in the mainstream world.

Of course, De-Fi is extremely hyped right now as stablecoins are getting all the attention in the crypto/Blockchain space. Coins like USDC and Tether USDT may not be perfect (as sometimes price is less than $1), but they've been able to serve their purpose most of the times. I'm concerned that USDC and USDT are being manipulated by their own issuers, as they censor certain people from getting access to their assets across the Blockchain. It greatly defeats the purpose of De-Fi, as the middleman is brought back again into the system. For De-Fi to work as intended, there needs to be a stablecoin that's completely decentralized. Luckily, we have DAI which fits the bill nicely. But being the only decentralized solution around, greatly limits one's options. I'd prefer to have many decentralized stablecoins than centralized ones on the market. Ultimately, people will decide whenever they want to keep using centralized stablecoins in De-Fi or not.

Nonetheless, COVID-19 will certainly have a positive impact on the decentralized economy in the upcoming months. The long the outbreak takes to disappear, the better it'll be for the industry in general. In these times of need, people are looking for a safe haven against traditional Fiat. As governments print money like crazy (effectively debasing the value of their own national currencies), people will rely on De-Fi to protect themselves against the dreaded inflation. With scarce cryptocurrencies like Bitcoin, Litecoin, and Maker, there's a store of value for everyone in this emerging decentralized economy. Just my opinion

[Alobo Realer]

Do you think that COVID-19 will become extremely beneficial to the decentralized economy in the long term? Is "De-Fi" way overhyped these days? What will happen with crypto once COVID-19 comes to an end? Your input will be greatly appreciated.

Crypto currency have been in existence long before the pandemic.stroke the world. This market had proved it worth and almost fully adopted globally before this virus outbreak.
Covid-19 doesn't have a strong benefit for the decentralized economy and as such it's absence would not be felt, crypto is already rooted and nothing change the people's mind

[Yamifoud]

Do you think that COVID-19 will become extremely beneficial to the decentralized economy in the long term? Is "De-Fi" way overhyped these days? What will happen with crypto once COVID-19 comes to an end? Your input will be greatly appreciated.

Crypto currency have been in existence long before the pandemic.stroke the world. This market had proved it worth and almost fully adopted globally before this virus outbreak.
Covid-19 doesn't have a strong benefit for the decentralized economy and as such it's absence would not be felt, crypto is already rooted and nothing change the people's mind

Bitcoin is almost fully adopted, in fact, we even don't reach at least half of the global population who holds and knows about Bitcoin. If you could see how many countries ban crypto, definitely their people have no chance to invest Bitcoin. If we could say that the pandemic is pushing people and leaders to adopt the system, maybe but not to the point that almost all of us are in adopting this.
The hypes cause by DeFi existence is something to help the market to be more popular and this is not connected to the pandemic, it is just like a big coincidence that DeFi had launch during this time. But can't we foresaw what it happens to the market after this crisis and to sure that there is a huge change after.

[hatshepsut93]

At first, it will be wow, decentralized, then it will need some sort of authority, arbitrage, then more and more, insurance, then control, then KYC and sooner or later the whole things will just have the label "decentralized", like all the "bio" products at Walmart.

We already have DEXs and DeFis with centralized switches for letting intervene if something bad happens, and it's only a matter of time until these mechanisms are used for some exit scam or when a government tells to do so. And this whole blockchain technology thing has always been about looking cool to investors rather than actually making something that would benefit companies or users.

[Salauddin1994]

The decentralized economy is going to be positive during COVID-19. Although the country's economy has been affected by the virus the demand for a decentralized economy has increased significantly. The centralized economy has paved the way for the plunder of the corporate world and the exploitation of the common man So even after so many years of independence, the poor people have not seen the face of development Not only economics is responsible for this but also powerful political leaders cannot deny its responsibility However, since Bitcoin is not under anyone's control, it is moving at its specified speed.

[carlisle1]

Do you think that COVID-19 will become extremely beneficial to the decentralized economy in the long term? Is "De-Fi" way overhyped these days? What will happen with crypto once COVID-19 comes to an end? Your input will be greatly appreciated.

 crypto is already rooted and nothing change the people's mind

\Actually this is wrong because this pandemic teaches people more about the advantage of cryptocurrency when the physical money has been discouraged a the infection might spread more then.

The decentralized economy is going to be positive during COVID-19. Although the country's economy has been affected by the virus the demand for a decentralized economy has increased significantly. The centralized economy has paved the way for the plunder of the corporate world and the exploitation of the common man So even after so many years of independence, the poor people have not seen the face of development Not only economics is responsible for this but also powerful political leaders cannot deny its responsibility However, since Bitcoin is not under anyone's control, it is moving at its specified speed.

Indeed and has been proven so many times that people are in search of new financial system and they found it in cryptocurrency so basically sooner more adoption will happen.