The world of crypto-currencies has brought many innovations in its wake: programmable currencies, NFTs, metavers... However, one of the most important innovations for businesses in the long term could be DeFi, or decentralised finance.
DeFi applications, which are completely "decentralised", run on blockchain-resident programs (smart contracts) that run on peer-to-peer computer networks. And as with cryptocurrencies, it is the duplication on each of these computers of all the information linked to a DeFi application that makes this technology reliable and secure.
This being said, DeFi, which emerged at the very end of 2017, is still very young and there is a lack of concrete use cases in companies. Nevertheless, the field of possibilities could be immense and affect many professions.
DeFi: overview of some applications that have appeared
To better understand the potential and the spirit of DeFi, let's take a look at some of the applications that have been developed... These will inspire tomorrow's managers for exchanges, transactions and certain types of future services that are essential to their businesses and their customers.
Synthetix simulates the price of real shares hour by hour. The application allows you to bet on the price of a share (Apple, Tesla, Microsoft, etc.), but also on fractions of shares. These bets can be made without the need to open a share account or provide proof of identity. This means that you can pocket the profits of the share without ever having owned it.
On the real estate side, RealT allows you to own a flat or a fraction of a flat in just a few hours where it would usually take several weeks in real life.
In addition, applications such as Curve Finance or Aave open the way to loans of sums immediately usable in real life (in traditional currencies - euros, dollars, etc.) but secured by its cryptocurrency assets.
Apps such as Etherisc FlightDelay Protection give the possibility to insure a single plane flight, ideal for insuring the occasional nomadic employee's flight, whereas an insurance policy would require at least a one-year commitment.
DeFi: young, but promising!
Examples of DeFi use cases in companies are still very rare (or not very well communicated...). On the Financial Services side (banking, insurance), DeFi would thus offer a new and unprecedented playground for companies in terms of investments, where flexibility would reign supreme:
- Diversification of investment portfolios with a degree of finesse previously impossible
- New sources of financing
- Customised insurance on demand
- And so on.
Moreover, we are already seeing a promising field of developments well beyond the financial services sector alone: Bloom is paving the way for a universal digital identity; Gitcoin intends to exploit the mechanisms of DeFi in crowdfunding; etc.
In a recent speech on CNBC, Paul Maley, CEO of Deutsche Bank, stated that banks that want to remain competitive will have to ensure their ability to interact with DeFi systems as they emerge.
It is perhaps in the exploitation of this new field of possibilities that they will find a fruitful opportunity in the future, particularly if they want to ensure that they capture the emerging clientele of "metaverse-natives".