In terms of its core , Innovation is exciting . Innovation involves a new way of operation , It can bring more efficient and convenient commitments to consumers and enterprises . Think about cars 、 Transistors or smartphones . However , When innovation involves Finance when , Often face questions about safety and applicability — This is the problem that financial technology has faced in the past decade . The good news is , Financial technology has made life more convenient for most people , On this point, we can basically reach a consensus . Think PayPal and Rocket Mortgage.
today , We'll hear right( Decentralized Finance ) Doubts and doubts . Regulators have put DeFi The rise of is seen as increasing Traditional financial system Of risk . Considering that we are all skeptical about past innovations that ultimately brought significant benefits , This is not very surprising . The problem is , Why is that? ？ Can we overcome the brain's 「 Status quo preference 」, And realize DeFi It may reduce the risks existing in the traditional financial system ？( notes ： Status quo preference (status quo bias) It means that humans tend to maintain the current situation .)
First , Let's explain some background information . since DeFi About since the rise of large-scale 18 In the months , There is already about 800 Billion dollars Our capital has been invested in DeFi Agreement , This is a large amount of .
DeFi There is a reason why it has grown so fast and become so important . Into the DeFi Every dollar on the platform , It's dollars that people decide not to deposit in banks or invest in traditional asset management companies . Why? ？ Because a lot of people think , Participate in DeFi Risk adjusted return is more favorable than traditional banking or investment services .
Let's see Some shortcomings of today's consumer finance . In all our memories , Because of the quantitative easing after the financial crisis and the economic stimulus plan in the COVID-19 era, etc , Interest rates earned by depositors in banks have been low . Rampant hidden costs (hidden fees) Exacerbated the problem , Even when the explicit transaction cost is zero , Hidden costs can also reduce customer returns . Inefficiency due to centralized structure 「 Walled Garden 」( for example ,Venmo Users can't send Zelle User payment ), Customers of one institution cannot trade with customers of other institutions .
Besides , There is also the risk of human error , for example , The bank's Credit Committee approved a high-risk loan that should not have been issued , Or refuse to provide credit to reputable borrowers . perhaps , More worrying , Human discrimination will enter this equation , Further lead to the disadvantage of certain groups or individuals .
obviously , It's frustrating , So I come back to this question , Why is that? ？ Why are we so sensitive to the risks we are familiar with 「 Status quo preference 」, Will stop us from seeing DeFi This new idea may reduce or eliminate some of these risks ？
Technology neutrality vs. Human beings are prone to error
Prior to joining Binance.US Become CEO Before , I headed the occ (OCC), This is the main supervisory body of the U.S. Federal Banking System . therefore , That's true. , The main focus of financial supervision is those errors caused by human negligence or dereliction of duty ( for example , cheat 、 Self dealing 、 discrimination 、 Insider trading 、 Modeling errors, etc ).
Each of these mistakes depends on the human in the decision-making process . for example , When someone violates a fiduciary duty , Collect from others 「 Gratuity 」, Or conduct illegal securities trading based on inside information , Insider trading will happen . by comparison , A properly decentralized technology system is unintentional Illegally amassing money or committing other crimes . Most of the time , Especially compared with human beings who are prone to mistakes , Decentralized systems are neutral . Human greed 、 The same is true for other violations caused by incompetence or negligence .
Put yourself in the shoes of a bank examiner . Do you think it's easier to check an open source software , It's easier to ask someone who might lie ？ Now imagine , If the human factors leading to each error or dereliction of duty described above can be greatly reduced or even eliminated , Won't this solve when today A lot of Of Risk ？
I would like to point out that ,DeFi Not without risk . stay DeFi Under the system , Money laundering is still possible ( Although it can be said that it will not be so frequent or easy ); Poorly programmed algorithms will still have a differential impact on a small number of credit reliable loan applicants ( Even though DeFi The probability does not involve differential treatment discrimination ). Besides , many DeFi The agreement is closely integrated with its native token , The value of its native tokens may be more volatile than other assets that investors are accustomed to dealing with , This means that risk disclosure is particularly important . But the fact remains , These technologies , If used carefully and properly , It can help solve many financial system risks in a technological leap , Instead of solving them incrementally .
It's important , It's also comforting , because DeFi The growth of seems inevitable , Just as the original Internet inevitably replaced the library or post office in American life . Centuries ago, banks acted as intermediaries to solve The asymmetry of information and trust And exist , Now Has been significantly improved by technology , Especially blockchain and artificial intelligence . On information 、 The need for large central repositories for business and finance is being reduced by some technologies , These technologies allow decentralization P2P Network faster 、 Perform the same function in a cheaper way .
I hope we can recognize this pattern of behavioral psychology , It makes some of us afraid of early technological developments , We almost missed the benefits of them . Yes , The wagon manufacturer was permanently replaced by the automobile industry , But most of us live more conveniently ; Many respected physical retailers have been permanently replaced by the commercialization of the Internet , But the speed and price advantage of online shopping make the life of most of us better . However , Once again, we are afraid of a new technological revolution , And not because the current financial system is very popular .
writing ：Brian Brooks, Binance.US CEO
edit ： The south wind
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