Decentralized finance (DeFi) has become a mainstream trend? Look at these killer products, maybe you will understand

Trend: Decentralized Finance (DeFi)

In 2019, DeFi Finance became one of the most interesting topics in the 2019 blockchain field.

According to Consensys, more than 100 cutting-edge blockchain projects are pioneering in decentralized finance, such as Ethereum-based stable currencies, DEX (decentralized exchanges), investments, derivatives, payments. , loans and insurance platforms. Surprisingly, statistics show that decentralized finance is now an economy worth up to $430 million.

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(From centralization to decentralization, taken from Victor Fang, copyright belongs to the original author)

So, what are the killer products in the decentralized financial sector today?

The three decentralized financial/blockchain/encryption startups that A16Z crypto invited to share this event are dYdX, MakerDAO, and Celo. They happen to contribute to the killer application in this area.

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MakerDAO is clearly the leader in driving the development of stable currency technology. Today, the supply chain financial world operates in complex ways, such as “usury” to provide liquidity for cash-strapped businesses. Maker is trying to pass invoices so that Wal-Mart and its suppliers can enjoy better liquidation and less friction in the future.

As the adoption of cryptocurrency grows, more asset classes will enter the global market through citation. For example, coffee growers in Colombia today may have no choice but to use loan sharks to fund day-to-day operations. These growers will soon be able to pass Starbucks accounts receivable and sell them to the global market for immediate payment.

In this way, Dao can simultaneously help alleviate the well-known pains of international remittances, and the pass-through invoices provide a new and reliable type of collateral for the Maker credit system.

As for the killer application of dYdX, it is an open source agreement for decentralized margin trading and derivatives. To put it simply: As the price of ETH drops by $1, the price of sETH has risen by $1.

Celo's killer app is mobile cryptographic payments, starting with emerging markets such as South America. In any case, the United States and China are too crowded and well regulated. Cryptographic currencies do require more consumer products like this.

In short, DeFi killer products should have the best availability. Users may not even realize that blockchain technology exists in their financial transactions. If users must know the terms of ruggedness, wallet, etc. before they can use these products, it is a failed product.

Decentralization brings a new way of organizing the company

Decentralization not only brings new technologies, but also brings new ways of organizing companies. Interestingly, experts shared their views in corporate organizations in the blockchain era.

So what are the advantages of decentralized companies?

flexibility. Decentralized companies can have employees anywhere in the world. Making decisions doesn't have to be fixed in a room like most companies do. The CEO, chief marketing officer, and chief technology officer don't even have to be in the same country. Decentralized companies can send the nearest team members to customers anywhere in the world.

But the disadvantages are also inevitable. Efficiency can be a problem for decentralized companies. Centralized companies have the advantage of quickly iterating product features in a centralized office.

How to deal with the security challenges of decentralization in the future?

With the hacking of DAO in 2016, the Blockchain APT was hacked in 2018, and the security of blockchain and cryptocurrency became an emerging topic.

The nature of the public blockchain means that if there is a smart contract error, the hacker will find it because the source code is usually visible on the blockchain.

“This is very different from traditional cybersecurity.” I worked on the security team FireEye and asked the expert group about the security challenge: “Today people don’t convert savings into cryptocurrencies because it’s too slow? Still too unsafe? However, in the future of decentralization, there is no FDIC (Federal Deposit Insurance Corporation), no SEC (US Securities and Exchange Commission), who will govern the market? As a provider of decentralized finance, experts What do you think of the security of the blockchain?"

The experts answered:

There will be more decentralized financial products, forming a highly competitive market, and soon only those who focus on security will win because it will suffer less hacking.

Need to ensure smart contract security. For example, formal verification by TrailOfBits, one of the companies that provide technical security audits for smart contracts. Formal verification is still in its infancy, and TrailOfBits will soon seek to open source their tools.

DeFi's startups are small, so they do what they can do best now, such as code reviews, smart contract audits, and exchange infrastructure enhancements.


“Defi” in French means “challenge”. There are certainly challenges to overcome, but it is like the same when all great technologies (electricity, internet, social networking) have just emerged.

I hope you learn enough magic spells in the blockchain and cryptocurrency world. Exciting time. Exciting location. Just like magic.

About the Author:

Victor Fang, founder & CEO of, a blockchain accelerator student at the University of California, Berkeley, is an artificial intelligence-driven blockchain security company.

Source: Silicon Valley Insight (