Why DeFi Needs a “Causal” Web 3.0 for Mainstream Adoption

It would be both disingenuous and erroneous to describe any kind of financial Dapp as wholly “decentralised” (that is not to say that that is a claim DeFi makes) as no such “100% decentralised” platform, interface, website or protocol exists.

If “DeFi” is not 100% “decentralised” then what is it?

However, if DeFi is not making this claim, which it (and its underlying technology) is not, then that leaves a pretty big elephant in the room — one that Decentr is dealing with as we develop our radically-new decentralised tech (platform + browser): if a so called “DeFi” Dapp is not 100% decentralised then it leaves itself open to many of the third-party faults, failings and vulnerabilities of centralised finance — only without any recourse to a centralised authority or governance to rectify oversights.

DeFi, a peer-to-peer financial paradigm, which leverages blockchain-based smart contracts to ensure its integrity and security, and contains over USD $1.6Bn of capital as of June 2020. Yet as this ecosystem develops, with protocols intertwining and the complexity of financial products increasing, it is at risk of the very sort of financial meltdown it is supposed to be preventing — largely due to the fact it is not based on 100% decentralised protocols or tokenomics models that are sustainable mid to long-term.

Moreover, design weaknesses in DeFi protocols could lead to a DeFi crisis.

DeFi Dapps, of course, are not the only blockchain based applications that struggle to maintain the integrity of their lofty, decentralised goals when building on foundational tech that is, to a greater or lesser degree, centralised. It is simply that it is when discussing DeFi applications in particular that the degree to which it is remiss to slap the term “decentralised” on any tech that is shoehorned onto a blockchain application becomes most pronounced: i.e., the accusation can be made that it is pedantic to quibble over the “real” semantic and lexicological scope of the word “decentralised” when referring to many of the vague, ill-defined and unworkable applications being built on blockchain.

However, this cannot be said of finance as finance requires the terminology and tech that underpins it to be more robust to deliver very specific and precise outcomes.

“To move the control of an organisation or government from a single place to several smaller ones.”

Therefore, when we at Decentr refer to “100% decentralisation”, this means the 100% removal of control from larger organisations to ever smaller organisations, which thus infers the process is only complete when the control rests at the level of the smallest entity in these organisations, and that, of course, in the wider decosystem is the individuals comprising it.

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Current DeFi Dapps are, due to the flaws in the underlying tech, essentially, caught between “b” and “c” and is hence a precarious and unsustainable solution (in its present form) for wide-scale public adoption and enterprise level financial transactions, which is why it isn’t realising its enormous potential, either with the broader public, business or industry.

This lack of 100% decentralisation runs deeper in the context of defining a “true” Web 3.0 on which DeFi might be built and be sustainable in the mid to long-term.

The slow uptake of any real and dramatic Web 3.0 technology solutions is, in our view, because it is a distinctly uphill battle on an ever steepening incline to “contextualise” the current web: the laws of entropy simply do not allow for the race towards fractured and unstructured data that can somehow, in some undefined manner employing some undefined mechanism, move towards becoming structured without urgent and major intervention.

This intervention needs to be in the form of a set of truly decentralised web protocols whereby decentralised dataflow plus data storage by default begins to turn the tide in the direction of structured and refined, not unstructured and unrefined data.

Solve that, then you have the basis for “true” DeFi because the robustness of the foundation tech and the immutability of the contextualised data — including financial data and the activity it describes — is a standardised, immutable, predictable and predictive. This is the tech we are building.

The solution as to how to build this tech is relatively straightforward (at least conceptually): to create a “true” Web 3.0 that can support true “DeFi” Dapps requires the creation of 100% decentralised Web 3.0 protocols — the definition of this being a platform that combines decentralised data storage with decentralised data flow (which is the platform + browser we are building).

A true decentralised Web 3.0 by definition replaces centralised institutions with a decentralised network of individual-users-as-nodes, each controlling the internet (and hence their finances and the collective financial assets and models that support the platform) at the level of the individual.

In short, what needs to be borne in mind is that 100% decentralisation is not the diminishment of control to a shadow melee of faceless third-parties on an impenetrable matrix over which we all as users have no control — that is simply bad tech, and the stuff of soundbites that ignorant crypto haters, such as Paul Krugman, Nobel laureate Joseph Stiglitz et al, like to put out there to try and confuse the masses into accepting that the fragile and ultimately failed experiment of mainstream economics is the only alternative that can exist — as though it is somehow an immutable law of the universe.

100% decentralisation is the ultimate expression of DeFi’s aim to deliver user-centric financial services: Decentr achieves this by delivering foundational control of Web 3.0 into hands of every user so that the net functions for every user in precisely the way that every individual user needs and wants, when and how they want it, from the perspective of the targeted retrieval and contextualisation of relevant information. This information includes contextualised financial information, payments and trades as central to its outcome due to the fact 100% decentralisation repurposes 100% secure value itself as a payable and tradeable currency: a “perfect” circular economy.

We look forward to answering all your questions. Admin@decentr.net

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Your data is value. Decentr makes your data payable and tradeable online. Decentr.net Medium.com https://rich-james.medium.com/ t.me/DecentrNet