Dappcon ‘24
Could Web3 be the last stop on the long winding road to open banking?
Each year Berlin plays host to a series of conferences, events and activations as part of a decentralized community-organized initiative called Berlin Blockchain Week.
Since 2018 a dev community has gathered annually at DappCon.
Organized by Gnosis, one of Ethereum’s first dApps, the conference is dedicated to exploring the tools and foundational infrastructure of Ethereum — the first decentralized blockchain powered by smart contracts.
History
Dappcon 2018 emerged in the wake of the initial coin offering “ICO” boom and subsequent crash where up to 78% of projects that raised money were recognised as scams. Gnosis’ inaugaural event emphasised a builder focus guided by an ethos/vision that sought to diffuse the tension between usability and decentralization. Gnosis SAFE developed features like multisig as a result, building trust as well as facilitating significant security and convenience improvements.
Dappcon 2019 was the second largest blockchain conference happening during Blockchain Week Berlin with speakers including Vitalik, Joseph Lubin, Ameen Soleimani, and others. Themes discussed included DeFi, governance, and meme driven development.
Dappcon 2020 and 2021 took place online due to covid, introducing tickets as NFT’s as well as integrating them via hackathons to enable voting to determine the speakers. By this point Gnosis has spun out products including Safe, CowSwap, Gnosis Chain, and Gnosis Guild as catalogued in a report by MESH.
Dappcon 2022 happened just after Ethereum merged to 2.0, changing its consensus from proof of work to proof of stake. zkSNARKS, Optimistic & ZK-Rollups were themes du jour amongst a packed agenda of speakers, panels and hackathons. Key ideas ruminated upon included ethereum core development, Universal Basic Income & Dapps.
Dappcon 2023 emphasised usability & adoption, which figured center stage. The agenda was organised across seven tracks: AI, DeFi, payments, RWAs, privacy, user adoption, infrastructure/scalability.
Dappcon 2024 explored the overlap of AI & blockchain to enhance security/efficiency, the role of DeFi in creating more inclusive financial ecosystems, and the potential of zero-knowledge proofs (ZKPs) in ensuring privacy and scalability. Finally, as ever, the future of dApps was a focal point including the significance of account abstraction, authentication, privacy, and self custody.
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Highlight
On day two, the talk “From Crypto To Cards: Shaping The Future Of Self Custodial Current Accounts” featured a distinguished panel of speakers:
Rafael Coelho Santa Rita Pereira: Gnosis Pay
Julian Grigo: Head of Institutions and Fintech at SAFE
Joao Reginatto: Chief Strategy Officer @ M⁰ Labs
(infra for federation of digital dollar issuers)Christian Rau: Fintech crypto enablement EU GTM, mastercard
They reflected on the unrealised promise of open banking which, as far back as 2015, has been mandated via regulation as an initiative to foster competition, innovation, and consumer choice in the financial sector.
Open banking is a banking practice that provides third-party financial service providers open access to consumer banking, transaction, and other financial data from banks and non-bank financial institutions through the use of application programming interfaces (APIs)
Julian Grigo shared the analogy of watching something on Netflix or Hulu, which relies on media content that is stored on a cloud server from a providor like Amazon AWS or Microsoft Azure, served up via an Apple Mac laptop or a Sony TV for instance. Each of these services (curation, hosting, and hardware) is modularized and optimised by an interoperable network of entities. This enhances efficiencies and cost savings relative to sectors such as social media or finance wherein services are silo’d and thereby subject to several forms of capture including:
Data Capture: Where a single entity or platform controls user data, limiting users’ ability to port their data elsewhere.
Market Capture: Dominant players can monopolize a market segment, stifling competition and innovation.
Regulatory Capture: Large, established players can influence regulators to create favorable conditions for themselves, often at the expense of smaller competitors.
Innovation Capture: When services are siloed, they can hinder the integration of new technologies, limiting overall industry progress.
Crypto native architectures open up the white space for this open vision to come to fruition predicated on a decentralized infrastructure.
Farcaster is an example of this, an inherently web3 open source social protocol wherein users and developers are able to connect independent centralised entities or institutions. Operating in the classic/traditional model enabled Twitter, now rebranded to X, to easily to take possession of the @x and @music handles without consulting the handle owners. Reddit, and others, changed the pricing for access to their API’s, effectively pricing out popular third-party applications. Users on such platforms are locked in, with the daunting cold start prospect of having to start again each time when moving to new platforms — as opposed to the composable ideal of porting over previous connections into improved/alternative clients.
Kiwi offers up this decentralised functionality also whereby the links, upvotes and comments are stored at the protocol level but users or developers can create their own front end app clients integrating unique algorithmic preferences with respect to aspects like moderation and design. For instance there’s the kiwinews.xyz app and kiwinews.lol app.
Interoperable Open Banking
The concept of open banking is meant to offer the same revolutionary effect in the financial services sector by enabling secure data sharing and interoperability among banks, fintechs, and third-party providers. At its core putting consumers in control of their financial data, fostering innovation, competition, and tailored personalized services.
Yet, the journey towards true openness and interoperability has been hindered by longstanding silos, legacy infrastructures, and jurisprudential complexities despite regulatory efforts, such as the EU’s Payment Services Directive 2 (PSD2) and the UK’s Open Banking Standard which mandate data sharing and API integration.
Banking 1.0: technology was primarily an internal tool for improving operational efficiencies. The origins of open banking can be traced back to the late 20th century, when banks began adopting electronic data interchange (EDI) systems to facilitate interactions with corporate clients and other financial institutions.
Banking 2.0: as the internet and mobile technologies gained traction in the early 2000s banks leveraged digital channels to enhance customer experiences and introduce new products and services. However, these advancements were largely confined within individual institutions, with limited interoperability across the broader financial ecosystem.
Banking 3.0: crypto, dapp, and stablecoin enabled open banking. Users interact with decentralized finance (DeFi) platforms where lending is facilitated through smart contracts on blockchain networks. Smart contracts enforce loan terms, interest rates, and repayments transparently and automatically. Users can tokenise, and collateralize, their assets on the blockchain, using cryptocurrencies or stablecoins.
Future
The technological disparities across financial institutions and the prevalence of legacy systems have hampered seamless integration and interoperability. Outdated infrastructures and monolithic architectures are ill-suited for the modular, API-driven approach envisioned by open banking advocates.
Nonetheless, the potential benefits of open banking are substantial. By democratizing access to financial data and services, open banking promises to foster innovation in areas such as personal finance management, lending, and payments. Consumers could enjoy greater transparency, personalized advice, and the ability to seamlessly manage their finances across multiple providers.
Small businesses and startups, historically disadvantaged by limited access to banking infrastructure, could leverage open banking to develop tailored financial solutions, driving competition and customer-centric services. Moreover, DeFi platforms are open to anyone with an internet connection, removing barriers to entry for the unbanked and underbanked
As the blockchain enabled financial services vertical continues to evolve, the imperative for open banking grows stronger. Consumers are demanding more control, choice, and convenience, while regulators recognize the need to foster innovation and level the playing field. However, realizing the full potential of open banking will require a paradigm shift within or without traditional financial institutions, embracing data sharing, and collaborating with agile fintech players to co-create the open banking ecosystem of the future.
Notes
This is a submission to the Kiwi x Dappcon writing challenge: https://paragraph.xyz/@kiwi-updates/dappcon-writing-challenge
This article was originally published on paragraph.xyz/@papajams.eth
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Papa —Berlin Blockchain Week 2022 — In Touch: Art In the Age Of Post NFTism
Honoured to feature in a @kiwi top voted articles write up covering Dappcon at Berlin Blockchain Week /kiwi-news No doubt there'll be plenty BASE Dapp coverage at the next /onchainsummer. Excited to be building @tipothehat with @leovido.eth, see you on stage next year! https://paragraph.xyz/@papajams.eth/dappcon-24
Will be your full time supporter now 🫡🫶
FYI there is a writing competition here with a remote track that has a 500 xDAI prize from the @gnosischain /dappconberlin and @kiwi teams Appreciate all kiwi holders that take the time to read and upvote my submission focused on ethereum's dappcon 🤠 👍 https://paragraph.xyz/@papajams.eth/dappcon-24