**I wrote the DeFi is under siege article to establish the need for a coordinated action plan if the DeFi community ever wishes to reach a bankless future. We also announced the Prague DeFi Summit which is going to happen in Prague on 8th-9th June 2023 to enable such coordination. **Given the great response we got across various channels I would like to follow-up by proposing three main areas around which the plan could revolve. I invite you to read the following article and submit your thoughts on it. Your input is critical.
https://twitter.com/PragueDefi/status/1617829975884984320
DeFi is currently on the brink of getting regulated to oblivion. Some even claim that DeFi is already under full control of the US government since more than 60% of the Ethereum blocks are OFAC compliant. The good news is that there are already brave souls dealing with regulators in various markets, such as Marina Markezic, co-founder of EUCI, whom I’ve had the pleasure of recently being introduced to. However, in the grand scheme of things, it’s still a drop in the bucket and as an industry we’re on the defense at best.
I had the opportunity to talk to some politicians and regulators about DeFi. My conclusion is that they either have no idea about what’s going on with DeFi and don’t bother getting familiar with the topic because it doesn’t relate to their agenda; they impartially observe the industry to decide if / how it should be approached; or they straight up use the industry as a scapegoat to camouflage their own shady business or to collect a few more political points by bashing DeFi (which works well due to the bad PR of the industry, which we’ll explore in the next section). There’s just a handful of politicians who (at least partially) champion the DeFi / crypto cause.
Yet we might be standing in front of the biggest opportunity (especially in the EU market) since DeFi is among the main topics for the EU commission this year. Can we coordinate and make the most of it?
Let’s be honest. It’s really easy to bash crypto / DeFi at the moment. Most people either have no stake in DeFi, or tried it at some point in the past, got burned and swore never to use a dapp again. In such a setup, as a media house, even if you write the stupidest article attacking the industry, you gain more in terms of engagement from the mainstream than what you lose in terms of reputation from the (still small in numbers) DeFi community. Slandering crypto, be it Bitcoin, altcoins or specifically DeFi, currently represents free points, so the media does it often. (Bitcoin obituaries is a fun illustration of this)
Again, there are some brave souls who have been dealing with the industry PR for some time now. One of such is Samantha from YAP Global, but again, we need to significantly scale up this effort to be able to consistently win over the global public perception. PR also influences everything else. If we get the public on our side we’ll have a much easier life when dealing with the regulators (among other things).
The most optimistic estimates claim that there are about 6 million DeFi users globally. However that is a tiny number in the grand scheme of things. And while this might be an awesome source of hopium (by claiming that we can still grow 10x, 100x or even 1000x) it also means that we haven’t reached the escape velocity yet, because there are no mainstream DeFi users. Without mainstream users we’re stuck in a vicious cycle of bad PR and no influence over the regulatory environment, which loops back into the DeFi community having a hard time onboarding mainstream users.
However, the problem is not just about onboarding mainstream users. A large portion of the problem lies within our ability to keep the newcomers around. We have a powerful onboarding ‘event’ on our side: the market hype cycle. As the price goes up we also typically see a big influx of new faces into the community. Unfortunately we struggle to keep them around after the prices inevitably drop.
In my view there are two main causes of the drop-off. Financial loss and poor user experience.
There’s no need to elaborate too much on the financial loss side of things - be it because people jump in just before prices crash, they burn themselves on complex products, or simply because they get scammed along the way, there’s not a lot of motivation left to keep exploring.
The poor UX on the other hand is something I could write thousands of articles about and it still wouldn’t be enough. The fact that all of DeFi has been built by the most brilliant, talented engineers on the planet is a blessing and a curse at the same time. They’re literally pioneering the most advanced financial technology, which, however, nobody in the world except themselves and a few close friends can reliably use. I will definitely elaborate on this point in the future, but let’s just wrap up this section by saying that DeFi in its current shape is not ready to onboard mainstream users. Thankfully there are some heroes inevitably heading for the history books already dealing with the topic of UX, such as Sasha Tanase, Amy Jung and Andrej Berlin.
As I’ve mentioned earlier, I don’t have all the answers to put together the strategy. We need the entire community to engage, which is the main reason why we’re hosting Prague DeFi Summit and the buildup to the event.
The most powerful way to contribute right now is to submit your thoughts about what I wrote, or about anything else DeFi related on the Summit Twitter, Telegram, or Discord (which has been created based on the community feedback).
The Prague DeFi Summit early bird tickets are on sale as of the time of writing, so make sure you get them while they’re available!
See you in Prague!
For sponsorship opportunities and speaker applications check out praguedefisummit.com or reach out to info@praguedefisummit.com