There is a phenomenon in which the rich become richer and the poor become poorer. Growing young generations are investing in stocks and real estate and go so far as to invest with debt leveraging. Many people say “If I had bought a house at that time”, “If I had bought stocks at that time”, or “If I had bought Bitcoin at that time”. It happens today that some people either get rich or poor overnight.

Democratization of Finance

Recently announced housing price in Seoul, South Korea is about $1M. Everyone is getting into an investment, realizing that they can't buy a house only with their wages. Fortunately, in these days, there are various platforms such as YouTube, Podcasts, and Blogs where you can learn financial information and economics.

Financial services for retail investors such as Robin Hood, Ministock, and Toss have lowered entries to the market. The financial market which used to only allow Wall Street, investment banks, venture capital, and hedge funds to be entered is now open to people thanks to these services.

Furthermore, a platform has emerged where groups of people agreeing to the vision and direction of unlisted companies can participate in fundraising instead of just acquiring stocks in the secondary market.

Angel League, one of the services in Korea allows people to purchase the private equity of a startup as a union member. Over the past year, the average return of Angel League reached 107%, outperforming unicorn startups such as Yanolja, Kurly, Krafton, and Toss.

Twig, the private equity investment platform provided the users with an opportunity to invest in global startups such as Robin Hood and Kraken.

More services linking stocks to digital assets have also been created. FTX, a global cryptocurrency exchange, launched a product which is linked to the value of stocks such as Tesla, Apple, and Google that can be purchased with cryptocurrency.

The stablecoin platform Terra built a platform for trading and issuing synthetic assets based on the value of the real stock on the blockchain. And it is free from regulatory censorship by the countries and institutions.

Unlike the existing traditional financial market, individuals are given more authority to manage various assets in the cryptocurrency market. Many platforms are coming with interest rates higher than the commercial banks and that can make people get the short or long position through low collateral ratio with crypto. Also, there is a platform that allows anyone to make their own portfolio to create index funds in crypto.** \n **

In the future, various open financial services can emerge from cryptocurrency. This will be able to give more authority and opportunities for retail investors. So It is time to readjust the "Uneven playground" in the existing financial industry, which was only advantageous for institutional investors and traditional large banks.

Communitization of Finance

With the development of the Internet, now anyone can get information for investment and the asymmetry of information has been resolved. Retail investors are starting to create an investment community and exchange information with each other. The community formed in this way has strong power.

Investors in the community begin to pay attention to new assets in Long-tail, not traditional assets.

An example is the GameStop in January. There was an incident in which individual investors in the Wall Street Bet(WSB) were angry at institutions' short positions. They responded strategically and systematically causing a short squeeze.

The epicenter of this incident was WSB, one of the communities in Reddit. The Reddit community, along with Twitter, began to create the WSB's meme culture and as people were forwarding and sharing it. More people became interested in this incident and participated in the community.

The same thing happened with Dogecoin. Led by Elon Musk, CEO of Tesla, WSB, and people on Twitter were shouting out support for Dogecoin and made a huge impact. Through the meme culture and SNS, Dogecoin has gained big attention in the community.

These phenomena were started and led by the MZ generation who consists most of WSB and Twitter users. They led this meme culture. MZ can come up with great memes and use them as a means of online communication. The community has created a kind of culture by using memes and begun to make new trends.

New added value can be formed if people start to get interest in certain assets and drive the trend. The community creates its own consensus mechanism and the people who belong to the community can form a fellowship and sense of unity.

This is similar to the dollars printed by the U.S. Federal Bank. Because the value of the dollar is also created by the consensus and belief of a specific community. (Agreement of all global countries in the case of dollars).

The dollar's hegemony has been maintained for about 80 years since the Bretton Woods in 1944, but its power is gradually weakening. Since 2008, quantitative easing has been implemented. In Particular, dollars have been distributed indefinitely since the start of Covid-19.

As the value of the dollar weakens, doubts about the dollar and fiat increased and interest in new assets is growing.

So are Bitcoin, luxury brands, and NFT (Non Fungible tokens). More people consider Bitcoin as digital gold and communities for Bitcoin are growing, the value of Bitcoin is formed.

Similarly, luxury brands have their own philosophy and fandom that loves their products. Luxury goods have an irreplaceable value that is only for luxury brands and cannot be given by ordinary products. People having luxury goods differentiate themselves from others and show off their wealth by purchasing luxury goods.

Like luxury goods, the value of NFT can increase when communities and fandom who love NFT are growing. And so are people who recognize expensive and scarce NFT.

Furthermore, communities can create values for 'specific people' beyond specific assets. People who are supported by the community such as celebrities, YouTubers, and influencers, can create new added value. They will be able to interact with the community by communicating with fans through their own tokens (personal tokens).

The Value of the Community and Money

Recently, ‘Dangguen Market’, an online secondhand marketplace in Korea, raised the investment with a valuation of $2.7B from Soft Bank Ventures Asia, Altos Ventures, Kakao Ventures. This valuation is higher than that of Shinsegae Group, a major domestic retailer in Korea. If Dangguen Market simply focused on the secondary market, this valuation would not make sense.

https://techcrunch.com/2021/08/17/south-korean-online-secondhand-marketplace-danggeun-market-raises-162m-at-a-2-7b-valuation/

In fact, the strength of the Dangguen Market is in the ‘local community’ rather than its core function of being a secondary market. Dangguen Market forms a local community for users in a specific area and provides various information such as local restaurants, cafes as well as trading second-hand stuff. Dangguen Market is creating value through the local community.

The value and power of the community are really strong. The value created by the ‘Bottom-Up’ method from the community is gradually causing social changes through various experiments.

Community elements can’t be excluded when valuing a specific asset or company in the future. Even with the era of the digital world and the digital assets, the value of communities people form will become more important. Eventually, communities will become power and money.

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