What's Next for DeFi? by Rune Christensen (Devcon5)

hey everyone I'm rune CEO of the mega foundation and I'll be telling you all about what's coming next in dphi in less than 20 minutes but before we start talking about what's next we first need to talk about what's the point of it all what is the ultimate promise of d phi d phi is a new generation of inherently global and unbiased financial systems that have the potential to truly improve the lives of billions of people around the world we all know this saying that money is the root of all evil well I believe that with D Phi we can turn this on its head and we can use money and financial systems to solve the world's problems instead of causing them just look at global inequality one of the tragic consequences of the broken financial system of today well the way that D Phi helps with a solution here is by creating a new and superior financial system that focuses on efficiency instead of rent extraction and that it gives everyone direct and equal access instead of completely blocking a lot of people and giving the rest preferential treatment based on their status today the best you'll get is if you're rich enough and you're lucky enough you'll get access to private banking but in the future any person regardless of who they are or where they're from they will all have all that direct access right from their phones 35 and this is so important because what we're doing is we are giving people the tools that they need so that they can improve their own condition and that's why it's so important that we take the technology and we spread it around the world and reach all the people out there including the 1.7 billion without a bank account including the financial underserved that has been left on the fringes of modern society because of the Brogan financial system that was not able to serve them I'm incredibly honored to be here today speaking in front of all of you the very people that will build this future and I hope that you all keep in mind that technology that you've been lucky enough to get into this early in its life cycle exists for a reason it has the potential to truly improve the lives of billions of real people in the real world all right now before we go and save the world it's probably time that we take a realistic look at where defy actually is today because most people obviously know that the hardest part of the journey is definitely still ahead of us but that doesn't mean we can't be excited about how far we've already come because just think about if you went back for years in time and you were able to tell someone back then when a theory I'm just launched what they would be doing today on a daily basis would defy their minds would certainly be blown because it is pretty amazing what we're doing now and the reason for this I think is because of the we've unlocked the first quantum leap of D Phi which is the composability of D 5 protocols you can seamlessly and without asking anyone for permission stick and connect together defy and unlock the network effects and the synergy between them regardless of who you are many people in the community describe this as Legos right you can simply take ePHI and you can stack it on top of each other and I think one of the best real-world examples of this is the incident project so incident is one of the very first projects in a space that took this approach of combining defy protocols like maker and compound and putting a single easy-to-use front-end on top of them so that their users could get access to the individual protocols and the synergies that exist between them and this was built by two kids out of India with no connections with no start capital all they had was this direct access to the defy ecosystem and it worked there now the fourth most popular defy project and just a couple of days ago they were funded by some of the top investors in the space proving that there is real value in the composability of defy now if we go a step further to the newest layer on the defy stack we get to the point where things are starting to get real where defy is starting to interact with the real world and the best example of this are the die-cuts just like this one so this for those of you can see it is a is a crypto debit card that supports dye and this is a huge deal because what this means is that we now have a direct connection at the reg link between the entire traditional payment infrastructure and the entire defy stack and all the opportunity that it provides and it means that you can now go anywhere in the world and pay for a coffee with dye that you just borrowed using theorem as collateral in a defy protocol however just because we are now at the stage where you can finance Starbucks will defy doesn't actually mean that we're there yet right it's still just a small step because we're still just at the stage where defy is a really cool experiment that we now know works for real but where we have to go is to where this technology is improving and impacting the lives of real be people on a daily basis that are using this technology because it provides them with real utility and this transformation from experimental into mainstream impact is the hardest in any technologies adoption lifecycle and it's often referred to as crossing the chasm because this is actually where a lot of technologies they get to this point and they simply don't make it they don't ever enter mainstream relevance and they actually just die off so I think it is incredibly important that we as a community recognize the immense challenge ahead of us and that we work together so that we can make sure that our technology crosses the chasm successfully and has a real impact on the real world but the good news is that based on what I'm seeing in this space of working in defy for many years there are trends emerging and that are already happening and specifically two major trends that I think will be the basis of the next quantum leaps that will unlock the value and that will give defy the boost that it needs so that we can cross the chasm and the first is the tokenization of real world asses so the tokenization of real assets means that we are taking the traditional financial infrastructure markets assets the value we're taking all of this and we are bringing it onto the blockchain and doing that means that it then becomes available to interact with defy protocols just imagine tokenizing your house so you can put it into a maker CDP and generate dye and this way you've just created your own defy mortgage completely without any sort of interference from a bank or from a counterparty that might sound crazy but that is where the space is already headed and it's accelerating and this is how defy will get access to the trillions of dollars that exist in the real estate markets in the commodities markets and trade finance and get access to all of this value and all of this opportunity so they can be brought in to defy and provide the basis of our scaling to get our capacity to the point where we will be able to supply the entire world with a new and better generation of financial services and I especially think that if you look at this from the perspective of maker specifically it is really clear that it is only through real-world assets that we will ever be able to scale the supply of dye to the point where it needs to be if we really actually want to bank the 1.7 billion unbanked the great thing about the tokenization of real assets is also that once we have this scale and once we've brought on the legacy financial markets into the blockchain we can then turn around and bring the blockchain out into the legacy financial system and we can go out and upgrade the banks the payment infrastructure the clearing houses all these institutions and solve the fundamental problems that they have today with trusted accountability and this way create a lot of improvement in the world because just imagine if back in 2007 anyone could from their phone perform a real-time audit of the entire banking system just like you can today with maker using mpro tools I think the financial crisis would probably have played out a little bit differently now you can't start talking about real world assets without also talking about the other outward regulation and the regulation is a bit of a hot topic in the crypto space right there's a lot of people that are very concerned about it and how it is going to impact our ability to innovate and that's exactly how we failed in the mega foundation when we first many years ago realized that only through real-world assets will we be able to scale die to the place where it needs to be so that it can serve the entire world and bank the unbanked and what we found out is that the solution to this problem is already happening and it's already taking shape today and all you have to do is look at something like Bitcoin and aetherium and how they are regulated because what's happening is that the regulators are not touching the core protocol they're said going to the centralized exchanges that Bitcoin and aetherium rely on for their value and for their markets and this is a phenomenon we call regulation at the edges and it's actually a very natural process because what's happening is that regulators are always going to regulate anything they can get their hands on within their jurisdiction so they naturally go to the exchanges because that's what they can grab but no regulator is ever going to push through regulation that they know they cannot enforce so that is why they leave the decentralized protocols themselves on their own as long as they are truly decentralized and the great thing about regulation at the edges in this way is that if your protocol is spread out enough across the world so that its edges passed through a hundred jurisdictions the exposure you have to a single regulator is incredibly small and your risk is diversified to the point where it is barely any risk at all and that is why no one today would contend that bitcoin or etherium are not decentralized despite the fact that they rely on centralized exchanges for their value because ultimately the risk that this represents to them is so diversified that it is not a real issue and I think another issue another great example when it comes to regulation of blood chain is to look at you SEC on compound and how they interact because this is probably the first ever example of a regulated centralized real world asset being brought onto blockchain and used as the basis of value in a decentralized d5 protocol and I think that with these examples and these precedents that we are already seeing in the space there's definitely a way and there's definitely a stable environment that can be created where regulation and decentralization can be reconciled without compromising either so the D Phi can thrive and can remain decentralized but can also reach the scale that it needs to get to in order to serve the financial needs of the world now we've talked about the first quantum leap of composability in d Phi as well as the quantum leap that's coming with tokenization of assets that will allow us to scale D Phi on the supply side and on there with the capacity it needs to say to serve the whole world's needs but now we need to talk about how we're going to scale on the demand side how are we going to scale all the use cases of D Phi so that it can meet all the different demands that exist out in the real world and that are being met today by the current financial services and this is where synthetic assets come in so synthetic assets is the basic concept that you take D Phi and then use that to emulate a real-world asset and actually the best example of this is a synthetic acid is the dice table quarry because a decentralized stable point is just D Phi emulating the u.s. dollar and you can take this process and use that for anything including the euro or any other currency and this is actually a simple option that's available for instance to make your governance that is able to create any kind of stable and wants to create and it goes beyond just currencies you can do this for any type of asset you can create synthetic gold or synthetic stock index and these things are already happening so it really proves that D Phi truly has a capacity to meet any kind of demand and any kind of use case that currently exists for financial services and through this be a proper substitute for the current broken and unfair financial system so I really think that with the tokenization of real-world assets providing the scale that we need on the supply side and with synthetic assets scaling the demand side of defy and scaling the use cases of defy we have everything that we need so that we as a movement and as a community can take defy to the next level and successfully cross the chasm and have a major impact on the real world improving the lives of billions of people that are being treated unfairly by the current system now before I go just have one last thing to talk about multi collateral die is launching on November 18 finally yeah it's finally happening but of course because maker is a decentralized project the mega foundation isn't just able to launch multi collateral die on our own we need all Maker holders and the maker governance to support us by voting it through in the executive vote that's happening on November 15 so MPI holders please remember to vote and help us launch MCD one of the coolest things that's coming in multi collateral die is the die savings rate so the die savings rate means that anyone holding die will be able by just the click of a button earn a return on that die and this is very unique because this is a risk free return if you're already holding die there's not an extra decision you have to make whether you want to get this return or not it's something that can be built in automatically and that means it's creating a whole new dimension for developers and for d-5 projects to figure out how they want to integrate the die savings rate on the back end of their products and we're incredibly excited to see what you're going to do with this new feature and how what kind of innovation that will come out of it and of course also on November 18 it'll be possible for anyone currently holding die to through instantly with a click of a button upgrade your diet to multi-level die so that you can start earning the die savings rate and of course this is just the tip of the iceberg there are so many other new features coming to the system including of course multiple collateral types and that of course also means that there's going to be a lot of activity that maker covenants will have to participate in in order to launch this successfully I think it is so incredible to think about that what we are launching today or soon is almost exactly what was originally described in the first mega whitepaper more than four years ago so it really shows that we are delivering on the original mega vision and it's also so incredible to think about that like the huge technological leaps that we have made so that we could securely launch what is likely the most advanced blockchain application ever made so I want to thank all of you in the Theorem community in the mega community in the dphi movement for everything you've done for all the momentum you've created and all the hard work you've put in so that this day could become a reality and if you want to learn more and get some more details about launch please go to a blog and read the blog post there it'll have all the information once again thank you everyone so much I'm so excited this is finally happening after all this time and if you're an MCAT holder please remember to vote and participate in this launch don't miss this once-in-a-lifetime opportunity remember that maker is a decentralized project and it can only happen with the participation of all of you so check out our discussion forums and social media and be a part of the conversation about the future of maker and defy thank you everyone [Applause]