The US Federal Reserve estimates that in the US alone, ostensibly one of the major superpowers of the world, about 22% of the population remains in a classification of “unbanked”—someone that either doesn’t have a bank account or is operating on a prepaid account only. This population is underrepresented and underserved, not just in the US though, but around the world. Many populations worldwide struggle to find proper banking and consequently are denied access to advanced financial features that wealthier people have at their disposal. The unbanked are unable to generate wealth because they are unable to put their money back to work for them and they can’t do that because they are blocked from the simplest financial entry point: The banking system. Decentralized finance, or DeFi, aims to change that and is the only viable solution to this problem that has a working proof of concept already operational worldwide.

The concept of DeFi is simple. While in a traditional banking system, the bank is the ledger holder that manages all transactions, processes payments, writes out IOUs, etc, in DeFi everyone becomes their own bank and has access to that ledgering system (the blockchain, or rather, a blockchain in this case). Since everyone has access to this technology, everyone now has access to financial services that would normally be denied them. Things like the ability to earn higher interest rates, leverage money for larger investments, flash loans at better rates — all becomes available. DeFi enables an unbanked population to come online and inject liquidity into worldwide markets. As cryptocurrencies become worldwide defacto tender this will enable new wealth generation at scale and allow a new class of people to become impactful owners that are able to create their own value for their communities.

The future of decentralized finance is one of optimism and hope, a future where everyone is able to truly own their money, investing it where they see value, all while still having direct access to their funds for use. There’s not really foreseeable way around adoption from where I stand: The alternative is for a large swath of the population to both remain unbanked and also remain unaware of the existence of banking alternatives like DeFi. Remember, this is a difference of requiring a bank, handing over deeply personal information to said bank, and trusting the bank to properly handle and manage your money while also allowing them to limit what you can and can’t do with that same money or generating a seed phrase and clicking a “Connect Wallet” button. While there is a deep learning curve that differentiates DeFi from the well entrenched systems most people are more comfortable with, the difference when put like that should be clear to any up and coming generation: Banking, at least in the traditional sense, is on its way out. And I can’t really say I’m sorry to see it go. In order to have a financially free society, we must accept the responsibility of banking ourselves. Once we have gotten over that mountain, the rest will become molehills.