Decentralized finance (DeFi) is booming. And among everything blockchain has to offer, DeFi is one of the most legitimate sectors and – arguably – the most promising. But like everything in life, it has its pitfalls too.
“Decentralized finance allows anyone a do-it-yourself version of investment banking, supported by high rewards and high risks; it’s like bringing the casino into capitalism,” Olga Vorobyeva (Olga Vox), Founder at Vox Consulting, told me.
And she should know. As well as founding Vox Consulting – a marketing firm for blockchain, DeFi, and NFT startups – Vorobyeva is a partner at Crypto PR Labs and a former Head of Marketing at SwissBorg – the first crypto wealth management platform. Known as a founding member of the Swiss Blockchain Association and Advisor to Swiss Startups, she has been an active voice in the blockchain community since 2014, building communities of tech entrepreneurs worldwide and speaking at major blockchain conferences and meetups around the world.
“I studied finance and economics and started my career path with BNP Paribas Bank, where I was in charge of white label projects for large international companies like Sanofi, Coca-Cola, Volvo, Volkswagen Group, Jaguar, and Land Rover,” Vorobyeva said. This job was an intersection between finance and marketing, so I quickly learned how to incentivize people and help them to fall in love with the financial products we created.”
Vorobyeva’s friend and peer, Daniel Bessmert – a former C-level executive at PayPal, Citibank, and Visa – reached out to her with an intriguing idea to launch a cutting-edge payment solution app.
“We started GetZash in 2014, and a year later, it was a successful exit,” Vorobyeva said. “It gave me a lot of inspiration, and since then, I have been involved in FinTech startups as a marketing consultant, mentor, and adviser.”
Being on the cutting edge of finance solutions ever since, it’s natural that DeFi is a focus for Vorobyeva, especially given the recent hockey-stick growth in that area.
“Decentralized Finance has been a trend for a while, and now we’re sitting at a market cap of about $80 billion,” Vorobyeva said. “In 2021, assets locked in DeFi projects grew 385%, according to DeFi Pulse. At that pace, total assets would break $800 billion near the end of next year, and that’s only the beginning.”
That’s impressive, but it is still a far cry from the assets in play through traditional finance systems. What will it take to make DeFi more mainstream?
“Mainstream players are already getting involved,” Vorobyeva said. “Many TradiFi companies and financial institutions are beginning to accept DeFi and seeking ways to participate. For example, 75 of the world’s biggest banks are trialing blockchain technology to speed up payments as part of the Interbank Information Network, spearheaded by JP Morgan, ANZ, and Royal Bank of Canada. The name of this trend is CeDeFi (Centralized Decentralized Finance) as a separate and more institutional branch of DeFi.”
But just as the small print on any financial product says, the value of your investment can go down, and that’s also true of any DeFi project, which is still in its infancy. However, unlike the early days of traditional finance (and some would say the current day too), where corruption and scammers ran rife, blockchain has an ace up its sleeve.
“The innovation made possible by smart contracts, which can automatically move crypto around based on rules defined in computer code, has allowed us to replicate pretty much all the services of a bank for crypto, without needing a bank, and enforce those rules,” Vorobyeva said. “Given the fact that two-thirds of people don’t have bank accounts but do have smartphones, DeFi has the potential to open up finance to them, and that’s exciting.”
DeFi is likely to continue its rapid growth for some time, especially given the interest in and involvement of traditional finance behemoths. The surge in total locked value from $10 billion to $80 billion in just the last year shows how fast the sector is growing. So, what’s next for Vorobyeva?
“Vox has helped dozens of Blockchain projects that facilitated economic growth throughout the world, including in developing countries, by offering the community easier access to capital and financial services, and we’ll continue to do that,” Vorobyeva said. “Millions of people will now have the opportunity to invest, send money across borders, save for their futures, and start a business thanks to the amazing possibilities that cryptocurrencies bring to the table.”