Decentralised, staking-based prediction market for the crypto community
The first 30 days of 2021 didn’t quite provide the placid contrast to 2020 which the world was hoping for, however from the agitation and affray one inescapable fact became strikingly apparent; that there is a fundamental problem with traditional financial systems.
GameStop brought this to the forefront of the public consciousness, but the reality is that the issues which lead to that situation escalating to the extent it did had been brewing for a long time. In 2014 PwC published a report which highlighted that, within the growing financial intermediary sector of banks, brokerages, centralised exchanges etc., the risks of cybercrime, bribery, corruption and fraud were also growing.
This is a logical correlation; the more people involved in a financial transaction, the greater the chance is that a bad actor will find his way into the system. Combine this with the perennial risks associated with large, over-centralised, unaccountable institutions, and it should’ve come as no surprise that brokerages and providers of retail liquidity turned their taps off to the public when the price of GME started to raise eyebrows in the (virtual) boardrooms of Wall Street and the City.
And yet, despite this, the headlines did indeed come as a shock. It incited a great deal of indignation that financial institutions, which had long elicited suspicions of surreptitious malpractice, could so openly display their contempt for retail investors. And in doing so, they also inadvertently achieved something seemingly impossible; consensus across the US party political spectrum. Alexandria Ocasio-Cortez, Ted Cruz and Donald Trump Jr. all came out to condemn the actions of brokerages which closed their markets to retail traders, while hedge funds saw no disruption to their market access.
No doubt the hypocritical aspect of this fiasco played a part in uniting their verdicts; counted among the rank and file of firms who impeded retail investors were those who claimed to be democratising financial markets. This situation brought the demand for a decentralised financial system to a zenith; a public blockchain would be capable of providing financial services and market access to everyone, regardless of their status, location, net worth etc.
The number of startups and companies which have recognized the potential of open source networks to change, decentralise, and democratise economic activity is increasing exponentially, with innovative new ventures entering the space daily. As such, decentralised networks such as Bitcoin and Ethereum could go a long way in solving issues around high barriers to entry within the traditional financial system because of their permissionless nature, meaning that anyone in the world can connect to it. On a global level, this would alleviate problems of inequality posed by the current centralized financial system.
Additionally, the records, provenance, and transaction history of bitcoin and other cryptocurrency networks are kept scattered across thousands of devices, with no central authority or repository controlling the flow of information or activity. Blockchain is also, contrary to the popular misconception, completely transparent, since all transaction records are publicly auditable and trackable on the payment ledger.
In the wake of GME, retail market participants the world over are clamoring for features such as these, and are turning towards blockchain tech in a bid to extricate unaccountable intermediaries from their financial transactions. As decentralised tech becomes more prevalent, and is adopted by a greater number of users, its potential to reshape and redefine the financial and transactional systems will become more pronounced by the day.
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Lead image via Mathieu Stern on Unsplash
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