There’s No Quick-Fix to Poor DeFi Accessibility, But There’s Hope: ReSource Co-Founder, David Casey

We caught up with David Casey, Co-founder and CEO of ReSource Protocol, for a quick chat where we tried to pick his brains as much as possible. And as expected, we received some amazing insights from him regarding the crypto and DeFi industry. He spoke about the ReSource Protocol, the problem they are trying to solve, and more. In addition, David also shared his thoughts on stablecoins and their future. He also mentioned a few developments in the crypto, DeFi, and NFT space that have caught his attention.   

Q1: Please give us a brief introduction about you and your company. 

I’d like to call myself a ‘social entrepreneur’. I am a Political Economy graduate from Berkeley with a specialization in Global Poverty & Practice and Energy & Resources. This very well explains as to where my hunger for systemic changes erupts from. I have founded 3 companies while consulting and advising a number of other firms.

Also, I have helped other businesses scale to the heights of 8 digits in revenue. Right now, my work is centered around leveraging blockchain technology for socio-economic transformation. From supporting the global permaculture movement to restructuring how credit works, I’m honestly someone who is working at the nexus of blockchain and impact.  

My company, ReSource, is working hands-on to revamp the credit system with more emphasis on respecting talents and efforts than vanity metrics. ReSource is a mutual credit protocol that allows participants to get access to affordable credit without relying on banks, creditors, or sharks. We strive to empower small-scale businesses and freelancers with stress-free credit. 

Q2: What are the drawbacks of the current credit setup that the mutual credit system is set out to solve? Also, please explain to us how mutual credit works. 

Absolutely. The current landscape of credit and lending is more of a disservice to businesses than a service. The exorbitant interest rates, the opaque terms, coupled with the moral high ground attached to the lending party have together made credit - a handicap that businesses pay and wear.

Simply put, mutual credit is a commodity-backed monetary system. It is independent of initial capital in the form of money and relies more on resources like unsold inventory and/or goods or services of the same value. All the mutual obligations of the participants in the mutual credit system are tracked using blockchain. 

A modern-day barter system, you may call it. However, the major difference is the involvement of DLT (distributed ledger technology) which removes the two-party-only side of the barter system. Several participants can take part in this multi-sided lending system.

We, at ReSource, offer access to affordable credit to participants using an overdraft-enabled current account that exists on our marketplace. We will also be building additional functionalities and products that serve mutual credit service in B2B and, later, B2C verticals.  

Mutual credit helps build an inclusive trading network that maximizes mutual benefit while freeing businesses from external lenders, credit, and the hanging knife of accumulating interest to be paid. 

Q3: For the average population, accessing DeFi is a headache even now. What do you think is the need of the hour for DeFi accessibility to be improved?

First of all, we need to understand that DeFi is a pretty young industry. Currently, builders and developers on DeFi are more focused on the security and utility side of things, and rightly so. The underlying infrastructure for DeFi is maturing by the day which is a good thing as DeFi products and services become more useful for the end-user when the infrastructure is stable.

So, calling ‘accessibility’ as the need of the hour for DeFi, I feel would be slightly irrelevant. However, I do understand that the majority of the population is averting from DeFi for this reason. 

Now, there is no quick fix for this, and making DeFi more accessible shall be a result of several independent actions. First off, the entire space of crypto, DeFi, and Web3 need a simplification drive. Inclusivity in DeFi can only be achieved if the services, products, terms, and everything else are simplified.

Also, DeFi, as a whole, needs a universal fiat on-ramp in place because DeFi accessibility is inherently dependent on crypto accessibility. The easier it is to convert fiat into crypto, the more people are likely to utilize DeFi services using their crypto. So, fiat on-ramp needs to be emphasized.

Accessibility can also be enhanced by education. Humans are naturally apprehensive of the unknown. Similarly, the majority of the population don’t understand DeFi hence the detest. So, educational initiatives are vital for people to believe, understand, and get started with DeFi.           

Q4: What are the stark differences between traditional mutual credit initiatives and that of using blockchain technology? 

Traditional mutual credit initiatives were completely human-based. This entails the concept of trust which in the olden days could only be generated by physical interactions. Therefore, the mutual credit economy was restricted to close-knitted groups in certain specific locations. This placed a limit on the resources and commodities that can be locked in one mutual credit system.   

Using blockchain and digital mediums, this can be completely overhauled as participants from any nook and corner of the globe can take part in a mutual credit system. Geographical limitations are removed and this allows for more commodities and resources to enter the system. And the trust in the system is empowered and maintained by blockchain tech.  

In traditional setups, the risk of negative balance and siphoning of funds could only be negated by physical means. And the evidence i.e. records of mutual obligations in the mutual credit system was easily corruptible and not secure. Substitute this with the distributed ledger technology which records all activities in an immutable manner while also being accessible to all the system participants.   

Back then, the evaluation of the creditworthiness of an individual or a business entity was largely influenced by their moral and emotional perception. There was no quantitative backing to the risk-taking ability of a person or company. However, today, off-chain and on-chain metrics can be analyzed and the credit-worthiness can be attributed using a number. 

By this, the risk of bad debts, frauds, and unlawful activities in the mutual credit system can be mitigated.    

Q5: Share your thoughts on how the stablecoins landscape might shape up in the future. 

Stablecoins are a classic concoction of stability, security, and liquidity. They solve problems on different fronts with ease. And they shall continue to be the drivers of both activity and growth of the crypto and DeFi industries. With Web3 and metaverse closing in on us, stablecoins are going to be the currency for all things digital.  

The best thing about stablecoins is that it is relevant even for those outside crypto and DeFi. Fearing volatility, many stay away from investing in crypto. What this abstinence entails is that their fiat currencies are losing value due to inflation. Other assets like stocks, real estate, etc fail in the liquidity side of things. However, stablecoins provide them with the best of both worlds.

I also believe stablecoins will disrupt e-commerce and will settle as the most preferred mode of payment. This will force banks and other financial institutions to adopt stablecoins and facilitate transactions. Since they are free of the infamous volatility, stablecoins can also be the binding factor of the DeFi and CeFi alliance.     

It is a no-brainer that stablecoins are the lifeline of DeFi but the number of stablecoins in the current market startles me. I sincerely believe there will be mergers and failures of several stablecoins leaving out only a big few. For further ease, these will embrace interoperability to effectively become one universal stablecoin.

Q6: What are the key developments in the crypto or DeFi space that you are keeping your eye on? 

Metaverse, obviously, is in my peripheral vision, but I believe it is a long way away from being anything stable and useful for all. However, NFTs - one of the vital elements of the metaverse - are something that grabs my attention more. There is a huge room for opportunity for NFTs to grow and mature, as an industry. 

One key application of NFTs that I’m curious about is how they are used in real estate where the terms ‘fractionalization’ and ‘tokenization’ have been hitting the headlines regularly. Also, I am keen on how NFT auction places and galleries might look. Can museums be NFT-integrated? There are so many use cases to explore in the NFT industry.

Also, I have my eyes fixed on crypto and DeFi firms generating educational content and running learn-to-earn initiatives. The influx of smart and well-informed money into the market is a must for the market to mature and decouple itself from the perceived cynicism attached to it. I’m looking at institutional adoption of crypto education too. I foresee mainstream universities and colleges introducing courses and degrees on crypto and DeFi. 

Keeping all these aside, the most important development I have my eyes on is the regulations that are being drafted and imposed on crypto across the globe. They have the power to break or make the industry. Though a blanket ban is not worth considering, the governments have the legal authority to do so. I feel a concrete legal framework for crypto is closer than expected in most nations.