Dr. Chiente Hsu is CEO and cofounder of ALEX (Automated Liquidity Exchange), the first complete DeFi exchange on Bitcoin.
Bitcoin is the only way to get truly decentralized finance (DeFi). DeFi hasn’t yet emerged as a game-changing force because it requires fully expressive smart contracts which aren’t possible on the core Bitcoin protocol due to their security trade-offs. However, there are several projects hard at work building layering solutions that allow the variety of smart contracts that have recently made DeFi on Bitcoin a reality.
As Bitcoin DeFi grows, it will allow sovereign collectives to determine their own bitcoin yield curve, increase the capital efficiency of bitcoin as an asset, and accelerate mass adoption and the development of the bitcoin economy.
Truly Become Your Own Central Bank
We want to be clear that Bitcoin does not need DeFi. Bitcoin existed years before DeFi emerged and Bitcoin will remain should DeFi ever disappear. DeFi, however, needs Bitcoin; without the security and immutability unique to Bitcoin, DeFi will never achieve mass adoption.
Only recently have we discovered bitcoin, the ultimate form of money. What we recognize as modern civilization, however, is not built on top of money but rather on top of finance. Global debt will always exceed physical currency in circulation because of banking systems. Finance includes banking, market places, financial instruments, credit and leverage; currency is just one of several asset classes. Consider that there is about $1.5 trillion dollars[1] of physical USD in circulation, yet the U.S. national debt alone is over $30 trillion dollars[2].
The reason for this is that time — not money — is the most valuable resource. Debt — specifically in the form of yields and interest rates — is the medium of exchange
