Long before banks, credit scores, and digital payment apps, communities around the world developed an ingenious way to save money and access credit together, a practice in which a group of people agree to contribute a fixed sum at regular intervals into a common pot, and in each round one member takes the entire pot,…
Read MoreFor most of its short history, decentralized finance grew up in a curious legal vacuum, an experimental world of lending pools, automated exchanges, and yield strategies built almost entirely on top of a kind of digital dollar that governments had barely begun to define. That digital dollar is the stablecoin, a cryptocurrency designed to hold…
Read MoreFor most of the short history of cryptocurrency, the stablecoin occupied a curious and somewhat thankless position, a digital token designed to hold a steady value of one dollar and to serve as a reliable medium of exchange within a volatile market, yet one that paid its holder nothing at all for the privilege of…
Read MoreFor most people, the place where idle cash sits is not something they think about very deeply, since money that is not being spent or invested tends to rest quietly in a checking account, a savings account, or perhaps a money market fund offered by a brokerage, earning a modest return and waiting to be…
Read MoreBitcoin, the first and largest cryptocurrency, has long been understood primarily as a store of value, a kind of digital gold that people buy and hold in the expectation that it will preserve or grow their wealth, and for most of its history that is essentially all it has been used for. While other blockchains,…
Read MoreDecentralized finance is built from a set of basic financial building blocks, including lending markets, exchanges, and other protocols, that each perform a single, well-defined function and that can be freely combined in countless ways to create far more complex financial products. Earning the best possible returns from these building blocks, however, is a genuinely…
Read MoreDecentralized finance protocols face a problem that would be instantly familiar to almost any consumer business but that takes a particularly acute and unforgiving form in their world, the persistent challenge of keeping users around once they have first arrived. In traditional finance, customers tend to be quite sticky, since switching banks or brokerages is…
Read MoreIn decentralized finance, the relentless pursuit of yield, the return earned by putting idle crypto assets to productive work, has given rise to a whole class of tools designed to do that work automatically and optimally on a user’s behalf. Yield aggregators take a user’s deposited assets and automatically deploy them across various lending platforms,…
Read MoreCryptocurrencies are famous for their volatility, with prices that can swing dramatically within a single day, and this very volatility makes them poorly suited for many of the everyday uses that money is supposed to serve. A currency whose value might fall by a fifth between morning and evening is a difficult thing to price…
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