Will DeFi Take Down the Stock Market?

Ah, the stock market. The best place for the 1% to make their riches and leave the average guy holding the bag. From a young age, we’re told that investing our money is the wisest financial decision we can make. And believe me, I do think investing is important. The system is just unnecessarily complicated and elitist.  But what if I told you it didn’t have to be this way? With the advent of DeFi, blockchain technology has evolved enough to disrupt one of the most outdated fortresses of the traditional financial system. 

Stock Market: a Casino for the Elite?

Over the past few decades, we have made massive progress as a society. However, we can’t let that progress blind us to the harsh reality. We’ve got so much further to go. Just because something has been around for ages, doesn’t mean it’s the best solution. It’s just the solution that’s making the most money for those in power. The stock market has remained stagnant since its inception in the 1700s. So, there’s NO WAY it’s actually benefiting the average person. It just benefits the modern aristocracy. 

There’s no other way to put it. The stock market is one of the least inclusive ecosystems on the planet. Multinational corporations, investments firms, and the extremely rich dominate the stock market. A regular person (or a small company) can’t succeed there.

First of all, trading stocks requires you to be a licensed stockbroker. Right from the start, the system doesn’t allow 99.9% of people to personally buy and sell stocks. This forces people to rely on third-party intermediaries. 

Opening an account at a professional stock brokerage house is very costly and confusing. Let’s be honest. It is simply something that most people wouldn’t do, especially the younger generations. Small retail investors flock to stock trading apps because it’s the most convenient option. But, at the end of the day, banks and financial giants still own these apps. And they don’t design them to let the average Joe become a millionaire – as attested by the recent GameStop affair.

Will DeFi Make the Stock Market Obsolete?

Because of the numerous problems with the traditional stock market, many startups and new companies are starting to ask themselves: why even bother? 

For decades, companies were forced to participate in the stock market ecosystem simply because there was no other alternative to earning capital. But as DeFi grows in prominence, the need to utilize the stock market to find investors might disappear. 

DeFi has exposed the fact that the traditional system is rigged to only benefit the 1%. And this happens at the cost of everyone else. From individual retail investors to small and mid-size companies, the stock market starts to resemble a casino. The house always wins.

house always wins

Decentralized Finance has already caused irreversible disruptions to the world of finance. And finally it looks like there might be an alternative to going public on the stock market: launching a company token. It’s more efficient, more secure, and fairer to all the participants in the ecosystem, investors included.

The world of DeFi is democratic, inclusive, and open. Passionate, innovative entrepreneurs can raise funds for their company or project in an immediate and efficient way. Those who want to invest in groundbreaking technologies of the future can do so without asking anyone for permission. No fuss, no barriers to entry. 

Thanks to DeFi, this closed ecosystem of investing, once a playground for the elite, will become a more affirmative space for everyone who wants to participate in it. It’s a return to the roots – what started as a free market is becoming free again. DeFi liberates independent actors on the market.

Unfortunately, this opportunity isn’t just clear to us. This is one threat that governments can’t ignore. The idea of having their power taken away is just too overwhelming. So, as DeFi continues to take flight, and tokens become more common, you’ll see governments fight to maintain their control. For example, the U.S Securities and Exchange Commission is quick to call out any risk of fraud and manipulation. However, they will turn a blind eye to the obvious manipulation that runs rampant on the stock market. 

Their blatant attack on progress makes it even more clear that we need autonomy. Aren’t most people smart enough to know the difference between a good opportunity and a hoax? For the time being, most companies are afraid to take on the regulators. However, I think in this David and Goliath story, we won’t stay down for long. 

There’s a reason why there are so few public companies in the crypto and blockchain industry. It’s because we’re confined to a system that isn’t a perfect fit. Companies like NetCents are trying our best to keep up with ever changing rules and expectations. And, I’m not going to lie, there have definitely been some hiccups. This is inevitable when you’re trying to fit something groundbreaking into a system that a few rich white guys designed hundreds of years ago. All I can say is that I appreciate the loyal investors who have stuck with us. It hasn’t always been an easy road, but I guarantee that we haven’t even scratched the surface yet. 

The Future of Finance Looks Promising

Let’s be clear here. DeFi might not completely replace the current stock market ecosystem. It doesn’t have to. What’s more probable is that people will force the stock market to evolve if it wants to keep up.

Yes, the old stock market will definitely have to recreate itself. It’s already obvious that it can’t compete with solutions that have embraced technological innovations. 

The stock market is a closed world, with very high limits for entry. Only the whales and industry leaders can truly benefit from it, while retail investors and smaller companies have to struggle to keep afloat. The traditional stock market’s motto can be summed up as “survival of the fittest”.

Decentralized finance is not only a technological breakthrough. It’s a paradigm shift. In the world of blockchain and DeFi, everyone can have a go at it. The financial system can finally become a force for widespread innovation, in which anyone can increase their financial status. Nobody needs to be left behind.

In the entire history of the economy, the closed and outdated systems are always replaced with the more innovative, open, and inclusive ones. No matter what happens, DeFi is here to stay, and the stock market has to decide: adapt or die?

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