Elastos Co-Founder Sunny Feng Han: DeFi’s Rise is Inevitable
Translated by YY.
Edited by Kenneth K
Original article: https://mp.weixin.qq.com/s/Olz4n5g5R7fIXpgPIN8MfQ
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August 17 – Elatsos Co-Founder, Sunny Feng Han, was invited to participate in the “DeFi – Digital Finance Breakthrough” community event organised by Block Finance.
The Elastos community began DeFi development as early as 2019 and is now undergoing significant improvements. At the same time, Elastos Ethereum sidechain is being optimised and upgraded, and it will provide a more stable and improved user experience. It is expected that the Ethereum sidechain will soon become an infrastructure that can fully integrate with DeFi projects seamlessly.
“Hello, everyone! Thank you very much, Shi Yanqing and Block Finance, for your invitation. Today I will share with you the latest hot topic – DeFi.
“During the second half of this year, I am publishing a new book called, ‘The Wealth of Nations with Blockchain’. I spent most of my time writing this book these last two years. The gist of this book is this: Wealth is not a tangible thing, but a global credit consensus.
“The global free market as a distributed trading system must have credibility. Otherwise, it would remain as bartering. Therefore, credibility must be a cognitive process of abstraction and is part of the revolution in human cognition. For example, from the earliest trading of shells to the current gold and silver, it is not that they have consumption value, but humans have reached a consensus on wealth in these metals.
“Likewise, there was a time in China’s history that the world was once led by China to reach a global wealth consensus based on silver, that is, the Silver Age. However, due to inconvenience arising from the real payment scenario, the Chinese government issued Yuan Datou Silver Dollar. Although Yuan Shikai failed politically, Yuan Datou Silver Dollar was relatively successful in the financial system. Today, China has reached a huge wealth consensus relying on real estate, and China’s entire real estate market is worth about 65 trillion U.S. dollars.
“Of course, real estate is unlikely to enter into direct payment scenarios, and its liquidity is also poor. For real payment scenarios, there must be financial services that involve mortgage loans, which are the same emerging principles of finance in DeFi.
“We are entering the blockchain era of wealth which relies on personal data as a focal point to reach a consensus on wealth. The need for stablecoins is not to be ignored. Wealth consensus is best anchored with the legal currencies of various countries in the markets. Stablecoins are the most convenient way to make payments and decentralised exchanges are, of course, indispensable.
“Wealth consensus is based on digital assets with the best liquidity on the global blockchain, which is relatively better than any traditional securities market. This is why digital assets led by Bitcoin are reaching such a high wealth consensus at the current stage, and so the need for decentralised transactions as well as the development of the entire industry is inevitable. If a wealth consensus is formed, other financial services will be needed and so DeFi has become this hot movement in the current blockchain space.
“It is not as simple as most people think or a mere market bubble. It is the inevitable development in the blockchain wealth consensus.
“Next, I will focus on Elastos. In fact, the layout and strategic planning of DeFi on Elastos started as early as 2019. A community team led by Wang Ding started working on DeFi and built a project on the Elastos sidechain. The design at that time was still relatively centralised. It is now being thoroughly optimised. As for Elastos, the most fundamental thing is that it has an Ethereum sidechain currently undergoing a comprehensive upgrade. It is to be upgraded to a very stable and user-friendly state by next month. You will see an infrastructure that can be fully integrated with DeFi projects.
“Everyone often speaks about the bull market that may come in the future. My personal opinion is that we are still very early in the bull market. If everyone talks about a cryptocurrency that can potentially 100x in price, its market capitalisation of, say, 10 billion U.S. dollars would be something too good to be true. I believe that a future bull market is confirmed when the overall market capitalisation hits several trillions of U.S. dollars; otherwise it isn’t a real bull market.
“At that time, cryptocurrencies that can 1000x in price will have definitely emerged. It has been shown that a large number of new Internet systems and business models based on the traditional Internet have been ongoing outside the blockchain space, and their user base is far greater than that of the current cryptocurrency space. However, the most fundamental thing is that they will eventually be decentralised in order to participate in the global wealth consensus.
“This is my real purpose of writing the book, ‘The Wealth of Nations with Blockchain’. According to the recent Chinese government’s speeches, many local governments plan to use blockchain for certain assets which are scarce–for example, Yunnan black tea. In fact, there are many similar scarce assets that lack market liquidity. So, as for whether or not a very large wealth consensus can be formed in the future in the same order of magnitude as that of real estate, I think it is very likely to happen in the future.
“Therefore, the most fundamental thing is that the next bull market must be able to attract people outside of cryptocurrency space, that is, mainstream traffic and users on the Internet must be attracted to digital assets on blockchain. Depending solely on the current user base and capital investment within existing cryptocurrency spaces are not sufficient to trigger the next massive bull run. This is the point that I want to share with you today.”