Today, as we navigate the new terrain of our post-pandemic world, we can see the financial losses have been unprecedented. The IMF noted that due to “The Great Lockdown,” the world’s economy can expect the worst economic decline since the great depression.
Total work hours lost during the pandemic was four times the amount of work hours lost during the global recession of 2008/2009. Working hours globally declined 4.6%, meaning 130 million full-time jobs in the fourth quarter were obliterated. The world’s unemployment shot up by 33 million, rising from 1.1% to 6.5%.
With these alarming numbers showing financial devastation, people worldwide have turned to their communities, banks and governments for help. Legacy systems of finance, especially antiquated physical banks with their siloed and slow processes, have been strained to meet the requirements of entire populations in need of loans, unemployment compensation and government stimulus. Emergency funds have been handled inefficiently, delaying crucial help to those in need.
In Crisis, Opportunity
As the Chinese character meaning “crisis” consists of the characters for “danger” and “opportunity,” those in the blockchain space have innovated in spite of or perhaps because of this crisis. The name of this latest financial innovation is DeFi or Decentralized Finance. Traders, as well as those seeking alternative income streams to our post-pandemic employment dearth are looking to blockchain platforms. As a result, staking cryptocurrencies, providing liquidity, lending, yield farming, and other financial participation across decentralized platforms has grown exponentially over the last year and a half.
This explosive DeFi market capitalization grew from $686 million on January 1, 2020, to $15.6 billion a year later. The Summer of 2020 served as the launchpad of DeFi. June 1, 2020, the total DeFi market cap approached $2 billion. Within a few weeks, it doubled to $4 billion, and by August of 2020 it had doubled again. DeFi’s 3,400% growth in 12 months is a clear indicator of the intense acceleration of the DeFi space globally. At the time of this writing, the DeFi market cap is $82.39 billion.
For some perspective, the Bank of England estimates the global leveraged loan market at $2.2 trillion. The global peer-to-peer (P2P) lending market today, however, is relatively small, at $67.93 billion. However, it is expected to reach $558.91 billion by 2027, rising at a CAGR (Compound Annual Growth Rate) of 29.7% from 2020 to 2027.
Research from late March 2021 shows DeFi as the fastest-growing sector in the blockchain space. The total value of DeFi locked (invested in some way on a DeFi platform, such as staking or contributing to a liquidity pool) has tripled in 2021 thus far, despite the recent Bitcoin and Ethereum-led major market correction of a wild bull run that left many traders stunned, taking almost $1.3 trillion from the total cryptocurrency market cap. However, on May 24, 2021, some DeFi token prices increased by more than 60% as BTC climbed back up to its $38,000 level.
There is, however, a disconnect here. In a new world of opportunity largely created by the innovations of DeFi, why is it still so difficult to move funds from the virtual realm of DeFi platforms back to our tangible world of fiat, goods and services? Why are these activities so disconnected from the world of DeFi, and therefore challenging to manage?
Legacy banking built on a distinctly siloed and compartmentalized structure offers no real solutions. Processes decades and sometimes centuries old are inflexible and unwieldy when it comes to progressive change. Bureaucracy and the red tape that comes with endlessly complex corporate power structures are still as prevalent today as they were years ago.
A Bridge to the Everyday World
This question was the spark that drew Jason Blick, CEO of EQIBank (the world’s first global digital bank), and Brad Yasar, renowned blockchain advisor and angel investor, to innovate a bridge between banking and DeFi. With this idea, EQIFI was born.
Brad Yasar, CEO of EQIFI, explains:
“We see the problems people are experiencing. With DeFi, it was mostly not being able to access the value people create with DeFi projects. I met several people who created millions of dollars worth of value with their projects, with their investments, but they couldn’t access any of it in their daily lives, which to me felt unfair and problematic. With DeFi, it’s difficult to make that journey from a liquidity pool where you have an LP token to the native token to Ethereum or whatever the Blockchain token is. Then to convert it to fiat and then get that fiat into your bank account, you need to jump through at least three, if not four or five hoops.”
Creating a solution to this disconnect brought Mr. Blick and Mr. Yasar to work together. Today, EQIFI, powered by EQIBank, is a decentralized protocol for pooled lending and borrowing for ETH, ERC-20 tokens, Stablecoins, wBTC, USD, GBP, and EUR. It provides a single uniform platform for DeFi products operating seamlessly when connected with users’ EQIBank accounts.
EQIFI also provides a complete, community-governed, single interface DeFi solution where users may manage their banking, trading, and lending services for fiat and cryptocurrencies. This brings a new level of efficiency and ease to the DeFi space as we know it.
Explore and experience this connectedness and uniquely holistic approach to finance for yourself at EQIFI. Especially in these uncertain times, the confidence and security of a truly comprehensive financial platform becomes even more important.
DeFi is still early in its development, yet the market is evolving at an incredible pace. The signs thus far seem all too clear for DeFi to play a leading — if not essential — role on the world’s financial stage. The show will go on with DeFi, with EQIFI providing the perfect platform for outstanding performance. The curtain rises. A star is born.