Decentralized finance (DeFi) has been nothing short of a miracle. For the first time ever, anyone with a simple internet connection can build wealth digitally. People in all parts of the world, regardless of their financial status or location, are bettering their lives through DeFi by making the same kinds of investment decisions previously limited to professionals. Not to mention that DeFi is cheaper and more transparent than traditional methods of financial transactions.
Former U.S. Federal Reserve Board Chairman Paul Volcker once famously quipped that the only financial innovation he could think of that actually improved people’s lives was the ATM. I would add DeFi to that short list.
Emin Gun Sirer is the Founder and Chief Executive Officer at Ava Labs.
Traders are noticing the benefits: aggregate DeFi revenue is expected to grow at almost 20 percent annually through 2027. DeFi’s Total Value Locked is roughly $63 billion, and reached as high as $200 billion during the last bull market.
Like any new technology, however, DeFi’s growth has come with its share of painful experiences, which have kept many would-be participants on the sidelines. But remarkable progress in artificial intelligence (AI) gives me hope that it will be the catalyst for DeFi to continue its evolution.
In my opinion, many of the impediments to broader DeFi adoption can be lumped under the term “liquidity” – the ease with which an asset or security can be converted into cash at market price. Liquidity is a complex, multidimensional issue, but, fundamentally, it’s simply about enough people wanting something that it makes buying and selling as simple as a click.
AI can improve liquidity in the DeFi market. While DeFi is global, more can still be done to encourage adoption, as there are many barriers to understanding like language and coding fluency. If a DeFi protocol’s documentation is written only in English, for example, it’s certainly more difficult for non-native English speakers to engage with the technology. This is where AI-powered Large Language Models (LLMs) come into play: LLMs can be used to instantly translate documentation into different languages, as well as provide “live” customer support for the whole world. LLMs will make DeFi truly global.
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