Entrepreneurs say they’re racing to build a better version of banks, trading firms and insurance companies, using blockchain technology and decentralized networks in concert to cut out rent-seeking middlemen; projects are supposedly controlled by “autonomous” governance systems. It’s all part of the industry spirit, which often seems like it’s live, but is still in beta and using real money.
And the sums are getting larger, fast. An index of 11 DeFi tokens created by the cryptocurrency exchange FTX has more than doubled in the past two months. Total value locked in DeFi systems, the most common way of measuring their success, has surged almost 10-fold this year to $6.8 billion, according to the website DeFi Pulse.