From: thepipeline_xyz
Crypto aims to solve real-world problems, with a focus on empowering users through self-sovereignty and financial independence [00:00:11].
Core Tenets: Self-Sovereignty and Permissionless Access
Early engagement with crypto, particularly from 2013 onwards, was driven by a strong libertarian viewpoint [00:00:35]. This perspective held that traditional banks were irresponsible with money and the state of the world [00:00:48]. The concept of self-sovereignty was seen as a powerful tool, emphasizing the ability to have full control over one’s money, pay anyone as desired, and interact permissionlessly [00:00:58]. This thesis, that the space matters for permissionless access and self-sovereignty, remains a foundational principle [00:01:20].
Crypto seeks to disrupt traditional money, banking, and the financial industry, which is considered a significant enough problem to solve [00:01:33]. The evolution of technology, including programmable smart contracts, has enabled the creation of more interesting financial primitives and structures that can be broadly useful [00:01:41]. In doing so, crypto unlocks numerous other empowering possibilities [00:02:06].
Real-World Applications and Disruptions
Payments
Payments are a key area where crypto offers clear advantages [00:02:30]. In the Western world, credit card companies charge substantial fees—around 3% of every transaction—which imposes a significant cost on businesses, both small and large [00:02:40]. This market, represented by the combined market caps of Visa and Mastercard, is a trillion-dollar business that extracts a large sum primarily from small and medium businesses [00:06:21].
Crypto provides a way for individuals to pay for services using their phone, bypassing these middlemen [00:03:40]. In parts of the world where credit cards are less common, crypto, especially Tether, is already widely used for payments [00:03:54]. For crypto to fully disrupt payments, networks need to achieve transaction scales comparable to current payment processing systems [00:04:22]. Monad aims to be such a network, capable of 10,000 transactions per second (TPS) throughput [00:04:32].
Personal Finance
Personal finance is another area where crypto can deliver substantial value to end-users [00:04:43]. The goal is to make Decentralized Finance (DeFi) the standard for activities like banking, trading, borrowing, and lending [00:04:51]. For this to happen, crypto systems must offer an experience equal to or better than centralized personal finance tools [00:05:05]. This requires:
- Reduced slippage: Moving from frequent 1-5% slippage in DeFi to single-digit basis points [00:05:27].
- Improved execution costs: Making the cost of on-chain trading comparable to or better than centralized environments [00:05:16]. These improvements necessitate a highly performant environment that allows market makers to quote tightly and compete effectively, leading to a much better execution experience for users [00:05:35].
Broader Settlement
Beyond payments and personal finance, crypto holds potential for broader settlement processes [00:05:57]. This includes settlement for stock trading and the transfer of assets like houses or cars [00:06:01].