DeFi Jobs and Bitcoin Maximalism

Decentralized Finance or DeFi is a topic of interest for me mainly because it has to do with my current employment. The prospect of DeFi-Jobs created with the advent of a new sector enthralls many in the cryptocurrency industry. But Robert Farrington of Forbes.com, captures the attitude of many when he said, 

"If you're not into cryptocurrency, then the mere mention of Bitcoin or Ethereum probably makes you want to roll your eyes."

 Many detractors from within the cryptocurrency community can also have aversions to DeFi, primarily

"DeFi Yield Farming" is a game for those who understand complex smart contracts to extract value from those who do not.

— Jameson Lopp (@lopp) November 2, 2020

The reasons for these are diverse. In my foray into the world of Crypto Twitter, there is such a thing as "Coin-Envy" and "Coin-ism". Perhaps the best term for this behavior is Bitcoin Maximalism. It stems from a belief that only Bitcoin (BTC) is the sole cryptocurrency that bears any significance both in technical and ideological aspects. 

DeFi Comes Primarily from Ethereum

Ethereum is considered the second most popular and valuable cryptocurrency, Ethereum "evolved" from Bitcoin's technical puritanism. Today, March 26, 2021, Bitcoin-BTC's market capitalization is $996,759,252,067. Ethereum is at $187,808,165,373. 

I remember briefly back in 2017 when people believed that Ethereum would surpass Bitcoin. They termed it the "flippening". However, that didn't come to fruition. It ended badly for cryptocurrency traders who took a position in Ethereum.

Doubts About DeFi

There are sectors that offer more than the usual rancor against DeFi. This includes government regulators. From the eyes of regulators, DeFi is simply another method of obfuscation hiding beneath the mantle of blockchain innovation. 

Some DeFi services allow users to borrow against certain cryptocurrencies. This becomes problematic whenever a specific cryptocurrency is described as a security or a commodity. Last December 2020, the SEC recently filed a case against Ripple for Conducting an Unregistered Securities Offering. 

What are the legal implications when a borrower uses XRP (seen as a security by the SEC) as collateral in a loan? 

LedgerInsights.com quotes SEC Commissioner Hester Pierce, 

"Often, people aren’t really thinking about regulation until there’s actually a problem. And then when there is a problem, they really want there to be a regulator to go to. And they really want there to be a way to reverse the bad thing that happened,” said Peirce." 

How would this affect DeFi-Jobs?

DeFi-jobs arise out of DeFi platforms. DeFi platforms need investors in order to be sustainable. Investors who are highly risk-averse would tend to avoid the risks associated with government oversight or even the seizure of assets. This narrows down the number of investors to:

• High-Risk investors
• Extremely-High-Risk
• Speculative investors

This creates an unstable business environment. Despite the instability, the demand for these is high especially with newly minted millionaires who were able to capitalize on Bitcoin's monumental gains this year. 

We believe that DeFi would continue to innovate against these challenges. If DeFi, would cease to be viable, then there would be fewer DeFi-jobs.