One of Earnity’s main thrusts is to share decentralized finance (DeFi) products to everyone, as envisioned by its founders Dan Schatt and Domenic Carosa.
The term “decentralized” conjures images of a non-hierarchical society where individual liberty can flourish. That can be a difficult concept for many people to grasp, considering current financial institutions are hierarchical by design. Decentralization, however, isn’t the opposite of centralization; it’s a spectrum.
Decentralized finance is blockchain technology married to cryptocurrency that can facilitate non-custodial financial transactions that are peer-to-peer, i.e., they don’t require a third party to validate the transaction.
The financial services industry is due for disruption by a new generation of decentralized fintech companies because it’s currently controlled by centralized institutions that are not meeting the credit needs of large segments of the population. The numbers speak for themselves.
Marginalized groups linger at or near the bottom of every measurable economic metric. As a result, creditworthiness in these communities is at an all-time low. Consequently, for many people, financial inclusion means little more than bringing the underbanked into contact with predatory lenders that charge exorbitant fees.
But what would the world look like if finance is decentralized and design transactional systems were fair, neutral, accessible—and most importantly—did not give preference to any singular world view?
Furthermore, centralization vs. decentralization is a false dichotomy. “Centralized” doesn’t mean “all-powerful.” Every form of centralization has its internal logic that can be examined and challenged.
For example, the Federal Reserve’s power over interest rates rests on the assumption that universal constants in human behavior will always apply to everyone. Unfortunately, that assumption is wrong and has proven time and time again to be a dangerous one.
People change. Circumstances change. Cultures evolve. Opinions shift. Civilizations crumble. Technologies rise and fall — the fundamental constants of humanity are few.
And Dan Schatt and Domenic Carosa plan to help distribute power away from singular institutions and back into the hands of individuals via Earnity’s DeFi products.