The world doesn't need banks, policymakers or NGOs - what it needs is DeFi

Where I grew up, down the border in Texas, there was a huge influx of people coming to the US to work and send money home. They don't make a lot of money, but they pay a sizable transfer fee. Their focus is not to get rich, but to make money to send back home. They do hard work day in and day out to support their families. They paid too much to do this.

To be honest, my father was a migrant worker. He is picking fruit in the field. Migrant workers send money back to our families in Mexico. But remittance providers eat up the little money they can make, so they don't live the American dream and see no hope of prosperity.

The world needs DeFi because of corruption. Big government and international corporations are not for the benefit of the people, but to grab the hard-earned money of the people. Credit cards and personal loans are expensive, as are money transfers.

Migrant workers are a significant source of external income for many developing economies when they send a portion of their earnings back to their home countries in the form of remittances. International remittances, which are especially important for low-income countries, account for almost 4% of their GDP, compared with about 1.5% for middle-income countries. Remittance flows are important because they are more stable than capital flows and tend to be countercyclical, meaning that remittances increase during recessions or after natural disasters that reduce private capital flows.

DeFi makes it cheaper for migrant workers to send money home, saving them billions. Some remittances require a fee of more than 20%. Out of desperation, people have to pay these fees, sending a significant portion of their income back to families in Africa, Asia and Latin America, helping families escape poverty by providing financial stability.

Hundreds of billions of dollars are sent home every year. This far exceeds official development assistance. Most remittances go to low- and middle-income countries. In Kyrgyzstan, Nepal and Liberia, remittances account for more than a quarter of GDP. According to the UNESCO Global Education Monitoring Report 2019, the average cost of sending remittances is 7%. Additionally, traditional banks charge the sender the most fees. Their average fee is 10%! Big banks monopolize remittances and extract profits from remittances. To serve the financially underserved, what the world needs is not banks, policymakers or NGOs, but DeFi.

money transfer highway robbery

In my opinion, centralized finance unfairly preys on immigrants who are simply using their own money. This is why the world needs decentralized finance. There is no reason to pay fees when transferring money. Then don't pay. Use decentralized finance instead of paying huge fees when sending money home.

When I started learning about decentralized exchanges, I knew that no one can take your money from you because you own your keys. You can borrow, borrow, trade on margin and more. DeFi plus stablecoins is a powerful combination, especially for the unbanked.

Thanks to cryptocurrencies, not only can immigrants send money to their loved ones back home for less, but those back home can now earn passive income in the decentralized finance space. They can leverage reward systems like liquidity pools or staking and see the power of truly being their own bank. No need to hand over your hard-earned money to middlemen, namely banks. You also don't need negative interest rates.

DeFi projects are built to benefit others. Participants can earn profits that benefit others. Thanks to decentralized finance, food is on the tables of people around the world. It's a beautiful thing. The sense of community in DeFi comes from giving power back to the people. It pushes us all to do better for ourselves. It makes all of us better at doing good. As we strive to improve ourselves, we also improve those around us. Healthy competition drives us all to thrive.

DeFi provides a trustless environment where transactions are governed by smart contracts. Blockchain technologists are rethinking and redefining finance before our very eyes.