FinTech

dCommerce Is Not Just The Next Big Thing, It Is Our Only Hope

Justin Banon, CEO and Founder of Boson Protocol, reflects on the DeFi boom of 2020 and where DeFi pioneers should be looking next

On New Year’s Day 2020, the total value locked in DeFi projects stood at $675.59 million. At the time of writing this piece, that figure has skyrocketed to $14.5 billion. Against the backdrop of the biggest bitcoin bull run to date, 2020 still emerges as the year of DeFi. However, this industry has seen ample instances of booming ecosystems soaring to incredible heights, only to go out with a whimper (see: the ICO boom of 2017). While adoption of the technology by institutional investors seems increasingly likely, nothing is a given in the blockchain and crypto world and despite all its glory, the future of DeFi remains uncertain. What is undeniable is that the DeFi boom was born out of consumers seeking a more equitable alternative to traditional finance, and this want has been fulfilled. DeFi pioneers must now turn their attention to what comes next or they will miss the boat.

Decentralized commerce (dCommerce) has been born in the same vein as DeFi, but the recognition of its potential is even more pressing. Consumers are looking for a fairer alternative to commerce, as the rise of mega-retailers has placed a stranglehold on commercial activity, squeezing out small town businesses and debilitating local economies. This exponential rise has occurred in tandem with the uptick in e-commerce adoption — a move that has been accelerated by five years as a direct result of the pandemic. As megaretailers reel in record profits, their monopolistic activities surge. Aside from the anti-competitive nature of these companies, their data practices are of increasing concern to governments and consumers alike, effectively dominating the online world and owning access to the digital identities of individuals across the world.

DeFi pioneers created a viable decentralized alternative to the overbearing and near-monopolistic practices engaged in by traditional financial organizations, in an effort to benefit consumers. Now, it is essential that they recognize the tsunami of centralized power in commercial activity and do something about it before it is too late. Decentralized commerce is the only viable alternative for equitable, cooperative, and fair commercial activity. The registration of actual physical assets to any given blockchain is already possible. Those at the forefront of our industry today that do not realize the immense untapped potential dCommerce offers will simply become pioneers of the past.

The adoption of dCommerce is not just a pursuit in nobility; the value propositions of this field are immense. Decentralizing commercial activity would allow for the elimination of intermediaries, proposing significant savings for both the consumer and the seller, however arbitration fees may disrupt the process and make the effort more costly than it is worth. This is where NFTs come into play. Non Fungible Tokens practically eliminate the need for arbitration, further adding to cost savings of all parties.

Our current system of commercial activity is rife with inefficiencies, biases, overly extractive data issues, and harmful monopolistic practices that put the future of our societies at risk. Is it adequate for most to conduct business as normal? Probably. But when has adequate been enough, especially for those in our industry that believe innovation fuels the possibilities of our future? The time has come not only for the industry to take the possibilities of decentralized commerce seriously, but to actively engage with and work towards the solutions that will make it a reality.

This debate is about far more than how we do business: it involves solving some of the great problems of our time. By embracing these possibilities now through the use of decentralized Web3 networks, we can revolutionize the way our societies and economies function. Monopolies fuel further monopolistic activities, and the larger megaretailers become, the more destruction is caused to our planet. By embracing decentralized commerce, we have the ability to rebuild our economy into a post-capitalist system that still embraces commercial activity but in an equitable and fair manner.

Casting off the chains of our current restrictive, anti-competitive, and monopoly-favoring system of commerce will not be a walk in the park. However, if the trajectory of the DeFi movement has shown us one thing, it is that with the incredible innovation our industry has brought with it, making what seems unlikely a reality is not only possible, it is practical. In the case of decentralized commerce, it is not only possible, it is essential.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.