Synthetix Founder: DeFi Makes Legacy Fintech Obsolete

Synthetix Founder: DeFi Makes Legacy Fintech Obsolete

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The founder of Synthetix believes that the DeFi ecosystem is realizing many of the promises that the fintech sector has failed to deliver.

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Synthetix Founder: DeFi Makes Legacy Fintech Obsolete

Kain Warwick, founder of DeFi derivatives platform Synthetix, argues that projects built on Ethereum can finally deliver on many of the promises that fintech failed to.

Despite ten years of development, Warwick said the fintech sector has been hamstrung by “trying to build overlays for the legacy infrastructure.” 

They faced issues with a lack of interoperability between the “siloed” systems of financial institutions, regulatory barriers to innovation, and the vast expenses associated with mainstream compliance regimes. He said:

“The promise of fintech over the last ten years has run up against all of these impediments and barriers to entry, and Ethereum really removes those.”

“Look at companies like TransferWise, where all of their effort is actually avoiding the legacy infrastructure — that’s just not a conducive environment to innovation,” said Warwick.

Warwick was speaking at a July 29 webinar, hosted by Melbourne cryptocurrency fund Apollo Capital.

Interoperability offers Ethereum agility

In contrast to the fintech sector, Warwick said Ethereum comprises an open-permissionless platform boasting inherent interoperability — where “once someone deploys some new piece of infrastructure, it is, by default, accessible to everyone else.”

“Some of the Synthetix contracts, for example, have been taken and integrated into new projects […] and that’s just not something that you have the ability to do in the fintech world,” said Warwick.

Warwick added that a capacity for interoperability with the existing legacy infrastructure is “required” if DeFi is to onboard significant users from outside of the crypto community.

DeFi adoption still ‘tiny’ outside of crypto

Despite his optimistic outlook for DeFi, Warwick noted that the DeFi space is still in its “very early phases.”

Noting that the popular browser extension Metamask has seen over four million downloads, Warwick describes its adoption as “amazing from a crypto perspective,” but is still “tiny” in terms of “real-world” engagement.

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