Illusions can be tools. Money is a good example of this. The only reason it is worth anything or provides any purpose is because of our collective agreement in the illusion. Since it is essentially imaginary it can be “manipulated” in a variety of different ways to serve certain outcomes.
We have seen this in traditional financial markets for generations, where the most wealthy and corrupt people in our society have been responsible for “managing” the markets. This “managing” involves manipulating the financial illusion in the way that suits them best.
I have been thinking about this idea a lot this week in the context of Wall Street Bets and the growing Decentralized Finance (DeFi) industry. The situation that went down this week made it quite clear that the traditional financial system is a literal casino where the house always wins, if this fact was not already obvious.
The system has grown in a way to benefit those who are connected to the central points of control in the market, but what if the people who participated in the system were able to come up with their own financial instruments and constantly tweak the system to benefit the entire world instead of just a few people?
This sounds crazy, but if you start to research some of the things happening with DeFi, it's already happening. There is a building process with smart contracts that they are calling “Money Legos,” which allows developers to dream up all sorts of new financial instruments to benefit the common people.
Right now, it’s mostly only tech people that are able to take advantage of it but that’s because they are the ones building and testing a technology that is still in its infancy. This is normal with tech development, in the early days of the internet email was so esoteric that only geeks and hobbyists could figure it out until the user experience improved over the years. Also, if you aren’t a developer and not comfortable with the technology yet, you can join the communities online and contribute your ideas that way.
For example, DeFi and Money Legos have made it possible for people to receive what is called a “Flash Loan,” which makes it possible to get a short term loan without collateral or ID, something that was not possible in the traditional financial markets and brings new financial opportunities to underprivileged people. There are also platforms that give people an APY of up to 10% or more for holding their assets.
They are also developing “synthetic assets,” which allow individuals to be in control of their own tokenized assets and possibly even stocks, eliminating the middlemen and “market makers” that have caused problems this week. In fact, in DeFi, the exchange platforms like Uniswap and Sushiswap are owned by their communities and operated by technologies called an “Automated Market Maker” and an “Oracle.”
We can bend the illusion of money to suit ourselves, and people already are. What we saw this week with Wall Street Bets is a part of the decentralization of finance. They are a decentralized investment firm operating in the traditional financial space, but there is also a decentralized infrastructure being built that will be much more friendly to this type of phenomenon.