A “killer app” can be considered an application of great value that ensures the success of the technology associated with it. In short, the killer app is when its underlying technology is widely understood for the first time, opening the floodgates to mainstream adoption.
For example, email is widely considered the internet’s first killer app, and the web browser is the second. At the time, these two killer apps were the only reason the general public wanted to get their hands on the internet.
Now, cryptocurrencies face the same conundrum as the internet in the early 1990s: finding the killer app. Like the internet at the time, cryptocurrency was not comparable to previous technologies, which made it harder for ordinary people to understand its basic concepts because they had no relevant reference point to help understand it.
It’s easy to explain Snapchat in terms of Facebook. It is also feasible to explain cloud storage by referring to local storage. But explaining the true disruptive potential of cryptocurrencies is another matter entirely.
DeFi: The ‘Unlucky’ Killer App in Crypto
There is no doubt that DeFi is our answer to a more open and inclusive financial system. A connected device is all you need – no gatekeepers, no intermediaries, no prejudice against race, gender, location, and more. Individuals fully own their assets, i.e. no one can freeze personal assets and no one can censor personal transactions.
While this premise is very clear to most of us, the idea of ”unbanked money” simply cannot be understood by others. Explaining in terms of consensus mechanisms won’t help either and will only alienate them further from cryptocurrencies.
Imagine a scenario where a first-time cryptocurrency user wants to participate in Aave’s USDC lending pool. First, he needs to create a wallet. Then, he needs to buy ETH from CEX and mention it in this wallet. Then, he needs to buy USDC from CEX and mention it in the same wallet. Once both his ETH and USDC reach his wallet, he goes to Aave’s…