LDAS - Learn DeFi Africa Series is my way of giving back to the people. Many people want to learn about decentralized finance but don't know where to start, with a majority of newbies falling prey to criminal entities who cart away their money through scams like “mentorship”, “courses” etc. While I am not saying all who do this are bad, a healthy majority of them fall into the group of unscrupulous individuals. You will learn an immense ton of knowledge from this article and its successive releases. I will also link you to very helpful Twitter threads, YouTube videos and fellow teachers who will help your journey to becoming knowledgeable and profitable. Shall we now dig into the first course of the series?

It’s a sad reality that most people who venture into the crypto verse don’t understand the true purpose behind its creation. Understandably, many people accessed the crypto space purely to make a quick buck, after all, 2020 was a terrible year for a lot of people. The financial lack that was felt by people in my area was a really bad situation, and I’m speaking exclusively about my area in Port-Harcourt City. However, I believe that the lack of sufficient or even bare minimum knowledge about why cryptocurrencies are crucial to the common man has led to more financial woes for many.

You don’t have to look far back into history to understand what I’m talking about, just remember what happened back in April/May 2021. The crypto markets were booming, crypto investing advice from unimaginable sources was everywhere you turned too, moon boys were the new big boys in town, 1000x was the least any crypto should achieve if it wanted “investors”, WhatsApp status updates became predictably about the “blood money” that was making people millionaires.

THEN………

It was like a crypto apocalypse, China came with their bitcoin FUD and Elon Musk, then watching the market structures, dropped the bomb that sent the crypto markets into a nosedive. Bitcoin “dragged all of ‘em to hell”. There was blood on Binance, moon boys that quit their “jobs at McDonald’s” were left stranded with no money. At home, we laughed at the many voice notes and videos of people who had lost money to the May crash. While funny, the bitter fact was that a lot of people, uneducated about market cycles, technical and fundamental analyses and the basics of crypto, lost millions to the markets.

If more people learnt the basics about cryptocurrencies and blockchain technology before stepping into an unknown asset class (to me anyway), the losses would not have been that magnanimous. Well, people are slowly learning their lessons and I’m pleased about that. More people are searching for knowledge to place themselves in a better position for the future. For that future to be greatly secured, financial-wise, people need to have total control over their money, and learning about decentralized finance greatly boosts the chances that were once bleak for many. So, if you are keen on taking back control of your money, learning how to truly navigate your way through non-custodial trading and securing your future, then you must stick with me throughout this series.

What in the $BTC is DeFi?

Decentralized Finance, a.k.a DeFi, is an aggressive and disruptive “I spit in your face and you can’t do anything about it’ movement that is focused on eliminating the problems of traditional/centralized finance. The long-term goal is to eliminate the traditional financial system for good, though remember, this goal is long-term. It’s aggressive in the sense that it has come into the financial system of the world and has set itself as an indestructible and immovable form of finance; countries are now looking for ways to regulate it instead of trying to put an end to it. (e too stubborn, they no fit comot am. It’s here to stay).

As for it being disruptive, just look at Latin America. The USA and the USD have hurt the economies of most Latin American states. Their currencies have been devalued and inflation is rising, but their people remain poor. Families with relatives abroad get small sums of money from such relatives as remittances are tedious and expensive while banks take their share of the money that isn’t theirs. DeFi came in and disrupted this broad-day robbery. People can now receive money directly to their crypto wallets without any bank intervention. No need for annoying red tape and bureaucracy, and did you mention transaction fees? I’ll leave that to you to find out the next time you send money to your child schooling in San Salvador or Sao Paolo.

One US dollar compared to its equivalent in Venezuelan Bolivar. The destruction and decay of Latin American economies have led to them strongly looking to adopt decentralized means of finance. Photo via John Nwankwo.

For you to understand DeFi better and get a clearer definition of the subject matter, we will need to get a grasp on the traditional financial system and the problems it has brought that have led to the search for more decentralized and inclusive forms of finance. This can easily be achieved if we look at the largest institutions that exemplify everything traditional/centralized finance stands for and our next part, THE BANKS. In the second part, I’ll take you through the next question: “Why DeFi?”. You will read and grasp the reasons behind everything we see now in the blockchain and cryptocurrency industry.

Till next time.