How This DeFi Platform Plans to Overhaul Traditional Finance

Piers Ridyard is the CEO of RDX Works. He sat down with Jessica Abo to talk about the developer of the public decentralized ledger core, Radix.

Jessica Abo: Piers, for those who are unfamiliar, first of all, can you tell us a bit about RDX Works and your work?

Piers Ridyard:

RDX Works is a core developer of a public ledger like Ethereum or Bitcoin or Solana. Ours is called Radix and is a public ledger solely focused on decentralized finance (DeFi).

Decentralized finance essentially builds financial products and applications on top of a decentralized infrastructure (blockchain) designed to make it easier for people to create things like assets and services, in a way that’s more digital than the current financial system we use today have.

So if you’ve ever heard of things like Ethereum – platforms that allow you to build solutions like decentralized exchanges, decentralized money markets, or decentralized financial products – that make it easy for people to invest, save, and trade.

It’s basically a new area of ​​technology. Just as the Internet was a new area of ​​technology in the 1980s and 1990s, so is this today – this new, revolutionary system that will allow you to replace current financial systems like banks and create a new way for people to build.

Why should we care about all this?

I often think about the current financial system, it’s a bit like an archipelago of poorly connected islands. So each bank has its own internal system, its own internal ledger. Every exchange has its own internal system, its own internal ledger. But actually, if you look at the banking system, a lot of transactions are done by Excel spreadsheets that are sent between companies to be reconciled because the systems don’t communicate with each other.

Now, a bit like before the Internet, people did things by phone or fax, but there wasn’t a single place to easily send information. And right now, there’s no truly unified place for you to create and move financial assets between companies. And that’s what this infrastructure is for.

And I know it sounds very simple, but it’s as simple as it was when we went from reading newspapers to reading online. It has been made possible by a number of new technologies and new platforms that have been created but could not have been created before.

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One of the great revolutions in decentralized finance is this ability to create liquidity around long-tail investments. So if you think about the current financial system, you will be like Apple; I can buy and sell Apple stock. But if you’re an entrepreneur and you’re building a business, even if it’s a relatively large company, your equity isn’t very liquid. Your debts are not very liquid. And that actually makes it harder to raise funds, it makes it more expensive to raise funds.

And that infrastructure makes it radically easier for people to access the financial ecosystem and do things that get out of the way of their business. It empowers entrepreneurs to do what really matters, which is build great products for people.

Where does Radix fit into the DeFi universe?

When Ethereum first came out, people didn’t really know what the purpose of these public ledgers was, what the idea of ​​smart contracts was. And so they started playing around with different products and services. But it quickly became clear that the real thing to use for these public books is actually decentralized finance.

However, Ethereum and Ethereum’s competitors are not really designed to build an asset-first platform. So we believe that decentralized finance will eat up the 400 trillion global financial system. It will move everything to public ledgers in the same way that all information was moved to the internet.

However, to do this you must actually build an infrastructure designed for the application to be built. And what we’ve found is that it’s really hard to build decentralized finance today. You see a lot of hacks, a lot of exploits, a lot of problems, all stemming from the tools that entrepreneurs have at their disposal to build with these systems.

So what Radix has done is we have spent the last three years collaborating with DeFi developers and DeFi projects to create an incredibly intuitive experience to be able to build these platforms and services.

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You can think of Radix as an operating system or as a platform on which users can build applications. We have developed a programming language and public ledger that makes it really intuitive for people to harness the power of this new breed of technology and makes it much easier for entrepreneurs who are thinking about starting a business in Web3, or starting one Starting a business in DeFi or starting a business in crypto to be able to go from idea to production code and shorten it from two years to around three months.

What is a smart contract in simple terms?

Smart contract is really a difficult term. Because it’s kind of a misnomer, isn’t it? From a legal point of view, it is not a contract. A smart contract is a piece of code that resides on a public ledger. The code itself can control money directly. So a simple example of a smart contract is if I have some Piers tokens I can send them into a smart contract. And the smart contract can say, okay, fine, if someone sends me 10 Piers tokens, I’ll send them 20 Radix tokens.

But the smart contract does it by itself. It’s not on a server running on AWS or anything like that. It is actually part of the public ledger. Now this superpower is crucial because it allows you to have more transparency about how finance works. Now when I go to a bank I send my money to the bank and the bank has its own ledger of whose money is what. And then I have to ask the bank to withdraw my money.

With a smart contract, all of this money exists in a ledger. And then all the code that deals with the logic of who can access that money, what that money can do when interacting with other applications on top of the ledger is managed directly by the logic of the smart contract itself.

So you can basically think of it as a program that resides on a public ledger and follows the rules for managing assets itself, without a company having to run it in the background.

Where do you think DeFi is headed? What are some of your predictions for 2023?

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I think 2023 will indeed be a year of consolidation. It will be the year when people learn the lessons of the events of 2021 and 2022 and find out what was the real value and what was created. Things like creating liquidity around long tail investments.

I think what you’re going to see in 2023 is a lot more real assets. So things like construction debt, things like corporate finance, project finance — these are all going to start getting on the public books. And you’ll see how what we think of traditional assets is merging more and more into this unified layer of financial products and services.

A lot of people talk about NFTs and Bored Apes artwork and stuff like that. It’s kind of a toy, but it’s toys that represent what is actually possible with this technology. And you will see more serious companies coming in and building things that are actually more exciting than the traditional finance sector but using all the tools and opportunities available from DeFi toolset like what Radix is ​​building.

Who do you think should get into crypto and who do you think should avoid it?

Everyone should take the time to study. Don’t necessarily dwell on that, that’s what my business will do in this area. Because we are still at the beginning. It is still the very early days of technology. But go and use Scrypto, our programming language that we developed to make it as easy as possible for people to get started with Web3 and DeFi. It’s a great way to learn about the tools and understand what the technology could mean for your business.

And that is the exploration that is needed now. This is where the entrepreneurs who really take this initiative will have the greatest opportunity for their business in the coming cycles. Because they have taken the time during this bear market to understand how the technology could be applicable to their business and how they can think about it to develop a long-term strategy of how their business will gain as a result of this toolkit, which is available to them.

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