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Autonomous Finance @Stanford
The document discusses the emergence of autonomous finance, emphasizing the disruptive potential of blockchain technology and decentralized finance (DeFi) in challenging traditional banking systems. It highlights the barriers posed by regulatory monopolies and the inefficiency of intermediaries, leading to calls for democratized and accessible financial services. The author envisions a future where financial access is universal, facilitated by autonomous protocols and smart contracts on platforms like Ethereum.
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Autonomous Finance @Stanford
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- 2. ….….…… ….….…… ….….…… ….….…… ….….…… ….….…… ….….…… ….….…… ….….…… ….….…… 2 we all knowsoftware eating the world the new tech middlemen rise as the old fade away
- 3. 3 similarly fintech unbundlingbanks startups offer better, cheaper and faster financial services “in an app” source: cbinsights
- 4. 4 … yet banksstand mostly unchallenged PayPal: 44B Wells Fargo: $250B Bank of America $136B Goldman Sachs $66B Lending Club Wealth Front
- 5. 5 protected by thegreat wall of regulatory monopoly Regulatory Barrier Top of the Food chain Free Money Wire | ACH | SWIFT App fractional reserve massive bailouts Money transmitter Broker/Dealer MSB Clearing e-Money Banks Broker | Clearing Exchange
- 6. 6 from 2000 to2011: cost of running Internet application went down 100x … but not financial services.
- 7. why don’t wejust build better banks? 7
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- 9. 9 paypal nokia producer vs. middlemen thefate of dragon slayer <in search of George Orwell in Burma> uber AIG BoA wealthfront toyota gold dealer
- 10. 10 1/ middlemen alwaysmaximize rent-seeking 2/ regulatory barrier worsen them 3/ they control gateway to wealth equality 4/ innovation stagnates w/ middlemen
- 11. 11 finance should bepart of public infrastructure
- 12. 12 a robotic financialinfrastructure which is: unstoppable | tamper proof | democratized
- 13. 13 enter ethereum: theworld computer 1980 1990 2000 2005 2010 2015 Ethereum Bitcoin IBM PC www decentralized centralized aws bittorent world’s decentralized file network world’s decentralized ledger world’s decentralized computer world’s centralized cloud of million servers computer for everyone connecting world’s computers
- 14. 14 allowing access toglobal mirror assets mirror | liquidity AUTONOMOUS FINANCE TRADTIONAL FINANCE LOCAL “PHYSICAL” Equities & Commodities GLOBAL MARKET NATIVE & MIRROR ASSETS 14 D-BT NASDAQ: Apple D-AAPL LONDON: BT D-BOND-1 DTCC: $1.6 QUARDRILLION EUROCLEAR: 633 TRILLION
- 15. 15 makes possible: aglobal permission-less financial protocol Decentralized applications / smart contracts Ethereum world computer autonomous finance protocol developed by string, partners and contributors controlled by community consumer | developer | trader
- 16. 16 from banker financeto autonomous finance autonomous finance protocol custodianship p2p exchange p2p margin lending automated market making bond issuance & collaterlization DTCC NASDAQ eTrade market makers investment banks
- 17. if autonomous financeavailable for everyone, what happens? 17
- 18. 18 1 financial access foreveryone, free
- 19. 19 Micro loan Micro investment Free Remittance AFreedom 251 smartphone, priced at 251 rupees (less than $4) 3/4 of the world’s poor do not have a bank account, not only because of poverty, but also due to costs, travel distance and paper work involved.”
- 20. 20 finance 1.0 separate systems,jurisdictions and markets Broker Exchange Banks 1970s & Before 5 days settlement
- 21. 21 finance 1.5: industrynetwork monopoly layer upon layer of intermediaries Transactions increase More intermediaries emerge Complexity & Customer Costs explode DTC E-TRADE NASDAQ BNY Mellon NUMEROUS & EXPENSIVE INTERMEDIARIES Wire/ACH EUROCLE AR 1980s - 2015 3 day settlement DTCC: $1.4 QUARDRILLION EUROCLEAR: EUR 633 TRILLION Commission Spreads Interest on Floats Front-running High-frequency trading Gated entry- barrier
- 22. 22 2 asset becomes thenew cash
- 23. 001.30 Facebook! VALUE $146.9Dusd 1.6 BTC +4.5% 000.09 Gold Ounce! VALUE $119.07 Dusd 0.59 BTC -1.3% +! Send! Recv.! 1302.1 Dusd Available for buying assets !! 081.17 Fund – Zabel...! VALUE $110.73 Dusd 0.52 BTC +9.7% 012.23 Google! VALUE $7,704.9 Dusd 32.78 BTC +0.8% Programmable & configurable… Steady interest through margin lending coins Global stocks & commodities. Fractional assets Automatically spend from your overall balance 23 liquid asset wallet blurring the line between asset and cash
- 24. 24 3 public market convergingwith private market
- 25. 25 Top 20 dealsused to be mostly IPOs now they’re almost all private source: a16z Under US Securities Act, startups can only solicit and take investments from accredited investors ($1m+ net worth). That excludes 97% of Americans from startup investing.
- 26. 26 4 everyone’s voice inworld financial system
- 27. 27 5 engineer become newbankers wealth are just “symbolic objects”
- 28. Autonomous Financial Platform(inc. global “mirror” D-assets & smart contract API) I can easily program any financial system using autonomous finance and smart contractsCODE ! REGULATORY SYSTEM ABC REGULATORY SYSTEM XYZ EXCHANGE NMO EXCHANGE RSV DARK POOL NMO 28
- 29. 29 6 new world currencyemerge
- 30. 30 autonomous finance launch -q3 2016 What would you like to build on autonomous finance?
- 31.