Well, there's currently 14B of value (not settlement) locked in decentralized finance https://defipulse.com/. So I'd say a significant portion of Ethereums settlements are for productive activities within this ecosystem by providing liquidity for financial primitives, like borrowing, lending, swapping, leverage and derivatives.

Sure, financial primitives that are mainly useful for speculation, very sketchy tokens, and various scams. $14B of FOMO can rapidly turn into $1B or $100M or $1M if/when the bottom falls out.

It's an open permissionless system, so of course the low hanging fruit is going to be speculation, sketchy tokens and scams. These require the lowest effort. It's the exact same thing in the traditional financial system.

Speculation is very important value-added activity in any system. In my opinion anybody who couples speculation with scams and value-destroying activities together loses credibility.

Speculation that isn't coupled with indicators of a productive economy is a complete scam, like this is.

So... within the ecosystem, not outside of it. Meaning people aren't actually purchasing services or goods or generating activity outside of this ecosystem beyond inflating its value for development for uncertain ends.

It's one big ouroboros.

The worlds two biggest financial primitives are borrowing and lending. These two primitives make up a large portion of the total financial activity in the worlds markets. It allows all other financial primitives to exist. As an analogy to programming, borrowing and lending is essentially the lowest level on the stack, where all other financial primitives are built on top of. In order to have derivatives, insurance, funding, etc. you need liquidity and borrowing and lending. DeFi on Ethereum is replicating the existing financial system, so by criticizing this, you're essentially also criticizing the legacy financial system.

Now that there's tons of liquidity on Ethereum, people have been building applications ontop of this financial stack. In the programming analogy, these applications are higher up on the stack (like web browsers) and rely on the primitives to build out financial infrastructure.

> DeFi on Ethereum is replicating the existing financial system, so by criticizing this, you're essentially also criticizing the legacy financial system.

Checkmate nOcOiNeRs. If you criticize my pyramid scheme network, you're actually criticizing the complex global financial system, because r/ethereum told me they're basically one in the same.

How many mortgages are settled at any level of the "financial stack" with DeFi? None.

How many bond payments have been paid out at any level of the "financial stack" with DeFi? None.

How many registered securities have been traded with DeFi handling any level of the "financial stack"? None.

If you want to use your "financial stack" metaphor, DeFi is like using a bluetooth smart dildo bootloader as the back end for a full stack web application. Sure, the stack you speak of exists, but there is nowhere that any programmer would ever seriously think to put that thing.

Stop arguing semantics and actually point to a legitimate use-case that someone outside the crypto space would have for DeFi (even if it is at a "lower level" of the fin stack).

Santander bank has settled at least 20 million in bonds directly on Ethereum (shorturl.at/lnFNV)

The applications you're talking about require infrastructure first. That's like criticizing devs in the 90s that an app like Netflix doesn't exist yet. Hmm I wonder why Netflix wasn't viable in the 1990s.

As for a simple "primitive" use case, I have a lot of my cash savings in DAI and I get 4% interest on it. There are a multitude of other use cases, if you care to look.

But you don't care, because it's obvious you think it's all just a scam, so there's no point even discussing any of this with you.

It's obvious that it's mostly a scam because the number of crappy altcoins, the number of wallets that ended up failing because they were criminal fronts or scams, and the absolute failure to demonstrate even one killer application show the reality of this.

I'm wondering how much of those coins that accrue "interest" you'll actually be able to offload into cold, hard cash that can be used to purchase goods.

So your proof of the usefulness of a system of disputable value is — that it's used to settle transactions of other systems of disputable value?

And, of course, those DeFi systems in turn are used to settle transactions of other systems. It's tokens all the way down!

Also memes, but I think you can ask the same question about our legacy financial system

I get paid in our "legacy" system and that keeps a roof on my head and the lights going, along with a few other billion people.

I get paid in dai in the ethereum system and that keeps a roof on my head and the lights going, along with a few other hundred?thousand? people.

I still dont get why hackernews always has a bad reaction to cryptocurrencies. Disruption and innovation is praised, unless it challenges money. Experiments with computing and code is praised, but only if its a toy language.

We're all on the same side :) just playing with different ways to do things.

Would you expect everything to move onto Ethereum/Blockchain immediately? Obviously not - small incremental steps are taken to improve legacy systems. 1T transacted is a fairly impressive milestone in that journey.

I'm expecting that after a decade or so of rapid development by people constantly hyping and offering a vision of the future that's a complete lie, that at the very least some of it would materialize.

You're conveniently leaving out half the worlds population that doesn't have access to this legacy system.

They have fiat currency that they use to exchange for goods and services.

I do not know literally a single human being who uses BTC or ETH exclusively for exchanging legal goods and services.

We're talking about financial primitives, not owning currency. These people do not have access to bank accounts, loans, mortgages, etc. Once you have identity systems on Ethereum, then no-collateral loans and mortgages will be offered to anyone with access to the internet.

Probably quite favorably when you compare that to the fiat system we have now. Look at SPACs, CLOs, or the Hertz bankruptcy stock buying opportunity, or Nikola Corporation, etc. I could go on forever.

The traditional system enables tens of trillions of dollars worth of economic activity a year.

Yes

Yeah no.