DeFi Will Help Women Take Back Control of Their Finances and Close the Wealth Gap The blockchain is open-access and inclusive to anyone around the world. This gives women a unique opportunity to ditch patriarchal conventions and take control of their own lives.
By Kurt Ivy
Opinions expressed by Entrepreneur contributors are their own.
Entering into the crypto markets and the DeFi (decentralized finance) financial system can be a challenge. The crypto markets have been dominated by men until now, but this trend is changing. Women can make a big impact on a market that will be the next big driver of financial innovation.
DeFi is a fresh start
DeFi is new, but it also represents a huge change in how money moves. The potential use cases for DeFi are global, as DeFi can make connections that no other form of financial technology is capable of. This opens up a new avenue for women around the world to participate in the DeFi ecosystem both as developers as well as users.
Because the blockchain industry hasn't cemented itself in society yet, most people don't have the general industry knowledge necessary to get started in DeFi. The new industry also has a fairly complex learning curve in regards to the tools used. Many fresh investors stick to mostly safe investments like Bitcoin or Ethereum. But as crypto slowly enters the mainstream, the public is beginning to want to know more about how blockchain technology, crypto and DeFi fit into an overall investment strategy, as well as how the market works.
This presents an even greater opportunity for women to get involved in an industry where men have led for over a decade. Some women are already taking advantage of this to bring education, technical know-how and the accessibility of DeFi to other women entrepreneurs. Some of these women are trying to change the way the blockchain and decentralization are utilized in underprivileged communities around the world, changing our perspectives and breaking fresh ground.
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Freedom is power
Economic freedom, entrepreneurial pursuits, independence and security are empowered by decentralization. There are no gatekeepers, and public blockchains are open to all. While this is clearly powerful for larger financial entities, the unbanked masses may be the largest untapped market for DeFi.
Given these advantages, many people are turning to the blockchain as a way to get around restricted traditional monetary systems and gain more control over financial opportunities for themselves, their families and their enterprises.
Decentralized finance improves transparency, accessibility and equality. It maintains a borderless system that allows for equal access to anyone. As long as they have a connection to the internet.
Women are increasingly turning to cryptocurrency as a means of taking advantage of these strengths as well as avoiding a system that is designed to reward entrenched interests in a largely patriarchal society. DeFi use cases give broader access to financial tools to supplement their incomes without relying on their spouses or traditional banking institutions. In other words, the blockchain provides a mechanism for women to participate in an industry that allows them to take control of their financial independence. Access is open to all now. It's time for women all over the world to take notice and use this as a chance to fight back.
DeFi democratizes finances
Female-led firms received only 2.3 percent of VC investments in 2020. That number is a mere 2.1 percent in the first eight months of 2021. As more women enter the startup and tech worlds, the demand for equality grows. That's because data shows that diverse teams are more profitable, regardless of the field.
Only around one in ten people in America invest in crypto, and the market has yet to gain traction among women either. That's especially strange considering that crypto has, in many other ways, delivered on its promise to spread equality. It is the only financial system in which young people actually have a higher participation rate than older people.
In the early days of Bitcoin, it was widely thought that cryptocurrencies would bring in a new era of diversity in the financial services business, which has been plagued by gender inequities for years. In spite of the ability and claims of crypto to address inequality, The State of U.S. Crypto Report found that 75 percent of crypto owners are men.
On the other hand, people of all races are roughly equally likely to hold cryptocurrency: 11 percent white, 11 percent Black, 10 percent Latino, 14 percent Asians own Bitcoin, with the remaining 13% of owners being undetermined. That means that Bitcoin has managed to break down barriers to investing based on race, but it has failed to do so in terms of gender. So far.
Related: How Blockchain and Cryptocurrency Can Revolutionize Businesses
Women are breaking into crypto
The problem lies in investment opportunities, not in interest or aptitude. A 2016 report shows that women leave corporate tech jobs at twice the rate of men. The male-dominated culture tends to drive women out. But in spite of how difficult it seems to be for women to break into crypto, a few noteworthy women have shared their thoughts on how the industry is evolving. There is good news.
Kinjal Shah is a senior associate at Blockchain Capital and a backer of the Komorebi Collective, which supports female and nonbinary crypto entrepreneurs. She believes that this new financial system can be built in a different way, and she hopes that more women and minorities will enter the trillion-dollar industry. "If this is the future of finance," she remarked, "I want more women to be sharing a piece of that pie... From the outside looking in, the face of crypto is very male. Now that I'm on the inside, I know so many women."
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Julia Rosenberg is one of the few female founders at Orca Protocol. While raising funds for her company, she realized that she hadn't spoken to any female investors for four weeks. The investor? Kinjal Shah.
Both Rosenberg and Shah saw an opportunity to influence the developing DeFi world in a way that was distinct from the traditional tech and banking systems they were used to.
That meant actively employing and recruiting women, especially on the technical side, for Rosenberg. Orca Protocol boasts a female co-founder, chief executive, adviser, and product design lead among its nine workers.
Another great example of how women are entering the blockchain industry is the launch of Defy Trends – which is a women-led DeFi analytics firm. On September 30th, the four female founders were named as one of two winners at The Startup Showdown in Miami.
They were awarded a $120,000 USD investment from Panoramic Ventures, which was also one of the competition's judges. They were chosen as "best company" for the competition out of 200 promising applicants. This puts them in the above-mentioned 2.1 percent of women-led companies that got investment funds in 2021.
The platform is designed to assist investors in making smarter decisions with real-time data analytics and a social sentiment tracker for each coin. The data is crunched by machine-learning AI algorithms.
It even includes an environmental impact assessment to help investors make responsible decisions as well as profitable ones. This is combined with a worldwide analysis that tracks how each coin interacts with each other in a broader ecosystem.
The future of blockchain is inclusive
In 2020, a survey by CoinMarketCap revealed a 43 percent increase in women in business. The earnings potential of investing in women-led firms is attracting the attention of blockchain companies. Women Who Code just received a $150,000 grant from Algorand to fund their blockchain deep-learning curriculum for women engineers. Gemini and The Giving Block, two companies that help others raise funds through cryptocurrency, have raised their own funds by reaching out to cryptocurrency donors on International Women's Day 2021.
The UNICEF Innovation Fund is an ambitious fund created to help children around the world. It is focused specifically on blockchain-based startups that help facilitate financial inclusion. Over 50 percent of the companies involved here are women-led. The goal is to make open-source, decentralized financial instruments and marketplaces more accessible to local communities and small business owners, allowing them to interact with these revolutionary systems in new, useful ways.
In fact, some studies suggest that the use of small-scale, informal lending in poor nations is extremely common. This implies that women could easily transition away from illegal lending, and use DeFi platforms that simply require the use of a smartphone, and cryptocurrency. In addition to helping the unbanked access credit at fair rates, illegal money lenders would be impacted negatively.
Having women at the forefront of the industry's early phases of development is a promising sign. Because this time around, education and access are much more important points of focus. It is reasonable to think that, moving forward, growth will begin to spread more evenly.
However, there is still a lot of work that needs to be done. According to the World Economic Forum, it will take over 200 years to close the global economic gender gap at the rate we're going. It is vital to ensure that women continue to have equal access to blockchain technologies and education and that great ideas like the ones mentioned above are given support.
