It's no secret that:
1. American purchasing power has decreased in the past year
2. inflation has started to creep into our consumer product prices
3. the proposal for unrealized capital gains is ridiculous
4. home prices have skyrocketed with cheaper capital
Despite the highs that we have experienced in the past ten years, something is bubbling- without public awareness of what would push the dominoes (including myself). In 2008, it was a failure to cover insurance payouts for mortgage-backed securities. In 2022- who knows?
But, is this bad? Well- depends on the perspective.
Never before has the average consumer had access to such yields as those generated by crypto, nor the freedom to earn more purchasing power with either collateral or skill.
You can look at yield aggregator dashboards and see the high-yields that could not be achieved for the same amount in a bank.
The internet brought about zero-cost business models that could leverage a massive source of distribution- this is how all of the software giants today grew, just as the future financial protocols will.
There has bee a massive shift of fiat into crypto since the beginning of the year, up to $2.3T. Protocols still represent a small amount of that- around $100B. When you think of the global financial market ($600T+), then you realize just how much room there is for innovation in the peer to peer market.
With the growth will come liquidity in the ecosystem- meaning code will now shape how you get a mortgage, or how you finance a car. Or, on a federal level, how and when you issue more money to the general public.
Interest rates are a product of risk- the lower the chance of payback, the higher the interest rate. This also applies to urgency- if someone needs to borrow ASAP, then the lender can charge far more. In crypto, the collateralization ratio determines the adjusted risk automatically, with improvements coming every day.
Though the gov has put us in a pickle with printed money and interest rates, there exists a huge opportunity for us to rewrite the financial future of our country.