In a tweet, Dorsey stated that Square was “focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services.”
Open and Transparent
In the same tweet, Dorsey stated that the new platform would be open and transparent. All stakeholders would be actively involved in various matters, including planning and day-to-day development. As Dorsey called it, the open developer platform would be spearheaded by the strategic director at Cash App.
In a follow-up tweet, Dorsey argued that technology has always enabled decentralization. He pointed out the changes enabled by technology, such as the change from the printing press to the internet and bitcoin. “Technology has the power to distribute power to the masses and unleash human potential for good, and I’m convinced this is the next step,” Dorsey noted.
Before this announcement, Dorsey had also announced plans to build a BTC hardware wallet. According to Dorsey, the new bitcoin wallet would allow users full control of their digital assets by removing the need for a third party. Dorsey also added that the wallet would be created for mobile use; hence it could be easily integrated with smartphones. Square also plans to distribute the bitcoin hardware wallet globally.
Tapping into DeFi’s Boom
Decentralized finance (DeFi) is a sector that has rapidly grown in the past year. DeFi focuses on removing the need for an intermediary such as a bank when offering financial services. Unlike traditional financial institutions, DeFi platform leverage smart contracts to conduct transactions.
DeFi applications are launched on different blockchains. However, the largest percentage is based on Ethereum. However, other platforms such as Polygon and Solana are quickly gaining adoption in the DeFi sector.
The reason why DeFi has gained fast adoption is efficiency, accessibility, and cost-effectiveness. Yield farming is one of the areas in DeFi that have attracted growing interest. Yield farmers earn great returns ranging between 15% and 30% by locking capital in the DeFi ecosystem.
Market analysts have largely debated that the rise in DeFi will disrupt the traditional financial systems. These platforms offer higher yields to users than traditional financial instruments, hence their preference by investors.