Jack Dorsey put his mobile payment company Square in one of the most watched areas of financial innovation on Thursday, announcing that it will launch a platform for developers to create Bitcoin-based “decentralized finance” projects.
in a Twitter topic, Dorsey said that Square plans to create a “new business” with the goal of “easy to create non-custodial, license-free and decentralized financial services”, which will mark the first emerging markets in this type of project.
Decentralized finance, or Go to financial institution, Is the name of more and more cryptocurrency projects, which are trying to establish an interlocking financial system denominated in cryptocurrencies to eliminate traditional middlemen.
Supporters say it will provide a new way to obtain financial services from loans and transactions to insurance and savings products.
Dorsey, the CEO of Square and Twitter, stated that Square “has some thoughts on the initial platform primitives we want to build.”
However, it is not yet clear what exactly the business will provide to potential developers, or how to monetize it. Before choosing a name, it will be called Pending.
“We will do this completely publicly. Open roadmap, open development and open source,” Dorsey said, adding that Mike Brock, an executive who was involved in Square’s promotion of cryptocurrency, will lead the platform.
Private investors have supported more than 70 DeFi companies this year. Although the field is still small, its value has expanded with the cryptocurrency bull market. The assets of DeFi products have grown from approximately US$2 billion a year ago to more than US$55 billion today. According to data From DeFi Pulse.
Free space Attracted attention Regulatory agencies, they are concerned about the safety and accountability of the project and the possibility of fraud. US Commodity Futures Trading Commission member Dan Berkovitz asserted that many DeFi applications may be illegal.
Many DeFi projects are built on the Ethereum blockchain because it can be used to easily create smart contracts-essentially computer code that is automatically triggered when certain conditions are met. However, Dorsey stated that the “main focus” of the platform will be Bitcoin, which is the oldest and most popular blockchain.
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The Bitcoin blockchain has historically been considered slower and less efficient than the Ethereum blockchain. However, in November, it will get its first major upgrade in several years, called Taproot, which will make it easier to create smart contracts on the protocol.
Founded in 2009, Square was originally a digital payment company, but Dorsey has shown that the group has broad ambitions. Earlier this year, it bought a majority stake in Jay-Z’s troubled streaming platform Tidal for $297 million, unexpectedly entered the music industry, and allowed the rapper to sit on Square’s board of directors.
TBD will be the latest of multiple bets on cryptocurrency by fierce Bitcoin advocate Dorsey. Square’s revenue More than doubled In 2020, this is partly due to the increase in bitcoin-related transactions on its peer-to-peer mobile payment tool Cash App.