[dmihal]

The most innovation is happening in financial products. There's no way for a developer or entrepreneur to experiment building in traditional finance without the support from large financial institutions. But in DeFi, there are financial applications built by teams in India, Africa, SE Asia, etc.

If you want an example of one innovation, look at flash loans. Flash loans provide the ability to atomicly borrow infinite money for the duration of a transaction, with no collateral or credit. This money can be used for arbitraging or just to provide working capital for a complex operation. If the loan isn't repaid by the end of the transaction, the whole transaction is cancelled.

Better explanation:

https://www.youtube.com/watch?v=mCJUhnXQ76s

[mustafa_pasi]

Flash loans are not a real world application. They are just another tool needed within the cryptospace itself.

This is the problem currently. There's ten thousand teams building and building, but each one of them is building yet another library or yet another tool. Nobody has any idea how to connect the crypto economy to the real world economy.

The only applications possible are ones that you can do within the cryptospace itself, like lending one crypto against another, or creating some creative gambling game.

Unless somebody can figure out how to bridge the cryptospace to the real world economy, the whole castle of cards will eventually crumble.

[dmihal]

Flash loans themselves are not an application, it's a primitive that other applications can build on top of.

There's many applications like DeFiSaver that use flash loans to allow users to migrate debt between lending protocols without needing additional capital.

[machiaweliczny]

> Nobody has any idea how to connect the crypto economy to the real world economy.

How about stablecoins and exchanges? This already ties economies.