<figure class="wp-block-image size-large"><img width="325px" height="183px" srcSet="https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2024/06/27031432/Unstoppable-Force-of-DeFi-300x169.webp 300w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2024/06/27031432/Unstoppable-Force-of-DeFi-1024x576.webp 1024w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2024/06/27031432/Unstoppable-Force-of-DeFi-768x432.webp 768w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2024/06/27031432/Unstoppable-Force-of-DeFi.webp 1200w" sizes="(max-width: 425px) 150px, 450px" src="https://ll-blog-dev.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/06/27031432/Unstoppable-Force-of-DeFi-1024x576.webp" alt="Unstoppable Force of DeFi" class="wp-image-5561"/></figure>



As globalization has significantly increased over the past couple of decades, political trust has fallen.



This trend, identified by researchers from the <a href="https://mpra.ub.uni-muenchen.de/36327/" target="_blank" rel="noreferrer noopener">University of Bern</a> in 2012, has only worsened in the following years.



But while trust in centralized institutions circles the drain, we’ve seen the rise of crypto and decentralized finance.



Can DeFi be the lifesaver we need to create fairness where our governments have failed?



<h2 class="wp-block-heading tablecontent">Why Have People Stopped Trusting Their Governments?</h2>



Younger generations, in particular, have many reasons to be skeptical of their governments.



Everlasting inflation, increasing public debt, the housing crisis, low interest rates—who else could be blamed for all these troubles? 



With governments and other centralized institutions falling out of favor, it’s no surprise that crypto’s popularity has skyrocketed. Initially invented to be a safe haven for storing wealth outside of the control of centralized middlemen, Bitcoin and other DeFi projects aim to create a system that surprasses the need for trust by making everyone equal.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" width="325px" height="183px" srcSet="https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2024/06/27031240/Bitcoin-transactions-300x216.webp 300w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2024/06/27031240/Bitcoin-transactions-1024x737.webp 1024w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2024/06/27031240/Bitcoin-transactions-768x552.webp 768w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2024/06/27031240/Bitcoin-transactions.webp 1258w" sizes="(max-width: 425px) 150px, 450px" src="https://ll-blog-dev.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/06/27031240/Bitcoin-transactions-1024x737.webp" alt="" class="wp-image-5560"/><figcaption class="wp-element-caption"><a href="https://www.blockchain.com/en/explorer/charts/n-transactions">Blockchain.com</a>: the number of transactions in the Bitcoin network keeps growing, signifying increasing interest in crypto.</figcaption></figure>



<h2 class="wp-block-heading tablecontent">Major Cases Of Government Failures</h2>



Anyone who lived through the last two decades would not be hard-pressed to find examples of governments failing their people. Some of the biggest examples include: The Global Financial Crisis in 2008



Political trust has not been the same since the 2007–2008 financial crisis sent shockwaves throughout the world’s economies. 



Millennials, who <a href="https://gitnux.org/social-media-statistics/#:~:text=in%20our%20lives.-,In%202021%2C%2048.2%25%20of%20Baby%20Boomers%2C%2077.5%25%20of,the%20digital%20divide%20between%20generations.">according to some reports</a> make up the majority of today’s internet users, were hit by this crisis particularly hard. 



As a consequence, many live in a state of perpetual mistrust towards the authorities who were supposed to protect them. As a result, they have been left searching for other ways to store their wealth.



Notably, the US’ government’s response to this crisis is directly tied to the creation of Bitcoin. 



Responses to the Pandemic in 2020



Covid-19 hasn’t added trust points to centralized authorities either.



When the disease started to spread, many governments failed to act swiftly and decisively to reduce its impact on populations.



The lack of adequate supplies, together with costly medical services, deprived citizens of any chances to avoid the disease. In the US alone, <a href="https://coronavirus.jhu.edu/region/united-states">more than one million deaths</a> had been officially registered in the course of three years.



In addition, the lack of a consistent strategy has further pulled back the veil, revealing that governments are not as dependable as we once believed them to be. 



The Housing Crisis in 2023



Despite an initial dip since the US market collapsed in 2008, housing prices have continued growing at an even larger scale than before.



But this problem is not unique to the United States. 



Growing prices and the inability to get a decent place to live are hitting people and families across the globe.



In particular, unaffordable housing has proven to be a significant issue across <a href="https://www.euronews.com/business/2023/10/07/europes-housing-crisis-portugal-turkey-and-luxembourg-struggle-to-find-solutions" target="_blank" rel="noreferrer noopener">Europe</a>, <a href="https://www.bloomberg.com/news/articles/2023-12-30/real-estate-credit-stress-is-brewing-in-asian-markets-other-than-china" target="_blank" rel="noreferrer noopener">Asia</a>, and <a href="https://theconversation.com/australias-deeply-unfair-housing-system-is-in-crisis-and-our-politicians-are-failing-us-219001" target="_blank" rel="noreferrer noopener">Australia</a>.



As a result, many people feel that governments–which were supposed to control these markets–have failed to guarantee that people can afford access to basic necessities.



<h2 class="wp-block-heading tablecontent">How Does Crypto Address Social Problems?</h2>



Crypto is not a magic pill; it can’t solve the housing crisis or cure all of society&#x27;s ails. But what this technology can do is restore something that has long been absent: a fair financial system that ordinary people have control over.



As a result, DeFi can be a more fair solution to <a href="https://www.thecoinzone.com/tradfi/what-is-financial-friction/" data-wpil-monitor-id="1328">traditional finance</a> in many different aspects. 



<a href="https://www.thecoinzone.com/global-macro/nobody-trusts-treasuries-so-tether-stepped-in/" data-wpil-monitor-id="1215">Decentralized finance</a> offers:



<ul>
<li>True ownership over your assets. Non-custodial wallets, true DeFi, and other solutions provide their users with full control over their assets. Unless you give away your private keys, no one will be able to take away your funds.</li>



<li>Security. With true ownership comes higher security. When you are the only one with control over your own funds, you can take all the necessary precautions. Thus, you can be sure that no central party will ever freeze your assets or take them away from you.</li>



<li>Higher APY. In contrast to traditional savings accounts that provide customers with only a <a href="https://www.bankrate.com/banking/savings/average-savings-interest-rates/#:~:text=National%20average%20savings%20account%20interest,average%20savings%20account%20interest%20rates." target="_blank" rel="noreferrer noopener">0.5% yield on average</a>, DeFi can offer more lucrative rewards. For example, decentralized platforms such as Aave and Uniswap offer 3-7% APY on average. The rewards on some DeFi platforms, such as <a href="https://www.thecoinzone.com/defi/defi-yield-protocol/" data-wpil-monitor-id="405">Liquid Loans</a>, can exceed 100%.</li>



<li>Traceability and trust. With every transaction being recorded on a public ledger, true DeFi projects are far more transparent than traditional finance. Since anyone can verify any transaction they choose, users no longer have to place blind faith in the systems they use to exchange value.</li>
</ul>



While these benefits are mostly relevant for the end-users, businesses get their share of benefits from using crypto as well. 



Indeed, merchants can enjoy many of the same advantages. 



What’s more, they get reduced transaction costs, faster deals, streamlined supply chain management, and they don’t have to worry about being unfairly locked out of financial systems by their competitors.



We are in an age where political trust keeps shattering negative records while crypto adoption keeps shattering positive ones. As a result, it’s clear that an increasing number of people are turning to DeFi as a much-needed lifeline to access a financial system they can actually believe in. 



To learn about the DeFi landscape, make sure to check out more articles right here on the <a href="https://www.thecoinzone.com/news" target="_blank" rel="noreferrer noopener">The Coin Zone</a>.

The REAL Reason Big Banks Are Scared of Crypto

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The Unstoppable Force of DeFi and the Collapse of Old-School Trust

Learn why the new generations are losing trust in old-school institutions and adopting <a href="https://www.thecoinzone.com/defi/defi-use-cases/" data-wpil-monitor-id="1503">decentralized finance</a>.