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Decentralized finance (DeFi) is a new financial technology that poses a threat to the current centralized banking system. Peer-to-peer, or P2P, transactions are encouraged by DeFi by eliminating the fees that banks and other financial institutions impose for using their services.
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In July 2021, TikTok had three billion downloads. According to statistics, the social network is used by over a billion people each month. Additionally, among Generation Z in the US, TikTok has surpassed Instagram in popularity.
Over the past six months, Bitcoin (BTC) has decreased by more than 70% from its all-time high north of $69,000 in 2021. Market volatility should be expected. Decentralized finance (DeFi), though, needs more support if it is to survive.
The aforementioned volatility as well as the general skepticism surrounding cryptocurrencies deter many investors. Fortunately, Generation Z investors differ from investors in previous generations.
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Both Financially and Digitally Literate on future of DeFi
The finance feature on TikTok has grown to be so popular that it has its own portmanteau. FinTok, or financial content, has seen a meteoric rise alongside the social network itself. Last year, the #Crypto hashtag received 1.9 billion videos as it gained popularity.
The astounding increase in #NFT-related uploads was 93,000%. (further stimulated by the general surge in interest in NFTs). In addition, 1.4 billion people watched videos with the hashtag #StockTok.
Outside of the cryptocurrency market, there are a ton of videos available on money management. Last year, content with the hashtag #PersonalFinance, which covered everything from tax and budgeting to savings and debt, was viewed by more than 4.4 billion people.
In the context of Generation Z, TikTok‘s core user base, it demonstrates that today’s youth have a voracious appetite for financial information. They just want to watch it while dancing and listening to a catchy pop song.
Young adults are also leading the way in the adoption of digital assets. According to CNBC’s “Invest in You” survey, people aged 18 to 34 invested 15% of all cryptocurrency, compared to people aged 35 to 64 who invested 11%, and people aged 65 and up who invested a pitiful 4%.
The problem is that, according to 21% of 18-34 years old, a sizable portion of that age group only sees cryptocurrency as a 12-month strategy.
It’s not surprising that Gen Z is learning about finance as well as embracing cryptocurrencies. Gen Z will earn a third less on conventional stock and bond investments than previous generations, according to Credit Suisse’s global investment returns yearbook.
The COVID-19 pandemic will affect Generation Z’s professional and financial future in a similar way to how the Great Recession affected Millennials, according to Bank of America’s “OK Zoomer” research report from December. Therefore, even though the majority of Generation Z lacks the financial resources to invest in cryptocurrencies at the moment, they may do so in the future, particularly if they are as financially astute and motivated to make investments as the data indicates. That’s where DeFi has a chance, actually.
Increasing trust in digital assets through open marketing
The future of DeFi: For the future and health of the digital asset market, businesses must engage the appropriate audiences in ways that are specifically catered to those demographics.
Similar to what DeFi promises to do with finance, social media platforms like TikTok have the potential to democratize the investing process. What was once a closed community restricted to qualified Wall Street bankers and hedge fund managers is now open to all.
However, if DeFi wants to take advantage of the possibilities presented by the most widely used social media platform, it must enhance its marketing. Producing brief, focused videos that are easy to understand, relevant to the target audience, and that not only make cryptocurrency accessible but enjoyable while being open and honest about the risks associated with investing are required to accomplish this.
With short videos, TikTok has good success. Most of them, though, are top-of-the-funnel activities. That could be advantageous or detrimental. Brands can interact with Generation Z consumers right away to get them ready to become informed leads who can be converted in a few years when they have the capital to do so.
What is needed is this conversion-related content. Businesses engaged in cryptocurrency must gain the audience’s trust over the coming years. In light of the recent market volatility and unfavorable press the bear market has experienced, this is no small accomplishment.
In order to build long-lasting, dependable relationships with the younger generation, DeFi brands must maintain their transparency, differentiate themselves from traditional Fi brands, and decide what kinds of video content to produce. If cryptocurrency businesses begin using their language right away, Bitcoin and other digital assets may have a bright future.
Digital marketer by day and freelance writer at night, Zac Colbert works in both fields. He has been writing about digital culture since 2007.
This article is only meant to serve as general information, and neither investment nor legal advice should be inferred from it. Views, concepts, and opinions expressed by authors are their own and do not necessarily represent or align with those of Coin telegraph.
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Features of DeFi
It can be viewed as the most realistic use of blockchain because it incorporates its benefits, such as:
Eliminate third parties: It completely cuts out third parties so that users can retain control of their money. Users no longer need to go through a bank, financial institution, or intermediary like traditional finance. Any disagreements will be settled in a predetermined way.
A smart contract is a generalized strategy for getting rid of middlemen that uses the blockchain network’s indubitable logic code to execute itself without human intervention. Smart contracts frequently help DeFi.
Automation: Use Smart Contracts to simplify the process but still ensure speed and accuracy with each contract.
Cost savings: cutting costs in the role of lawyers and personnel to perform contracts.
Autonomy: Once engaged, stakeholders are not subject to external authority, but only to the terms they have agreed to in the Smart Contract. This feature also prevents them from being manipulated by either party, ensuring the safety and security of contractual agreements.
