Digital Asset Revolution How Blockchain Is Decentralizing Finance and Disrupting Wall Street

by Tapscott, Alex

• ISBN13: 9781988025742
• ISBN10: 1988025745
• Format: Hardcover
• Copyright: 2022-07-06
• Publisher: Barlow Publishing

Summary

From the coauthor of the bestseller Blockchain Revolution comes the foundational book on cryptoassets, decentralized finance, and the transformation of value.

In tune with the crypto Zeitgeist, Alex Tapscott brings us a well-researched and highly accessible book on the peer-to-peer marketplaces and open economic systems that are supporting new digital assets like NFTs, CBDCs, stablecoins, crypto derivatives, and more. Tapscott writes,

If bitcoin was the spark for the financial services revolution, then DeFi and digital assets are the accelerant. The fire will engulf firms that fail to innovate, adapt, and embrace this hot new industry. The conflagration will suck oxygen from centralized systems and blow it into a new decentralized web. The financial phoenix that rises will be virtually unrecognizable from the system we have today.

This book is about more than dislocating market intermediaries. It’s about Web 3’s unleashing new business models and organizational capabilities that will transform existing industries and redefine the architecture of our institutions. Leaders ignore these signs at their own risk.

Author Biography

Alex Tapscott is an entrepreneur, author, and seasoned capital markets professional focused on the impact of the emerging technologies (such as blockchain and cryptocurrencies) on business, government, and society. He is managing director of the Digital Asset Group, a division of Ninepoint Partners LP, an investment firm with $8 billion in assets under management and institutional contract. He is co-author of the critically acclaimed nonfiction bestseller, Blockchain Revolution, which has been translated into more than 15 languages and sold more than 500,000 copies worldwide.

Table of Contents

Contents Preface 7 Chapter 1: Digital Asset Revolution 9 Introduction: The building blocks of disruption 10 The rise of digital assets and the future of financial services 10 Web 3 and the new Internet of value 11 The Golden Nine: Essential functions of the financial industry 12 A taxonomy for digital assets 14 Decentralized finance is eating Wall Street 16 DeFi: A new architecture for the financial system 16 The Golden Nine: How DeFi is reimagining Wall Street 16 A taxonomy of digital assets 28 Cryptocurrencies aka digital money 29 Protocol tokens 30 Central bank digital currencies 33 Non-fungible tokens 35 Stablecoins 37 Securities tokens 40 Governance tokens 43 Exchange tokens 45 Natural asset tokens 46 Implementation challenges of DeFi 47 The technology is not ready for prime time 47 The energy use is unsustainable 48 Governments will stifle or twist it 48 Powerful incumbents of the old paradigm will usurp it 49 The incentives are inadequate for adoption: The bootstrapping problem 49 Blockchain is a job killer 49 Governance is like herding cats 50 Criminals will use it 50 Conclusion: The coming conflagration 50 Chapter 2: Cosmos and Polkadot for the Enterprise 51 Interoperability in brief 51 The challenge of interoperability 52 Introducing Cosmos 53 Cosmos’ origins and ethos 53 The core technology components of Cosmos 54 Metrics of Cosmos success 57 Introducing Polkadot 58 Polkadot’s origins and ethos 59 The core technology components of Polkadot 60 How enterprise can use Polkadot 63 The Polkadot ecosystem and its impact 64 What do decision makers need to know? 65 Key similarities 65 Key differences 66 Conclusions on interoperability 69 Chapter 3: The Promise of Community-Owned Prediction Markets 70 Prediction markets in brief 70 The promise of prediction markets 71 Classic use case: Sports and political betting 71 The problems of sportsbooks 72 The perils of centralized betting exchanges 72 The centralized governance problem 74 The future is clear: Community-owned betting markets 74 Introducing the crypto network 75 Problems with decentralized governance 77 Introducing prediction market-based governance 79 Governance design for a simple prediction market 79 Conclusion: The inevitability of crypto networks 82 Chapter 4: Going Cashless with CBDCs 82 Webinar in brief 82 Introduction: A new paradigm for money 83 Disruptive technology makes for new policy options 84 Overview of the digital dollar 86 How digital currencies differ from other financial assets 86 Attributes of the digital dollar 87 The need for infrastructure innovation 88 Roadmap to a new banking system 88 Attributes of a digital global reserve currency 89 The goal of modernizing global economic architecture 91 The need to modernize global financial regulation 92 Conclusions: This is just the beginning 93 Diversity makes for a healthy marketplace 93 Blockchain will transform other financial assets 93 Currency innovation will unleash economic innovation 95 Chapter 5: Introduction to Stablecoins 96 Stablecoins in brief 96 The context for stablecoins 97 The economics behind the protocols 99 Governance of stablecoins 101 Gold or bitcoin, a stable commodity? 103 Types of stablecoins 104 Asset-collateralized stablecoins 104 Non-collateralized stablecoins 111 Hybrid stablecoin models 113 Top stablecoins 114 Tether (USDt) 115 USD Coin (USDC) 116 Binance USD (BUSD) 118 Dai (DAI) 119 Frax (FRAX) 120 TrueUSD (TUSD) 121 Paxos Dollar (USDP) 122 Gemini (GUSD) 123 Using stablecoins: A few ideas 125 Conclusion and review 127 Chapter 6: Financial Derivatives with Blockchain and Smart Contracts 128 Blockchain-based derivatives in brief 128 Derivative contracts on blockchains 129 Levels of applications 130 Standardization, transparency, and interoperability 130 Collateral, settlement, and automation 132 Derivatives on public blockchains 133 LuxDeco and the world’s first cryptobon