For better or for worse, the world of crypto moves at lightning speed. If nothing else, this is evidenced by the sheer amount of capital that has flooded into the decentralized finance (DeFi) sphere in the recent past in August 2020, the total value locked (TVL) in DeFI was just $7.5 billion. Today, that figure has surpassed $85 billion.
But, the exponential growth of the DeFi sphere could mean that the market still faces a number of infrastructural challenges. And, the significant number of hacks, exploits and other incidents seem to indicate that DeFi is going through some growing pains.
The Evolution of Crypto: ‘Hodling’ Is No Longer the Norm
“Back in the day, everything was about ‘hodling,’” Michael said, referring to the practice of buying and storing BTC for long periods of time. And indeed, the early days of the cryptopshere were filled with Bitcoin maximalists who “believe[d] that Bitcoin is going to the moon, and maybe it will, maybe it won’t, I don’t know,” he continued.
But, the inception of decentralized finance, or DeFi, has ushered in a new era: nowadays, “sitting on your money is not enough,” Michael said. “You can make your money work for you..you wouldn’t hold $100,000 in fiat currency in your bank account, you would do something with that money.”
Trading crypto is certainly one option. However, crypto’s infamously volatile market conditions and complex technical processes can make the process risky. ”You need to put a lot of effort into trading,” Michael said.
And, because of the high degree of complex technical knowledge required to execute even the most basic functions in the DeFi world. Studies have shown that ‘millions of dollars’ are lost ‘on a daily basis’ due to technical errors, incorrectly copied addresses, tokens sent over incorrect networks and more.
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However, technical errors are not DeFi’s only paint point. Clipboard hacking malware and other malicious tools can intentionally re-route your transactions to the wrong destination. Additionally, even if transactions do reach their intended recipient, the agreed-upon conditions of direct peer-to-peer trades may not be met.
“When you [send many transactions] on a daily basis, then there is a danger of you losing your money every day,” Michael said. “And sometimes we’re talking about millions in one single transaction.”
Ultimately, this limits what is possible in the DeFi world. “[These risks] prevent users from sending crypto, and from interacting and engaging with other people,” he explained.
Does DeFi Need an ‘Undo Button?’
Kirobo’s solution to the problem is to introduce ‘a layer of protection to every transaction’. The company’s ‘Undo Button’ allows users to set a passcode that is sent separately to recipients. When a transaction is sent through the tool, it can be canceled and retrieved until the recipient uses the passcode to retrieve it.
“The tool can be used with almost any wallet that supports ERC-20 tokens and other Ethereum-based assets,” Michael said. “You just connect your wallet. From that point, it takes you something like five minutes” to complete the process. Users are rewarded with KIRO tokens each time they use the tool.
Crypto’s Growing Role in Global Society
Michael explained that Kirobo hopes that the undo mechanism will continue to play a larger role as cryptocurrency grows more prevalent in a global society. And there is evidence that it is: “Whether you are in the States, Africa, the Far East or Israel, you cannot be sure that your money is safe, you cannot be sure that inflation [isn’t happening.]”
“When you go to buy your groceries, you see that your money buys you much less. It doesn’t matter what Jerome Powell is saying. You see that inflation is upon us.”
“People are looking for smarter, more innovative ways to maintain their funds,” Michael said. “So, they’re flocking into crypto.”