Income inequality is a global problem, and the rise of capitalism has made it all the more apparent. Today there is vast inequality between people. The difference becomes even starker when we look beyond national borders and into remote locations of the world. In many parts of the world, people still survive with less than $1 per day.
While capitalism is surely a catalyst of income inequality, what is more shocking is how traditional financial institutions try to tackle the issue. One prime example would be banking. While banks strive to bring their services to more and more people, the paperwork involved is often enough to scare the poor away. As a financial institution, banks have failed miserably when it comes to assisting the working class with schemes and offers. With the growth of decentralized finance, that scenario is changing.
One of the primary examples of the success of DeFi in wealth generation is GameFi. GameFi refers to gaming on the blockchain. With games like Axie Infinity, many people in the Philippines were able to supplement their regular income. As a result, the quality of their lives and of the lives of people around them improved significantly. Similarly, many unbanked individuals have taken to crypto investment as it does not involve the same process of doing paperwork and finding guarantors. If DeFi continues to grow at its present rate, we might not be very far from the time when it will completely replace financial institutions.