Taking a look into the headlines of recent memory, it becomes apparent that faith in fiat currency has taken a hit.
The boogieman of currency everywhere, inflation, has gripped several nations in its hold of devaluation.
And when looking towards the devaluation of currencies tied to nations, the true burden of these falls rest on the people that rely on the currency to survive.
When the instrument of trade used by a population becomes near worthless, as witnessed by the events in Venezuela and Zimbabwe, the true fallout is felt by the lives that are devastated.
So, in light of the impending recessions that lie on the horizon for many nations, it bears worth to explore the delicate balance faith in the system and value that fiat walks as well a potential respite from devaluation that individuals can utilize.
That respite from complete loss, in this case, being DeFi.
The Decline of Faith in Fiat
While inflation is a natural part of the fiat ecosystem, when that inflation begins to rise beyond natural movements, devastation to a national currency follows.
Regardless of what spurs that trend towards devaluation, whether it be national debt or the decisions of those at the highest levels of national administration, the effect is one that ripples throughout every part of a population.
The cascading effect that hyperinflation has on life causes a compounding harm that most greatly affects those with little control over the situation.
This has been shown to be true time and time over in different corners of the world.
Individuals lose faith in the currency that they rely on.
And that faith is a critical facet of fiat’s place in the way we conduct trade.
When that faith falls, fiat falls alongside it.
So, what can an individual do when faith in their national currency falters?
DeFi as an Act of Defense
Well, the answer to that question, with growing frequency, is they turn to alternatives.
Stories of Venezuelans turning to Bitcoin to avoid financial ruin have made their way into the mainstream consciousness over the last couple of years.
This is seen in other countries that are in the grips of hyperinflation as well.
More and more people are turning to DeFi when hyperinflation hits.
Unlike some who turn to DeFi due to its potential to transform finance as we know it, that decision for many individuals is less of supporting a new methodology of trade and more one of simply surviving.
That use of DeFi instruments to survive speaks volumes regarding the ability for decentralized alternatives to weather inflation and offer respite from financial collapse.
This causes one to ask, if DeFi can be used as a safety net should its adoption become seen as a decision to protect oneself?
This is a decision that even those not experiencing hyperinflation could back as one should always look towards bettering their position to protect themselves.
Much in the same way an investor would not dump their entire life earnings into a single position, perhaps it’s time individuals stop placing their lives into one system of finance.
To continue doing so might be a decision that we will regret when our own currency begins to fall.
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