Exec Summary.
Decentralised Finance (DeFi) has had its share of ups and downs on the crypto rollercoaster and whether you love it or hate it, there’s more to it than just trading and investing. Whether folks are new to the crypto space or not, they’ll inevitably associate DeFi with trading after they hear their friends are doing staking, restaking, liquid restaking, and a whole heap of other terms they need to look up on Google (or Perplexity).
As blockchain technology matures, its applications extend beyond speculative investments to real-world use cases that streamline processes, enhance transparency, and build trust across more than just the financial part of the economy. This shift has been highlighted by the recent rebranding of Blockchain Australia, the country’s top blockchain association, to the Digital Economy Council of Australia. This change underscores the mainstreaming of blockchain technology, reflecting its broader impact on the digital economy.
DeFi Has Come a Long Way: Not Just About Investing.
At NotCentralised, we have been a big believer in seeing how DeFi can be a game-changer in many industries. Our curiosity about the power of decentralised technologies and our background in capital markets led us to create various innovations (digital escrows, selectable disclosures, and more) that sit under a platform we call Layer-C.
This has been instrumental in several projects that highlight the practical applications of DeFi technology.
For instance, we teamed up with others to participate in a proof of concept with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) to pilot an Australian Central Bank Digital Currency (CBDC). This project marked a historic milestone by processing the first construction industry payment through a CBDC-backed system. It showcased the potential of blockchain to enhance trust, transparency, and efficiency in the sector. This is what DeFi can do, and we go into that more in the next section.
The RBA CBDC Pilot Project: A Case Study.
Traditional construction payment processes are fraught with inefficiencies and risks, often leading to disputes and increased costs. Our RBA CBDC pilot project aimed to address these challenges using the Layer-C platform as a blockchain-based invoicing and payment management tool.
The project demonstrated how blockchain technology could transform the construction industry by automating payments based on agreed milestones, triggered by independent construction oracles thanks to the ability to cheaply and effectively create digital escrows (which are expensive and not normally applied to traditional projects because of their expense).
Additionally, we also added in the ability for these blockchain technologies to have their amounts obfuscated to all but the counterparties on the trade. This meant that strangers could not go online and see commercial margins and the confidentiality of the companies involved was protected.
Finally, the interaction we had with the RBA was with a stablecoin backed by the eAUD CBDC (which was non-programmable and served as proof of reserve).
This innovative financial instrument provided reassurance to industry participants about the stablecoin used, showcasing the central bank’s commitment to fostering financial innovation. The success of this project highlighted how blockchain technology could address real-world problems, moving beyond speculative investments to practical applications that provide tangible benefits.
Whilst this setup was an example of how we could interact in a CBDC kind of world, we’ve also postulated scenarios where blockchain technology drives value for these sorts of commercial transactions even without CBDC or stablecoins.
Real-World Asset Tokenisation – Another step towards mainstream.
Another notable project using our Layer-C platform is the tokenisation of rent rolls in partnership with Redbelly Network (for their compliant blockchain platform,) and Monoova (for their on-ramp off-ramp capabilities).
The Australian residential real estate market is highly valuable and has seen little technological advancement in the core legal contracts that underpin this massive asset class. We’re working with these partners to help revolutionise how we transact within real estate bringing smarter technology, increasing efficiency and transparency whilst also protecting against fraud and data loss.
Tokenising existing and valuable real-world assets represents a significant opportunity to apply compliant asset tokenisation to rental authority contracts. By leveraging Redbelly Network’s blockchain, which offers fixed gas fees and a zero-knowledge-proof enabled identity layer, clients can build cost-effective and compliant solutions.
This project shows how blockchain technology can transform the real estate industry and construction that is for sure but, other industries can also benefit if they do similar things, providing a secure and efficient way to manage and trade high-value assets.
Mainstreaming Blockchain Technology.
But the truth is, it goes way beyond that, and I am lucky enough to see this firsthand, not only from the perspective of being a co-founder of a company (NotCentralised) building with blockchain technology but also having helped co-found a not-for-profit called the Australian DeFi Association that advocates for this space. I get to see how DeFi represents the future of finance and commerce, providing solutions to longstanding inefficiencies and fostering innovation across multiple industries.
These projects are just a few examples of how DeFi is reshaping industries beyond investment. The mainstreaming of blockchain technology is evident in the rebranding of Blockchain Australia to the Digital Economy Council of Australia. It is also evident in the move by major financial markets institutions towards doing more to invest in blockchain and to do more with tokenising assets (see below).
and
https://cointelegraph.com/news/blackrock-tokenized-treasury-fund-buidl-reaches-500-million
This shift signifies a broader recognition of the role blockchain technology plays in the digital economy, extending beyond cryptocurrencies to include various digital assets and smart contracts.
I have seen firsthand the evolution of blockchain technology and its impact on various sectors. Our association runs monthly meetups across Australia to discuss and promote the real-world applications of DeFi. Through these interactions, it has become clear that while speculative investments and meme coins garner attention, the true value of blockchain technology sits in its ability to provide practical solutions to real-world problems.
For more information on RWAs and keeping up to date with the latest developments, check out the RWA tracker at https://www.rwa.xyz/
The Future of Finance and Commerce.
The future of finance and commerce is intertwined with the continued development and adoption of DeFi technology. By providing transparent, efficient, and secure ways to manage and transfer assets, DeFi has the potential to revolutionise various industries, from construction and real estate to supply chain management and beyond. The use of blockchain technology to automate processes, reduce costs, and build trust represents a significant shift towards a more digital and decentralised economy.
Platforms like Layer-C and other initiatives demonstrate the practical applications of blockchain technology, showcasing its potential to transform industries and create new business models. By collaborating with industry partners and regulatory bodies, we aim to continue exploring the possibilities of DeFi and blockchain technology, contributing to the future of finance and commerce.
Conclusion.
DeFi is more than just a trend – it is the future of finance and commerce.
The practical applications of blockchain technology, as demonstrated by projects like the RBA CBDC pilot and the tokenisation of rent rolls, highlight its potential to address real-world challenges and provide tangible benefits.
As the Digital Economy Council of Australia suggests, blockchain technology is becoming an integral part of the digital economy, extending its impact beyond investments to various sectors.
At NotCentralised, we are proud to be at the forefront of this transformation, driving innovation and demonstrating the value of DeFi in shaping the future of finance and commerce.
About the Author.
The Author Mark Monfort is a prominent figure in the Australian decentralised finance (DeFi) and Web3 community.
He is also the co-founder of NotCentralised, a technology innovation company that focuses on using AI, blockchain, and Web3 technologies to solve complex problems