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WILL 2022 BE THE YEAR OF DECENTRALISED FINANCE?

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Kristjan Kangro, CEO and Founder of cryptocurrency investment platform Change, discusses what the next twelve months have in store for cryptocurrencies and blockchain

2021 was another busy year in the cryptocurrency industry. Prices reached record highs, NFTs gained in prominence, we saw new use cases for blockchain and a lot of regulatory debate and action. The cryptocurrency industry is also fairly unique in that it creates very strong and mixed opinions. Ask a room full of people about NFTs and you will have some arguing they will revolutionise nearly every aspect of our lives, and others who consider it a confusing bubble. With such varied views it can be hard for the casual observer to understand what is really going on. However, if you ignore the loud opinions, and dig a little deeper into the underlying trends, you can start to see a much clearer picture emerging. In mine and many other people’s opinion, one of the most important and exciting innovations to gain ground in the past twelve months is decentralised finance.

If you are unaware, decentralised finance (DeFi) is the concept of moving power and control away from traditional financial institutions, such as banks and brokerages and into the hands of people like you and me. It brings to life a world where financial transactions and products are all run on a public blockchain without a middleman. In this way, complicated procedures, checks and security requirements such as KYC are all made more efficient.

Take, for example, a startup seeking to take out a loan. In a traditional, centralised setup this might involve a lengthy application process, numerous checks and anti-laundering procedures. Even should the candidate be found to meet the set criteria; final approval is often at the discretion of the bank manager or other representative. DeFi revolutionises this by eliminating the need for an intermediary to process, validate, or authenticate transactions, meaning investments are built purely on factual data.  In this way, it creates a more transparent, open and free financial system.

Applied en masse, it will result in a truly global economy, where anyone, irrespective of the financial infrastructure or controls in their own country will have the same access and opportunities as everyone else. Given that many millions of people are currently ‘underbanked’ or ‘unbanked’ it could help play a big role in tackling poverty. For those already in the traditional financial world, the improved transparency and accountability makes the financial system as a whole more stable – meaning scenarios like the 2008 financial crisis which was caused by a systemic lack of transparency and accountability in the financial system would become far less likely to happen.

Over the course of 2021 we’ve seen more companies and countries look at ways to embrace DeFi. Scores of DeFi projects have been launched and according to accountancy giant EY – the value of assets locked into DeFi grew from less than $1 billion in June 2020 to more than $98 billion in September 2021.The very fact that major companies like EY are writing detailed reports (The DeFi Wave is Approaching) about DeFi tells you a lot about how the trend has evolved. Meanwhile, others in the space such as MetaMask, which offers a wallet which is fully compatible with DeFi services and apps or ‘DApps’ on the Ethereum blockchain recorded 500% growth in Q1 of 2021 and, as of August 2021 has 10 million monthly active users. Indeed, DeFi now has sizable players replicating nearly every aspect of the traditional financial system – for example, lenders like Maker, Aave and Compound, derivative traders like Synthetix, insurers such as Nexus Mutual and asset managers like yearn finance.

The creation and widespread adoption of something as radical as DeFi is not going to be straightforward. 2021 has seen some pushback from regulators across the world. How this process evolves in 2022 will have a profound influence on how quickly DeFi matures. In principle, much of the arguments around tighter regulations centre around ‘know your customer’ (KYC) requirements. Essentially, regulators say they are concerned about money laundering and protecting consumers. Of course, guidelines designed to root out dodgy practices and companies, and enhance consumer protections should be welcomed. However, as we’ve seen with the draconian bans in places like China, some regulators appear to be opposed to the principles of DeFi. You could argue their priority seems to be more geared towards maintaining the status quo. In other regions, especially in the developing world, DeFi has been readily embraced. European regulators too seem to be more willing to see how DeFi evolves – especially when compared to some of the more cautious noises coming out of the SEC. This push-pull between creating a safe DeFi system versus governments seeking to maintain control and protect vested interests will be a recurring theme in the next year.

Outside of regulatory battles, I think a lot of DeFi innovation will focus on improving security and tackling scalability issues. Much like the challenges that Bitcoin has overcome. There’s also plenty of work that needs to be done to make DeFi more accessible to people and generally improve the user experience. With respect to NFTs (a tangible example of DeFi in action), I also expect that as initial enthusiasm cools somewhat, we will see more focus on new use cases – with potentially very exciting results.

 

 

Business

What Every Small Business Should Do

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The majority of the difficulties associated with establishing a business stem from failing to accomplish the small things correctly. The basics will lead you to the top, as any competent instructor has stated at some time.

If you’re thinking of starting a small business, make sure you follow these 10 small business rules:

1. You must keep track of your finances.

Lack of capital, is the leading cause of small business failure. You must undertake proper financial planning and fully comprehend the business levers that might affect your cash flow.

Do you purchase stock?

  • What amount of cash should you have on hand?
  • Do you have a system in place to collect money from clients?
  • How long do you have to wait for them to pay you?
  • Do you have any loans that you need to repay?
  • Do you rely on suppliers whose prices fluctuate according to market conditions?

 

2. You must create a data-driven culture.

The better your business decisions are, the more data you can track and utilize to make them. Business often necessitates certain “intuition feel” judgments, but it’s preferable to provide your instincts with as much knowledge as possible.
Tracking your company’s key performance indicators (KPIs) and understanding why they rise or fall may help you make decisions that will help you develop and stay on track.

 

3. You must participate in Lean Planning.

Rather of creating a long-written document that you utilize once and then file away, it’s critical to create a strategic and financial plan and track it on a frequent basis.

Planning is a continuous tool that should be used to understand the assumptions you have about your business and whether or not those assumptions are valid, or whether you need to make changes and adapt your assumptions.
60 percent of small companies in America fail due to a lack of cash, not a lack of profits—by utilizing Lean Planning, you can rapidly determine if you have made any financial assumptions that will have a negative impact on your cash. Maybe you assumed you’d get paid every 30 days on the dot.

By engaging in ongoing planning and then tracking the actual results of your business against your plans, you can quickly determine if you are getting paid every 45 days, and if so, you can increase your credit line quickly and appropriately, keeping your business cash healthy—before you get into trouble.

4. You must have a strategy in place for attracting and keeping top employees.

We are continuously on the lookout for top talent in our industry, therefore we make it a point to follow talent in our region on a regular basis and design outstanding retention programs and rewards.

Take some time to consider your company’s culture and what you want it to be, and make sure that culture is factored into your recruiting selections. We utilize LinkedIn on a daily basis to follow and acquire talent.

5. Every day, you must listen online.

Even if you just operate from 9 a.m. to 5 p.m. Monday through Friday, your business is “always on.” Every company should set up internet alerts to monitor what their customers are saying about them, their rivals, and the market in general.

Google Alerts is a fantastic (and free) tool for “listening” to what’s going on online. Be the first to know when a consumer leaves a negative review or when someone praises your company online. Use these methods to remain ahead of the conversation and capitalize on it. You need to get a business phone number too.

6. You must engage in marketing that generates a return on investment.

Small companies frequently tell us that they have no idea what marketing is. What should they spend their money on? Is it effective? Is it better to promote on the radio or on the internet? Should they believe the Groupon or Comcast salesperson who tries to persuade them to distribute discounts to the general public or buy local TV ads? What is it that works?

What does not work?

Small company operators should begin in venues that are both free and simple to access. Begin by forming relationships with local companies and company owners. Find out what it is that they do that is effective. Find out how visitors find your website and where they come from by using Google Analytics and your website.
Customers should be questioned about how they learned about you. And if you do decide to promote, make sure you know how to track it. Make a unique offer and keep track of it. Only provide one type of service or product. Repeat your successful marketing efforts after learning what works and what doesn’t. If you won’t be able to measure the results, don’t invest the money.

 

8. You must communicate with your clients.
Every company should communicate with its clients as frequently as feasible. If you own a retail store, talk to your customers at least once a week (if not every day). Discover what they enjoy—and what they despise.

If you own an online business, send a brief survey to your consumers or ask a few survey questions after they check out. Make a call to them. People enjoy talking and being asked for their viewpoint. Negative feedback might be difficult to hear, but it’s important to hear it and understand how you can improve your business for your consumers.

9. You need to know your competitors.

Both your direct and indirect rivals must be known and understood. You should always be aware of your rivals’ activities, including what they are doing, how they promote, and how they price their products.

You may be the only one of your kind in your town or sector, but that doesn’t mean you don’t have indirect competition. In my town, a small do-it-yourself tie-dye store has no direct competition.

They do, however, provide activity-based events and compete with all of the other businesses who host birthday parties and group activities. They also compete with other tie-dye merchants at Saturday Fairs and Markets. Even if they don’t have direct competition, they need to know how to position themselves against all of their indirect competitors.

10. You must have a larger goal in mind: a mission.

People like to work for companies that are more than simply a money-making machine. That isn’t to say that you can’t set sales or profit targets; it only means that if your employees believe they are part of a larger purpose, they will work harder and be more loyal.

 

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5 Ways That Businesses Can Get the Most Out of Their Digital Marketing

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Everyone knows that the world of marketing has been changing for the last two or three decades. The days of traditional marketing through billboards, radio ads and television commercials are still around, but something new is taking the world by storm. Digital marketing is the way of the future and has proven to be more beneficial for businesses everywhere. It’s not that traditional, offline marketing is completely dead, but it is difficult for business owners to deny the power of digital marketing and what it can do for their businesses.

Because the world has changed so much, people have now moved online, so a business owner needs to learn how to market their products and services digitally. If they do not, there is a huge risk that they will not be around much longer. However, the problem is that most business owners do not understand digital marketing. To begin, most owners do not fully understand marketing altogether, and they go for hiring a marketing agency to do this for them. But now, when you add a digital aspect to this scenario, it makes it even more confusing to the owners. If a business owner starts with simply knowing what digital marketing can do for their business and how to get the most out of it, this is a great place to start.

 

  1. Utilize Email

If your business is not using email marketing yet, you should be. It is far from being dead, and many people are just beginning to tap into what it can actually do for their business. To make the most out of your digital marketing efforts, advertising your company through email is essential. It could very well be the foundation of your marketing online. Email is all about keeping the channel open to your customer who you might not have seen in a long time or being available to someone who is simply interested in what you have to offer. Send occasional, nurturing emails to your following and customers to keep the dream alive.

 

  1. Build a List

Next, you have to build a list. Many marketers and business owners will tell you that you must have a list in order to survive. Now, the list is nothing more than a collection of information from your customers that includes their names, numbers and email addresses. You need this valuable information so you can email them and get in touch with them when things are dry. To get the most out of digital marketing, you should always be gathering this information from them and storing it for future use. Gather this information by running online advertising to generate leads.

 

  1. Do More Videos

To be the absolute best at digital marketing, your business should be using more video. This is because research shows that consumers want to see videos above anything else online. They don’t want to see still images and text, but they want to see you rock it through the camera. The good news is that this isn’t hard to do with modern innovations. Use your smartphone to record simple videos of your business and use these clever videos as the creative part of your digital marketing to catch their eyes and stop them from scrolling. The other great thing is that you will feel more like a movie star for creating videos.

 

  1. Build a Following

Now, it’s also important to build your online following. These days, it’s all about how many people you have “following” you online. These people are your audience, which is one of your valuable assets online. Don’t think that these are just virtual people that offer you known value. They are actual people who follow your company because they might be interested in what you have. It’s important to always build your following online. Increase your page likes and your audience, and your products and services will practically sell themselves. YOu can run specific campaigns to increase your following.

 

  1. Learn How To Target

To get even more out of your digital marketing, learn how to target the right people. Remember, you are doing all of this online marketing in order to reach people in hopes that they will make a purchase with you. To do this, you have to put yourself in front of the right people, not just anyone. But be happy, because online marketing makes it easier to find your customers. Learn how to navigate with digital marketing to find your right audience, and this will also make you stronger as a whole in your company. You will know your customer’s pain points, what they need and what they’re saying.

If you put a bit more effort into your marketing effort by learning how to do it digitally, you can definitely increase your profit and get the most out of it. With the right strategies and a little education, you can make anything happen online.

 

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