Traditional finance is based on "If Else Algorithms" same as crypto yet DeFi is ultimately laced for sustainability and here's how

You probably didn't know due to not paying close attention but traditional finance practices up until this point is controlled by a system of rules designed to cheat you but make you believe you actually have a chance at winning.

"If Else" is what these rules(algorithms) are called.

If you're a programmer or simply tech savvy, you'd probably been exposed to this algorithm, but if not, don't worry, I'll explain it but fair warning, I never thought taking that Java tutorial would come in handy one day, well, not the way I would have pictured using what I learnt, but a win is a win.

Not to confuse you, Java is a programming language, and "If Else" is a conditional, think "smart contract" that "self" executes when certain conditions are met, but of course, the difference between If Else applied in traditional finance and smart contracts applied in decentralized finance is the mode of execution.

With decentralized finance(crypto), this process is autonomous and changes can only be made to the protocol via a network consensus, while, with traditional finance, execution is manually carried out so the outcomes are basically based on a centralized body.

If Else is applied in a lot of places or instances in life, it is fascinating when you actually think of it that no matter what human builds, everything effectively traces back to nature and its influence on life.

When the rain falls, the ants don't come out to seek food, but when the sun shines, they come out for food.

So the conditions would look like this:

"If the sun shines, come out to gather food Else stay indoors"

As weird as that sounds, it is basically how life works: actions are taken when conditions are met, but outcomes can be largely influenced if a central body sets the conditions(rules).

If Else In Monetary Policies

Central banks, such as the Federal Reserve in the United States, have the authority to adjust interest rates and the money supply to influence borrowing costs, spending, and investment.

One might ask, why does this system even exist in the first place? Why shouldn't everyone be let alone to trade at their own risks of losing everything, I mean, don't we sometimes end up there either ways?

I think about this everyday so the one explaination I can derive from this is that the system has to protect its own interest, so to achieve this, a structure is designed to make the people believe they are in charge so the system can leverage that trust to deploy these rules that manipulates the outcomes of events.

Inflation is a government engineered event, same as deflation majority of the time!

Typically, the government believes they are times inflation is too low and they decide to lower interest rates so as to stimulate economic activities as they say and boost inflation because when loan rates are low, more people will take out loans, causing increased money supply and thereafter devaluation.

The If Else conditions here is quite simple

"If people aren't spending enough, lower interest rates Else increase interest rates to discourage borrowing"

By design, we are made puppets by the establishment we supposedly gave power. Same thing is applied to fiscal policies where taxes are increased at wish, same with exchange rate policies, supply side policies and price controls where the system literally comes down to decide what the cost price for goods and services should be.

But the question at all times should be: who is benefiting from all this?

The truth is, if an economy was left to take effects on its own, a lot of people would be forced to do actual work and power wouldn't be easily wield. So to ensure maximization of value in doing little to nothing, this structures are raised to manipulate the system to the merits of a few.

The sustainability that comes with DeFi

When we talk about sustainability in crypto(DeFi) we are most definitely not saying that crypto is better than the traditional finance system in that it won't go through any of the storms fiat goes through, but that the building and execution environment is different from the fiat monetary system thus there are bound to be more effective actions taken to control the storm.

Unlike the fiat system that has proven to be shit over the years and the all supposed "store of value" have been losing value over the years, well governed cryptocurrencies(assets, protocols, projects and blockchains) on the other hand have been appreciating in market value and advancing in developments.

Why?

Governance of course, the effectiveness of crypto governance protocols makes every network participant desire to stay true to the cause knowing fully well the cost of not doing so.

With traditional finance, there are zero costs up there in the sit or circle of those that makes the decision, this is different with crypto(DeFi) and losing that influence almost happens immediately here whereas it could go unnoticed and unpunished with tradition finance.

This makes this ecosystem sustainable by design, the effective and equal tools given to everyone to influence the outcomes of events or the conditions to start off makes crypto laced up for long term resilience.

This is something in lack with our current financial walls, so while it does have its merits there, only a few get to feed from that basket, the rest are simply left to carry the losses.