alt Hacker News> Real World Assets (RWA) is the hot stuff these days.
> Uniswap and Aave have been chugging along for years
How hot? I haven't heard of it or them, but that's hardly strong evidence. What do you see?
> One of the reasons is that any infrastructure built on blockchain is reusable for free by everybody
Does that have an impact?
I doubt consumers care about free. They certainly care about high levels of integrity (my money is safe) and availability (I can access my money), as well as profit (interest / gain). I've never heard a consumer say, 'I use Bank Z because their financial operations run on FOSS.'
Mega-banks would seem to dislike FOSS. They want barriers to entry; they will find it inefficient, frustrating, and very limiting - with a significant and direct impact on their bottom lines - to deal with a bunch of amateurs. That's why you're not allowed on the trading floors, electronic or physical, and Goldman Sachs directors won't take your calls (until you establish yourself).
I suspect free matters to undercapitalized startups, amateur financial services, and hackers interested in innovation in this area.
But again, there's a lot I don't know ...
The "reusable for free" aspect is about building ecosystems. Abstractions that can be freely integrated with have low barriers to entry to existing complementary systems being updated to integrate with them, or with new systems evolving to wrap them or work in terms of them.
This (plus the fact that blockchain smart contracts are generally limited in size) has the effect of commoditizing much of any given design, instead of keeping it solely in the hands of whoever made it. Things don't remain proprietary; people build their own versions of each contract that are "compatible" per whatever ABI the ecosystem was relying on, and then the ecosystem generalizes its integrations to include those de-facto-ABI compatible systems as well.
And this makes the path from the development of a new experimental + proprietary + closed-world system that requires direct interaction through its own first-party frontend, through to what investment bankers would call "financialization" of the abstraction that system defines as a general-purpose category of financial instrument, very short on blockchains.
This means that in the modern day, there's often far more promise in how financialized a given system is likely to get, when that system starts off as a set of blockchain smart contracts, than when that system starts off as a proprietary brick-and-mortar financial vendor's firm-internal non-market-tradable security.
Meanwhile, the brick-and-mortar fi-tech firm to get their security financialized, they have to convince brick-and-mortar exchanges to carry it for trading; and then other vendors have to come along and copy that success (usually with all the same exchange-side friction + backroom dealings required); and then someone further has to come along and define an abstraction into existence for those live instruments to be reframed in terms of; and everyone has to faff about redoing how their systems work so that those instruments actually fit the abstraction, since the abstraction will be what financial regulations for the financialized security will be written in terms of, and so their own original versions of the security may end up legally non-compliant. And that whole process takes ages — especially if the fi-tech companies push back on the abstraction standard, insisting that their version should be permitted as a MAY option or grandfathered in somehow.