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Integrating e-commerce into DeFi

If customers are holding wealth in Decentralized finance, why not create more ways for them to spend on products and services?


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Rahmat Feyisola

a year ago | 5 min read

If customers are holding wealth in Decentralized finance, why not create more ways for them to spend on products and services?

In this article, I’ve identified why we should have more conversations like this and I’m happy you did choose to read.

First, let me take us back to what Decentralized Finance (DeFi) is all about; DeFi is a platform for money saving where you have total control of your finance instead of traditional banks. Better still, it is just like having a Piggybank that you are in control of at home, but in this instance, you are in self custody of digital cash.

This digital cash is not dependent on a bank or other entity holding it to provide you a digital representation of your money, instead DeFi offers financial instruments where customers interact directly with the smart contracts on the blockchain.


These smart contracts are a lot like good robots that follow a set of rules to help carry out activities on your stored financial assets, instead of using bank tellers and intermediaries, you learn to use and trust the set of rules programmed on the blockchain.

This is why Blockchain is actually such a huge innovation starting with Bitcoin and Ethereum. The point is that you have a private pass key, more like an email’s password; you guard your email password and you give out your email address to others and this is exactly how it works in DeFi.

Others can know your public wallet address which is like an email address, but you’ll never have to share your private key. Also, being in control of your assets means no one can save you, there’s no customer support like when you lose your cash on the roads or streets. When you own digital cash, the only thing you can do is store your private key on Recovery phrase to backup in a safe place to be restored if you ever lose your gadgets.


The recovery phrase for backup is sometimes called the seed phrase or mnemonic phrase, it is a 12, 18, or 24-word pattern generated each time a new wallet is created. Unlike your private key, which relates to just one blockchain address, the recovery phrase is a derivative of your entire wallet, and all private keys stored there. However, you cannot restore funds that are taken if you inadvertently give out your private keys. The thing about self custody is that “lost keys = lost money”.

Hang on, as I am taking you closer to more juicy contents.

In DeFi, we now have applications that let your digital money work for you but you cannot take advantage of that until you are in control and secondly, you have to give commission to these new automated money robots called DeFi apps to put your money into work.

This is precisely why we believe DeFi can democratize assets to grow anyone’s wealth regardless of where you live and how much money you have. DeFi has numerous uses, from yield farming to trading, lending, borrowing, liquidity and now, we are looking at E-commerce.


In the coming years, there’s going to be an expansion of technologies where apps would be more built on blockchain and DeFi becomes more mature.

Integrating e-commerce into DeFi means building an e-commerce app on blockchain as that is where DeFI transactions take place.

This process has the potential to heighten security of E-commerce from potential threats from hackers.

Also, Internet of Things (IoT) currently has several E-commerce applications and many safety concerns, an increase in internet-based products means better chances for hackers to steal your data on E-commerce apps.

Whereas, Blockchain-infused IoT adds a higher level of security to prevent data breaches by utilizing transparency and virtual incorruptibility of the technology to keep things “smart.” If E-commerce apps are built on blockchain, they are encrypted and can even self-diagnose and heal possible breaches.

Early blockchain solutions have shown the potential to reduce costs for products and services, particularly sensitive products and services that people would like to be purchased anonymously.

An E-commerce DApp will reduce costs earned by middlemen, improve access to information across stakeholders for large businesses and streamline businesses processes. There will be an advanced system for collecting and sharing of private and sensitive products/services.

Accessing capital through blockchain can turn out to be extremely simple compared to normal raises for businesses, especially SMEs. Now, brands can go the DeFi route to raise capital from anyone, anywhere in the world without any third-party fees or onerous regulations.

This usually works with people buying tokens that can be redeemed against future purchases, subscriptions, or loyalty points.

With the current E-commerce apps, if your eCommerce platform goes down during major sales days, you could be facing irreparable damage.

However, an app built on blockchain are able to solve security problems owing to their distributed and tamper-proof architecture.

Currently, much of the current customer offerings in DeFi use stable coins because of high volatility in most tokens and coins, these stable coins are pegged to fiat currencies like USD or GBP, so their value is less volatile.

“You can think of a stable coin as being similar to the balance that you have in that PayPal account, the major difference is that it’s managed on a blockchain, so you can use it outside of that service where you acquired it, then transfer it around.” I think services like this are really attractive for use in E-commerce compared to what Decentralized finance has been known for historically, with high volatility trading.

For example, each unit of Tether (USDT) has a monetary value of US$1. Tether (USDT) is a cryptocurrency pegged to the US dollar and currently the most popular stable coin in the market. USDT is totally backed by actual assets in the Tether platform’s reserve account and can be sent anywhere globally much more quickly with lesser fees than transfers at traditional banks and financial institutions. More of these fiat currencies pegged stable coins should be mined and one of their top uses would be using them for E-commerce.

According to Cornerstone Advisors report in 2020, Americans holding cryptocurrencies purchased $31.2 billion worth of retail products and services using Bitcoin and other crypto assets; this report show that there’s significant progress.

In the world of regulations and being globally regulated institution, DeFi would have to work backwards from its amazing innovation to try to fit into legal and regulatory frameworks. It would be great for the government to give out rules on what’s accepted with DeFi early enough. Whilst this may sound centralized, there are existing rules of law and policies our elected leaders make for nation’s interest and it is high time the government started working on DeFi and how to make its usage convenient.

You would agree with the above stated that the time is now to make intentional efforts to ensure integration of E-commerce into DeFi.

I am a certified UX Designer who is happy to connect with you on Linkedin to discuss more Or send an email to feyirahmah@gmail.com

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