Too much, too soon? That is the question hovering over decentralized finance, which in 2020 is having a moment … and then some.

Before the coronavirus pandemic hit the U.S. in January, it was a $1 billion business. By July, some $4 billion was tied up in DeFi, and the only thing matching its momentum was the hyperbole surrounding it.

“How Decentralized Finance Can Change the World Economy,” read an Aug. 10 Tech Times headline.

“How DeFi Will Reshape Financial Services,” read an Entrepreneur headline from six days earlier.

“The Great Potential Of Decentralized Finance in 2020,” read another Entrepreneur headline, on July 21.

While there was some wariness of this being a bubble, others believe that decentralized finance is merely scratching the surface of its potential, that it will indeed disrupt the financial industry badly in need of it.

In other words, the best is yet to come.

So what is decentralized finance? As its name suggests, it is a monetary system that operates without the need of a central authority, like a bank or governmental body. Rather, it is built on public blockchains, particularly Ethereum. Put another way, people can create decentralized apps — i.e., Dapps — on these blockchains, the most common of which allow users to lend or borrow cryptocurrencies.

Ethereum, released in 2015, offers the second-most valuable cryptocurrency, behind Bitcoin, and is the first blockchain to feature both smart-contract technology and its own programming language. Vitalik Buterin, the driving force behind Ethereum, went so far as to call it “the foundational platform for everything” upon its release, touting its potential impact on sectors ranging from supply chains to elections, and from ecommerce to real estate. Others seem to agree about its potential, having labeled Ethereum “the world computer,” while noting in particular what it might mean for DeFi.

Tech CEO Rod Beckstrom offers the best explanation of the latter concept. Author of the 2008 book The Starfish and the Spider, he uses those two creatures to analogize organizations. While some, he said in 2009, have a centralized management structure reminiscent of the spider’s central nervous system, others are like the starfish, which does not. If you were to cut off one of its five arms, it would grow back. If you were to cut off all of them, five new starfish would be formed. It is, he believes, “perfectly decentralized.”

And so it is with DeFi, which as mentioned earlier is expected to change the face of finance. The industry is, Framework Ventures founder Michael Anderson said at the Global DeFi Summit on Aug. 6, “the largest single market in the world,” and in his estimation has not undergone significant innovation in four decades. DeFi, with its promises of agility, interoperability and transparency, can be expected to change that. In fact, Anderson added, forward thinkers in the field will in time come to be viewed as “the new Goldman Sachs.”

That is far from a novel viewpoint. Observers believe DeFi has the potential to reach the world’s vast unbanked population, estimated to be somewhere between 1.7 billion people (according to Tech Times) and 40 percent of the global population (according to Other experts see traditional financial professionals migrating to DeFi, and legacy fintech being rendered obsolete.

Kain Warwick, founder of the DeFi derivatives platform Synthetix, told that DeFi is still in its “very early phases,” but is optimistic about where it is headed. The same holds true for Yuan Gao, Neo Global Development’s head of marketing, who told Neo News Today that a “major transition” is underway.

And right now, there are no signs of stopping.