Introduction

The First European Web 3.0 App for Digital Assets

Where it all started.

The origin of banking goes back to Babylon, where as early as the 2nd millennium before Christ, lending on goods (specifically grain) was already practised in temples. With the birth of money in Lydia, around the 7th century BC, the concepts of money lending and deposits started to emerge within a religious framework before being adopted by civilians. Later, under the Roman Empire, private bankers and wealthy individuals continued this lending and deposit activity, taking advantage of it, advancing money on behalf of their clients, in return for interest.

By the end of the 19th century, during the Industrial Revolution (creation of the steam engine, mass production of steel, coal, and textiles...), the development of banks was favoured for three factors: The development of fiat money, the scriptural money, and the use of securities to finance business enterprises. This period also corresponds to the creation of large banks such as Société Générale and Crédit Lyonnais in France, Deutsche Bank in Germany, and Barclays Bank in Great Britain. Little by little, the state began to control the banking activity.

Things really started to change in the 20th century, after the stock market crash of 1929-reaching an inflation level never before seen. Governments decided to strengthen their authority over banks and began imposing regular checks. In the United States, for example, President Roosevelt strictly separated merchant banks from deposit banks. In 1945, France nationalised several banks, including the Banque de France. This nationalisation ultimately leads to the creation of Central Banks that even today have power on monetary policies which impact our future as investors, and savers in years to come.

The magic printer.

To better understand how Lyber was created, it is important to understand how powerful Central Banks are. This power stems from their ability to “print” money and from being able to create monetary policies aimed at fighting inflation. Central Banks create money by financing the budget deficit, a process called, “run the printing press.” This expression reflects the function of the Central Bank-financing the public deficit by crediting the account which the State will hold in its books in the amount of this deficit. Central Banks thus grant an advance to the Public Treasury, which results in an injection of liquidity into the economy (via payments made by the Public Treasury) and an increase in the money supply (equivalent increase in demand deposits and/or banknotes in circulation). If this advance is not repaid, it can generate a behaviour of budgetary laxity and systematic financing of the public deficit, which would end up causing inflationary pressures, reflecting both the overheating of economic activity, and a depreciation of the currency.

Quantitative easing.

QE was the answer to the 2008 crisis in countries like the United States, Japan, and England. The Central Bank buys securities representative of the public debt on either the primary or secondary markets, in order to lower or contain interest rates; allowing the Treasury to borrow under better conditions on the financial markets. It therefore does not finance the entire budget deficit, thus forcing the government to resort to financial markets to cover the remainder of its budgetary needs. When the Central Bank buys government bonds on the primary market, it creates money-indirectly. The Central Bank pays for the securities it acquires using liquidity that it creates ex nihilo. The Treasury will use part of this new money to pay its officials or national creditors (suppliers). The bank accounts of the latter will therefore be credited with the sums in question, which inflates the money supply.

Bitcoin, an answer to this supremacy?

Bitcoiners recognised that the only winning move in politics was-not to play. So, they decided to create their own monetary system, outside the purview and supervision of the State, entirely without restriction. By creating Bitcoin, Satoshi Nakamoto ultimately took the State’s most treasured possession, its right to unencumbered money creation. Bitcoin often draws comparisons to digital gold, and with good reason. The latter combines the rare and monetary nature of gold with the digital portability of modern fiat money. The total amount of bitcoin will never exceed 21 millions, meaning inflation will ultimately be zero. Although Bitcoin is still relatively nascent, it has significant potential as a future store of value based on its intrinsic monetary characteristics. New bitcoins are not printed or created by a central bank or centralised entity. They are discovered through a cryptographic calculation process.

The rise of tech crypto & innovation.

For a long time, crypto and especially Bitcoin have been seen as a means to speculate or to store value. For institutional and retail investors, Bitcoin was considered a hedge against inflation. Enter smart contracts technology brought by Ethereum in 2017 and which fully emerged in 2020 with the DeFi summer, which demonstrated new usages for the blockchain. Here we see capital rotating from what we call money-crypto to tech-crypto. Crypto-assets are no longer seen as stores of value but as productive assets. With emerging trends such as DeFi, NFTs or play-to-earn games, the possibility of earning passive revenue from owning crypto are on the rise as people start to realise that they should make their assets work instead of blindly holding them.

As a result, smart contracts platforms have gained steam and traction in 2021 with dApps being built on new blockchains such as Avalanche, Harmony or Solana. Those innovative platforms are filling the gaps left by an Ethereum blockchain unable to scale up, with Eth 2.0 being postponed yet again. Having more efficient blockchains also allow for further innovation in what is now called DeFi 2.0, allowing new mechanisms such as self-repaying loans or use of LP as collateral. Outside of the DeFi world, crypto-assets and technologies are also changing the way people organise themselves in communities on the internet and soon on the metaverse. In fact, Decentralised Autonomous Organisations (DAO) are a way for a group of people to democratically assemble and make decisions in a trustworthy and decentralised manner. Finally, blockchains also constitute the keystone of web 3.0, which could be defined as a future iteration of the web. Privacy oriented and a place where you own your content in opposition to web 2.0, where your data is gathered and used by multinational companies.