WallStreetBets App to Bring DeFi and CeFi Closer Together

The WallStreetBets app (or WSB DApp) has revealed a strategic partnership with Balancer, a DeFi automated market maker protocol. This company will bring exchange-traded portfolios to the platform, as well as add additional legitimacy to the project overall. This is the WSB DApp’s next major milestone, occurring just one month after adding synthetic stocks to their service. 

WSB DApp Continues to Mature

The aim of this partnership is to bring new features to the WSB DApp, and expand user’s options when engaging with the platform. In particular, it adds exchange-traded portfolios (ETPs), a long-awaited tool among its fanbase. ETPs are essentially collections of different assets which can be tracked and traded altogether. 

Many investors favor them as they are a simple method of diversifying a portfolio, as well as opening oneself up to a wider range of assets with ease. WSB DApp’s ETPs are, in the words of their press release: “baskets of synthetic stocks governed and developed by our community, and tradable without a middle-man — immune to Wall Street’s dirty tricks.”

The ethos of this project is identical to the WallStreetBets subreddit, which has always focused on leveling the financial playing field and giving retail investors a chance to thrive in the markets. Jaime Rogozinski, the founder of the subreddit and strategic partner at the WSB DApp, has commented on this himself, stating the platform aims to “result in stronger, more democratized markets and will empower individuals around the world” as well as “fight back against corrupt institutions and to end dependence on them altogether”.

The WallStreetBets community has existed for some time, but it gained notoriety when Robinhood and other retail trading platforms began blocking stock purchases on GME, AMC, and other prominent assets. As a result, members of the subreddit became disheartened by the corporate world and chose to act in defiance against it, helping each other along the way. This is why the WSB Dapp was built, as a means of engaging in finance with minimal interference from institutions. 

Balancer’s views appear to align with this – in their own press release, they called WallStreetBets a “grassroots movement” and added they have a “deep-seated belief in the retail investor”. To grasp the nature of this partnership, it helps to understand of what exactly Balancer is.

The project is a DeFi-based automated market maker (AMM) and liquidity provider. While Balancer’s own application focuses specifically on making decentralized crypto trades, in their partnership, they will be helping facilitate WSB DApp’s synthetic stock trades.

Balancer will be creating token pools which can be filled with synthetic stocks, allowing them to be traded together, acting as an ETP, capable of holding a total of eight assets. Balancer is also able to reduce the WSB DApp’s Ethereum gas fees, as pools mean fewer transactions are needed compared to traditional order books. 

Finance is Undergoing a Monumental Change

It is often hard to gain perspective of something while living it, but after just zooming out for a moment it is undeniable that the financial landscape is seeing great and widescale change. The fact a project like the WallStreetBets app can even exist, allowing for blockchain-based, tokenized stocks to be traded without corporate intermediaries, is a huge thing. 

It becomes even more fascinating when context is added– this platform was built from a mix of fear and anger ignited by people watching short sellers try to bankrupt companies like GameStop merely to gain a profit. And the fact retail investors were able to fight back and cause these short sellers to lose billions as a result, and even save GameStop from the brink of collapse, is bewildering.

People’s attitudes towards money are shifting. There is a growing desire for individuals to be their own financial custodians, where they no longer need to hand their money over to intermediaries. This is why DeFi has been soaring; incidentally, it is also why Uniswap was recently caught in the SEC’s crosshairs, as it has made regulators raise eyebrows and begin investigating this type of activity.

As of recently, we have seen huge progress towards blockchain tech being integrated with traditional finance. Not only with the WSB DApp, but with others such as Bitfinex, who just announced a new project that marries the two concepts together. The platform will give users the ability to trade tokenized versions of publicly listed stocks. 

In other words, bridges are being built between these two different financial sectors. This could mark the largest alteration to FinTech the world has seen in years. It will be fascinating to see where this relationship will take the industry to next.

Do you think tokenized assets will become mainstream among traders? Let us know in the comments below.