The 2018 North American Bitcoin Conference happened at a strip club in Miami. 87 speakers shared their views on the present and future of the blockchain-powered industry. But only three of them were females.
This shows how emerging domains, like DeFi and Web3, are prone to inheriting the ‘bro culture’ dominating the tech industry. Notably, tech and finance, two of blockchain’s main areas of disruption, have a history of inadequate inclusivity.
In 2021, tech companies had less than 29 per cent women and 22 per cent ethnic minorities across all functions. Certain areas, like cybersecurity teams, had an even lesser representation for these groups, 12 per cent each.
There’s also around a 6.9 per cent pay gap in favour of white employees, while women own merely five per cent of all tech startups in the US.
However, new standards are steadily emerging in DeFi and Web3. There is a growing dedication among innovators to champion diversity, equality, inclusion, and belongingness (DEIB) from the get-go.
Anna Arpilleda, the Head of People at Archblock states, “The opportunity to create a diverse environment starts with our recruitment approach and process—each and every employee plays a role in actively supporting this. We encourage applicants with diverse backgrounds across various industries and functions to apply for roles.”
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She adds that decentralised finance can provide access to new opportunities regardless of background and physical location.
Where DEIB stands now
Rob Behnke, the CEO of blockchain security solutions firm Halborn, says, “Decentralised finance came about only five years ago. But that said, these have already become truly global phenomena, already promoting financial inclusion in several countries.”
Behnke’s analysis is spot on. Yet, it’s crucial to take stock of the current state of DEIB in DeFi. This’ll provide a reality check for industry stakeholders to channel their efforts in the right direction. And thus make these emerging domains genuinely progressive in the long run.
About nine per cent of US citizens owned cryptocurrencies in 2022. Nearly 74 per cent were males, while females represented only 26 per cent. The US thus has the widest gender gap in crypto ownership among 26 countries surveyed by Statista. Vietnam, however, had a fairer balance: 55 per cent male ownership vs 46 per cent female.
Quartz found that only 8.5 per cent of the 378 venture-backed crypto startups launched between 2012 and 2018 had female Founders or Co-Founders. This didn’t change until 2022 when 90 per cent of all crypto startup founders were males. They also received 95 per cent of the total funding, signalling VCs’ greater interest in supporting male-led firms.
Besides gender, ethnic and racial minorities have also faced instances of bias and discrimination in crypto. When CryptoPunks launched Meebits in 2021, Bloomberg reported how dark-skinned and female Meebits sold for roughly 30 per cent less on OpenSea, vis-à-vis the fairer CryptoPunks.
The above facts reveal a long way to go before ‘everybody feels welcome, represented, and heard’ in DeFi and Web3. Yet thankfully, innovators in this space increasingly realise the business case for DEIB.
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According to McKinsey & Company, gender-diverse companies have 48 per cent better performance than their peers with non-inclusive policies. Similarly, ethnic and cultural diversity increases profitability by almost 36 per cent.
Arpilleda resounds with these findings when she says, “DEIB is not just the ‘right thing to do’—it’s a creator and driver of business value. So, at Archblock, we’re committed to building an inclusive work culture and environment across our teams in Ireland, Poland, Portugal, Hong Kong, Australia, and the US.”
Harvesting change from the grassroots
“In a decentralised economy, grassroots is all there is and all that matters,” says Behnke. He also points out how folks can access easy, permissionless loans using cryptocurrency despite having low credit scores in traditional finance—an example of how these assets can transform financial inclusion.
Inadequate internet access is still a significant obstacle for underserved communities to access DeFi and Web3 fully. It should instead be considered a ‘basic human right’ in Behnke’s view. But even with billions unable to benefit from emerging technologies like blockchain, there’s a lot that’s inherently good about their evolution.
Both Arpilleda and Behnke, like many others, consider DeFi’s open-source nature a key means to inclusivity. It helps break traditional barriers, letting everyone participate in the digital revolution. DAOs create a true meritocracy, for example, so that community members can be decision-makers irrespective of their gender, race, ethnicity, or geographical background.
This becomes clearer because 23 per cent of Black Americans and 16 per cent of Hispanic Americans are crypto owners, vis-à-vis 11 per cent of White Americans. Likewise, 26 per cent of LGBTQA+ community members in America own some digital currency.
Globally, Chainalysis has shown that Southeast Asian countries, like Vietnam, were among the biggest crypto and blockchain technology adopters in 2021. Also, when people in this region, especially women and the youth, faced massive livelihood loss during COVID-19, they increasingly turned to crypto-based modes of income.
These aspects highlight DeFi’s immense potential to serve people from unstable economies, especially in times of crisis. That’s also why DeFi protocols are currently a go-to means for settling remittances across borders, especially from the West to the South.
In Arpilleda’s words, “DeFi’s most significant contribution has been to provide financial services to people in locations with limited banking infrastructure and volatile currencies. Individuals from frontier or emerging markets can now invest in or borrow stablecoins pegged to stronger, stabler currencies. DeFi enables novel lending methods and revenue streams to help small businesses and entrepreneurs in emerging markets.”
Overall, the decentralised and community-driven promises of the DeFi and Crypto space are aligned with DEIB goals. I look forward to seeing things progress as there is more adoption and younger generations join the workforce.
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