DeFi is the abbreviation of decentralized finance; it is an experimental form of finance, without dependence on central financial intermediaries, such as brokerages, exchange platforms, or the bank itself. DeFi allows its users to lend (or borrow) third-party funds, speculate on the prices of a series of assets through derivatives, trade-in cryptocurrencies, insurance against risks, and earn profits in savings accounts.
Influence of DeFi in the cinema
Due to the pandemic, the film industry and DeFi can have many synergies. An example of this could create a decentralized film fund, in which financial funds take part in the success of films produced through the platform. Using blockchain technology and decentralization, producers would present their projects to the community, which would vote on which film to finance. The winning project would receive funding from the funds, which would be managed by that same community.
The DeFis are created
In the example cited, film production would be “outside” the traditional production chain. Thus, there is a need for oversight by members of the DeFi community to ensure the proper use of the funds allocated to the production. They would distribute the completed film through the platform so that the community that integrates it (and that has voted for it) can follow its evolution to finally see the finished product.
Accounting would be a very transparent process since the currency paid to see the film would go back into the DeFi fund and then be distributed to all the parties involved according to the codified contract; since transactions would be recorded in the unalterable and transparent ledger, there would be no confusion in knowing how the profits were being used. This level of transparency is new to existing fragmented financing, production, and distribution processes.
The DeFi ecosystem
In this type of ecosystem, producers, who otherwise would not have access to financing for their films, now have the opportunity to see their projects crystallized. Ordinary people, who are usually at the expense of the “whims” of Hollywood decisions, would finally have a voice and vote in the films they produce. Thus, financiers can make smart decisions about the films to finance, depending on what the public wants to see.
By taking advantage of the crowd’s popular wisdom, each production would have an audience made up of its followers, who would be organically helping the promotion and dissemination of the film once it was released. Unprecedented transparency in the use of funds, and the distribution of profits, would exponentially increase the number of people willing to invest in films, thus ushering in a new “golden age” for the film industry.
Golden age of decentralized cinema
Transparency in investment in productions will be an additional attraction for financiers wanting to take part. The more capital there is to produce films; obviously, there will be more films and filmmakers with interesting ideas providing excellent content to their followers worldwide.
Hollywood should open up to blockchain to interact more actively with new audiences, especially now that efforts are being made to decentralize finance. The same tools used by fighters for financial liberation will be the same tools used for the film industry: decentralization and blockchain technology.
What do you think about this topic? Do you think the influence of DeFi has been important in today’s cinema?
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Image from Gerd Altmann via Pixabay.com under Creative Commons license.