The past few months, the notion of 2021′s “Hot Vax Summer” — whether it was realized or not — seemed to be everywhere. But a lesser-known phenomenon in the summer of 2020 — DeFi Summer — was inarguably consequential: The decentralized finance model of cryptocurrencies experienced a meteoric increase in value. One token, Uniswap, went from a $200 million valuation in April 2020 to $15 billion by September.
DeFi Summer catapulted cryptocurrencies into the public eye and started a market frenzy that led to 10 million additional users of the crypto wallet MetaMask. It also raised an important question: Will the future of the digital financial system be built equitably?
Cryptocurrencies are digital currencies that can be held as investments or used to buy goods and services. Bitcoin is widely considered the first decentralized currency, meaning transactions are made across a public ledger rather than a single centralized authority. A decentralized system relies on peer-to-peer confirmation of payments. Banks are not the intermediaries between users, and therefore no transaction fees occur.
Bitcoin was created by an anonymous developer using the pseudonym Satoshi Nakamoto in the wake of the 2008 financial crisis as an alternative to traditional banking. Since then, bitcoin has skyrocketed in value. While a generally volatile asset, a $100 investment made in 2009 on 1,000 bitcoin is now worth almost $50 million.
While bitcoin was initially built around encouraging financial equity, 75 percent of crypto holders are men, according to a 2021 State of U.S. Crypto report. Gender disparities have dogged the financial services industry for generations, but many people hoped that cryptocurrency would usher a new era of diversity into the world of finance. One of the hopefuls was Kinjal Shah.
Shah is a senior associate at Blockchain Capital and an investor in the Komorebi Collective for women and nonbinary crypto founders. She sees the potential to build this new financial system differently and hopes more women and minorities will enter the $2 trillion valued market.
“If this is the future of finance, I want more women to be sharing a piece of that pie,” she said.
Shah is one of the many women and nonbinary coders, analysts and blockchain company founders working to steer digital currencies toward a more inclusive future. She is wary of re-creating the original financial system and actively works against that, she said. “I don’t want new folks entering into crypto to feel like they’re transitioning from old Wall Street to new Wall Street,” Shah said. “I want the environment to feel approachable and inclusive.”
Julia Rosenberg is one of few female founders of a blockchain company in the cryptocurrency space. In early 2021, she was raising capital for her organization Orca Protocol when she encountered a stark reality. “When I started the fundraising process,” Rosenberg said, “I didn’t speak to a single female investor until I was four weeks into the process.” That investor was Shah, from Blockchain Capital.
Both Rosenberg and Shah saw an opportunity to shape the emerging DeFi world differently from the existing tech and financial systems they were accustomed to. For Rosenberg, that meant actively hiring and recruiting women, especially on the technical side. Out of nine employees, Orca Protocol has a female co-founder and chief executive, adviser and product design lead.
Shah studied quantitative economics at Tufts University and worked in traditional finance as an analyst at Fidelity Investments for two years before entering the DeFi space. She said she is used to being the only woman in a room. “Having diversity at the table when you’re making product decisions is going to result in better outcomes,” she said.
Now, in an effort to diversify the blockchain community, Shah partners with Women in Blockchain to fund and support women and nonbinary cryptocurrency founders. “From the outside looking in, the face of crypto is very male,” said Shah. “Now that I’m on the inside, I know so many women.” But their visibility, she said, and access to funding opportunities, is still a work in progress.
Ample evidence shows that diverse teams earn greater profits in all fields. According to a study by the National Center for Women & Information Technology (NCWIT), diverse teams tend to stay on schedule and under budget, demonstrate superior team dynamics and make more money. Yet, said Terry Hogan, founder of NCWIT, women leave corporate technical jobs at twice the rate of men. As Hogan put it: “The enemy is the culture that is the systemic nature of why there aren’t more women in tech.”
Angela Minster has experienced bias against women firsthand, she said, particularly in the digital currency space. Minster works on the coding side of Flipside Crypto, a digital currency company. She said she still struggles with being one of the few women in encryption- and privacy-focused group chats on platforms like Discord and Telegram. To remain up to date on the latest swiftly moving blockchain innovations, engaging in online communities is necessary, she said. But because of the culture in some of these chats, Minster said she hides the fact that she’s a woman. “There’s a lot of gross talk,” she said. “I try to minimize how obvious it is that I’m a woman.”
According to JeffriAnne Wilder, a senior research scientist at NCWIT, microaggressions and implicit bias are major barriers for women in tech. “Your stereotypical ‘tech geek’ isn’t a girl,” she said. One of her studies involved asking students from kindergarten through 12th grade to draw a scientist. Both girls and boys drew male scientists. “It shows that even by the time kids are in early elementary school, that messaging is already solidified in place,” Wilder said.
This is the precise messaging Maggie Love, founder of SheFi, hopes to change. She entered the blockchain space in 2017 and immediately noticed the lack of female and minority representation. One major challenge, she said, was the lack of accessible education on the topic. “Women were not talking about this in their friend groups, they were not talking about it at dinner,” she said.
Love designed a system in which cohorts of women could use pooled money to become crypto-literate. They would learn to borrow, invest and trade cryptocurrencies. She soon had a waitlist of more than 200 women wanting to participate. She said that when she started, many women would apologize before starting a conversation about money, feeling that it was a rude or uninteresting topic to bring up. “No,” she told them, “let’s talk about it. Women should be talking about this.”
One of the women in the latest SheFi cohort is Shailee Adinolfi, an international development specialist and mother of two young children. She said she joins virtual SheFi discussions and listens while putting her children to bed. “This is the first place that I’ve talked with other women about money,” she said, “aside from how much it costs for the summer camp or day care for my kids.”
Adinolfi’s interest in digital currencies stemmed from her desire to support global financial inclusion. She hopes to bridge the gap between unbanked communities and those with access to central banking. For Cleve Mesidor, bridging the wealth and policy gap starts at home.
Mesidor is a member of the Haitian American community and grew up in Queens. She is also an early crypto pioneer and head of the National Policy Network of Women of Color in Blockchain. According to Mesidor, “there’s a lot more work to do” when it comes to involving women, and specifically women of color, in the crypto space.
NCWIT released a report in March of 2021 based on data from the Bureau of Labor Statistics that Black women make up only 3 percent of the computing workforce in the United States. “We know that there are women and folks of color entering that space,” said Wilder, “but they’re not staying because of structural barriers related to promotion.” Wilder said that despite recent improvements in the tech industry’s employment pipeline for women and nonbinary people of color, they often feel isolated and marginalized and don’t have the support they need once they start working, which leads them to leave the field.
“Tech is right now, but tech is also the future,” Wilder said. “It’s important for us to think about how we are more inclusive to folks of color and make sure that they are gaining access to that space. That is an area that can reduce wealth gaps, and we don’t want women of color to be left out of that.”
With cryptocurrencies emerging as a financial asset class, Mesidor said that it is more important than ever to change the narrative around diversity in the financial system. “If we’re going to create a pipeline that is inclusive,” she said, “we need data to show who is getting access to venture capital.”
In her role as a policy adviser and a former Obama appointee, Mesidor has lobbied on Capitol Hill many times, she said. Most recently, she worked with the Blockchain Association to explain the negative impacts that cryptocurrency regulation could have on communities of color.
“Innovators of color are the hidden figures in crypto. We’re fueling the ecosystem,” said Mesidor. “This is a free marketplace; everybody should be able to participate. We can’t miss this opportunity.”