Denelle Dixon: Stellar Blockchain
Blockchain for good
For some, cryptocurrency and blockchain are merely buzzwords, while for others, they represent a fundamental change in how money and value work. People from different walks of life have also embraced blockchain's potential. One such person is the CEO and Executive Director of Stellar Development Foundation (SDF), Denelle Dixon.
With a background in law, Dixon made a swift transition to internet companies, having served as the Chief Operating Officer at Mozilla before moving to Stellar.
As a woman and a mother, she's one of the pioneering names in the blockchain space, especially in a leadership role, as men have typically spearheaded most crypto ventures. Her role as CEO and Executive Director at Stellar Development Foundation involves heading the development and growth of the Stellar Network, an open-source, decentralized network for digital to fiat currency transfers and vice versa.
She was also one of the CEOs chosen to make a case for blockchain and cryptocurrency at a US Congress hearing headlined by Maxine Waters, the chair of the House Committee on Financial Services, in December 2021. At the hearing, she gave a powerful speech about the future of blockchain, its real-world implications, and financial inclusion through interoperability.
We sat down with Dixon to get some insights about her journey into the blockchain, Stellar network, and her views on this technology. Here are the main takeaways from our conversation:
● Her professional background in law has taught her to think more strategically and analytically, which are traits that have come in handy as she took the CEO job at Stellar. She says that lawyers must understand their clients, their needs, and their pain points to help them to the best of their ability. That's exactly what her team is doing at Stellar, as they put themselves in the shoes of the unbanked folks who have not benefited the same way from the progress of the digital payments made in the last decade. That strategic mindset helps see the bigger picture that impacts the lives of millions.
● For the most part, blockchain and cryptocurrencies have been regarded as disrupting forces. However, change can only be brought from within, where many existing decentralized systems fall short. Many companies behind successful crypto projects have created standalone systems, markedly different from existing financial systems. However, Stellar is building upon the existing systems and taking them on board, combining the accessibility of such systems with the decentralization of blockchain. That way, consumers can use current modes and technologies to benefit from the security and convenience of blockchain for their transactions.
● The highlight of the application of Stellar Network with existing systems (for instance, the integration with MoneyGram) is that the end user doesn't have to understand all the nitty gritty details of their transactions. It's all about interoperability, using the existing banking system, and leveraging blockchain mechanisms. That gives people more power and autonomy, in my opinion, as they don't necessarily need to learn a new system. The lower learning curve of this interoperable financial system makes it a suitable option for ordinary people.
● A significant challenge with developing financial ecosystems that rely on advanced technology such as blockchain is that there's often too much focus on the technology itself and less on the interface. It has happened time and again since the beginning of the internet. There is some revolutionary technology that does amazing things but lacks an easy interface for most people to do those things. That, of course, takes time to improve. However, to penetrate the global market and achieve the goal of more accessibility and interoperability, it's important for developers and designers to iron out the little issues in interfaces and put just as much effort into the front end as they do on the back end.
● The open-source nature of Stellar and other such technologies is based on the idea of 'think global, act local.' While technology development has the potential for global growth, it's the local implementation by businesses and individuals that are making it global. They understand the local needs better than anyone else. And they use the network to meet those needs. Even Stellar's own developers can't do it the same way they can, making Stellar so useful for businesses in developing economies.
● A rather understated impact of blockchain and the subsequent financial inclusion of underrepresented is that women and other often marginalized segments of society can achieve financial independence. And they don't necessarily need to learn the technological ropes to leverage the network. It opens the doors for small-scale entrepreneurs who can now be part of the global financial system and collaborate with international players with easy cross-border transactions.
● The partnership of MoneyGram and Stellar Network is a prime example of how blockchain and cryptocurrencies aren't just about trade and making profits. It has proved that this concept and technology have real-world applications. MoneyGram Access™ is now active in many countries, allowing people to convert their cash into USDC, a stable digital currency pegged to the US dollar, and vice versa. There's no need for a bank account or credit card. All the user needs is their wallet which is an application. And MoneyGram has thousands of physical locations, so they can walk in and exchange cash for USDC.
● Stablecoins have a pivotal role in the larger financial inclusion landscape that blockchain is pioneering. Many innovative use cases on the Stellar Network are linked to stablecoins. A case in point is MoneyGram Access, but there are other examples. The President's Working Group on Financial Markets (PWG) recommendations for regulating stablecoins are too stringent. There are better, less restrictive ways to regulate them through asset-backed reserves and standardized audits.
● Even though Lumens is the native coin for the Stellar Network, it largely relies on stablecoins, which are stable assets. Similarly, there are assets on the network backed by fiat currency in countries like Mexico and Nigeria. This is the reason why the price fluctuations of Lumens don't have any effect on the usage of the network. So the drop in Lumen price against the dollar hasn't negatively impacted the growth of the network.
● At SDF, the team has accomplished so much in a span of just three years, which is remarkable in and of itself. But what's more remarkable is the work other companies have done by building on top of the Stellar Network. From a company helping refugees safely move their assets to a company providing digital currency-based lending, there are so many stories of consequential use cases of blockchain, particularly the Stellar Network, that inspired the folks at SDF to work even harder.
● Right now, the focus of SDF is to grow the network effects, which involves growing the network usage and adding volume for different use cases. The growth has been monumental, with a 400 percent year-on-year growth in transaction volumes. As more ecosystems emerge over the network, the number of transactions increases. However, it's equally important to ensure that the network can handle that volume, which SDF aims to improve.
● Her advice for those getting into the FinTech and cryptocurrency space is to do your homework. Read up on what others have done, where they went wrong, and what they could have done differently. We've seen many hits and misses in this space, and now it's old enough to produce examples from which future entrepreneurs and creators can learn. More importantly, she suggests focusing on how your business idea can leverage blockchain and provide value to your potential customers.
● She says it's important to be competitive, especially with oneself. She runs daily and uses that time alone to think and strategize. That's one of the things that helps her meditate, as running brings a sense of calm.
Organizer: Georgi Koreli, Stellar Foundation
Editor: Jacky Lin
Contributor: Anna Vladymyrska