Credit Rules Everything Around Me

Credit is the most underloved, underexplored, $100B dollar opportunity in crypto right now. This essay explains why I believe that.

A few months, I was trying to raise capital for a company. It was hard. Obviously - venture capital is supposed to be hard.

But then I was talking to a VC friend of mine who runs his own fund. He was also looking for capital.

Then I grabbed coffee with a buddy of mine who runs a small business in Montreal - he needed capital to do some fixtures in his restaurant. Couldn’t get it.

I kept having the same conversation, the VC, the small business owner, me. I was outside my neighborhood coffee shop when it dawned on me that despite different contexts, and different amounts, we all had a different version of the same problem.

Everybody is just looking for capital.

This sounds obvious when I say it out loud. But I think most people underestimate how fundamental this is. Capital isn’t just money.

It’s the thing that turns ideas into business, dreams into reality. Without access to capital, it’s extremely difficult to get things off the ground and build something economically productive. A talented person with no capital is just a person with an idea.

The mechanism through which most capital in the world flows is credit.

Recently, I started pulling on this thread and I couldn’t stop.

the rabbit hole

I picked up Yuval Noah Harari’s Sapiens once again last year, and there’s a section in there that caught my attention this time and kind of rewired how I think about credit.

Harari’s argument is that credit is the bedrock of capitalism. Not just a feature, the foundation. The reason he gives is almost philosophical: both extending or drawing credit means believing the future will be better than the present.

So every loan is an act of faith. Faith that the borrower will repay. Faith that the harvest will come.

The word credit itself tells the story. It comes from the Latin credere: to believe; to trust.

Faith that tomorrow will be richer than today.

However, for most of human history, that faith was absent.

Our ancestors lived as if the world were zero-sum. Law of the jungle vibes. If you were rich, you must have taken from someone else. Wealth was considered sinful. Even Jesus is said to have stated that "it's easier for a camel to pass through a needle's eye than for a rich man to enter heaven."

If the pie never grows, lending makes no sense. Why give someone your corn today if there won't be more corn tomorrow?

Then something changed.

The scientific revolution forced a revelatory realization that we don't really know much about the world. It delivered a daunting but ultimately freeing admission of our own ignorance as a civilization. We learned that with exploration and experiment, we might grow the pie.

Columbus sailed west seeking gold, backed by a loan from Spanish royalty who believed his venture would return more than they lent.

Five centuries later, Elon is aiming a total occupation of Mars, and venture capitalists like a16z, Sequoia, and Founders Fund have an insatiable appetite to keep funding more of his rockets.

Perhaps Elon is the new Columbus and Andreessen and Thiel our modern day royalty.

I digress.

When people started believing in tomorrow, they started lending to strangers. A baker could borrow to open a bakery. A merchant could finance ships. Entire economies bootstrapped themselves on the simple premise that the future would be richer than the past.

if you ask me, credit created capitalism. Not the other way around.

So I fell in love with this idea. Trust in tomorrow.

then I looked at the actual system

..and my heart broke a little.

When i was 17, my father lost everything in a financial mishap - savings, properties, the business he'd built over two decades. This was right around the time I was awaiting admissions from top universities. I figured the brand of these schools, my scholarships, the future earning potential they implied should be enough for a bank to finance my education loan.

That’s how it works, right? Get an education, build a career, and pull my family out of this nightmare.

Exactly the kind of thing credit was designed for. Trust in the future?

No. My family had become less creditworthy despite my offers. Banks my father had been a customer at for decades said no. Not at a higher rate. Just no.

My grandfather eventually mortgaged his home to secure the loan. I made it. A lot of people in my situation don't.

I used to think this was just my story but it take me long to find out that It's not.

NasDaily - millions of followers, $3M+ in annual revenue, Harvard alum, ex-Venmo software engineer - was denied a business credit card. Think about that. Denied. Because no bank has a model for underwriting people like him.

Well guess what, more and more people look increasingly like him..

Mary Akinyi, a 23-year-old intersex entrepreneur in Mombasa, was turned down for a business loan despite having a solid business plan and credit score. The reason? Her gender identity didn't match her ID card. She ended up borrowing from a loan shark instead.

1.4 Billion adults have zero access to formal banking. The financing gap for small and medium businesses worldwide is over $5 trillion. An entrepreneur in Nairobi pays 20-30% interest for the same kind of loan that costs 5% in New York.

Our courts presume innocent until proven guilty. Our credit system does the opposite. You're risky until proven safe, and the proof has to be on their accepted list of documents.

ticketmaster is a bank

anyway - this wasn’t the end of the rabbit hole.

Actually things got more interesting.

I've been spending a lot of time looking at DeFi companies since it seems to be one of the only things from the Web 3.0 vision which has actual product market fit and a real shot at a serious impact.

There are a lot of cool things going on in the world of derivatives, tokenization, prediction markets, stablecoins, private credit etc.

I met many founders and heard their pitches. But then I met a company called KYD Labs, that reframed how I thought about credit and capital.

The team behind KYD is happily open about sharing their insight so full credit (pun intended) to them. Their unique insight was that Ticketmaster and Live Nation - which most people think of as companies doing ticketing for live events - are much more than just ticketing companies. They're actually debt financing companies.

Ticketmaster has a massive capital base, which they use to finance artists like Taylor Swift, her tours, and even venues like Madison Square Garden. In return, they get exclusive rights to ticket sales. Then they use their ticketing infrastructure (with no real moat or differentiation) to recover their capital + enormous service fees (effectively interest payments).

You can imagine that this was moment it all came together for me. I connected the dots and saw the writing on the wall that the ticketing business is built on top of the lending business. Even here, the capital comes first. The platform comes second.

So Ticketmaster’s (a $15B+ company) real moat isn't their software. It's their balance sheet.

Any DeFi founder will tell you that this is exactly the kind of business that is positioned to get disrupted by crypto and blockchains.

As for me, once I saw this pattern, I started seeing it everywhere. Stripe Capital. Shopify Capital.

Most large platform businesses have a capital stack hiding underneath them. And most of those capital stacks are expensive, operationally complex, and geographically constrained.

What if you could undercut and replace those capital stacks one industry at a time?

DeFi protocols are currently sitting on enormous pools of liquidity - and almost all of the yield opportunities available to that capital is crypto-related. Crypto markets are volatile. The yields are all correlated to each other.

Meanwhile, the real world outside of crypto is full of creditworthy borrowers and income-generating assets that can't access cheap capital because the existing financial infrastructure wasn't built for them.

The Montreal shop owner. The digital creator from Lagos. The fintech lender in India with great repayment data and no access to institutional capital markets.

One side has capital with nowhere good to go. The other side has opportunities with no capital to fuel them. The bridge between them is what I think is easily a $100B opportunity.

why now

People have tried to fix credit before but I think this time is structurally different.

In 1974, Muhammad Yunus - the Nobel Peace Prize winning Bangladeshi economist - made a loan of USD $27 to roughly 40 low income women. This was the birth of what we now call microcredit or microfinance.

Grameen Bank, what the initiative is now called, has gone on to become one of the foremost banking institutions globally, inspiring more than 100 developing countries to adopt the credit model.

Yunus’ insight was powerful, and at the time, quite radical: the poor are creditworthy, just underserved.

Grameen Bank proved it with repayment rates above 90%.

But like all good stories, this story has curdled. As capital markets usually do, they smelled opportunity from miles away. Microfinance companies got distracted from funding income-generating activities to financing unproductive consumer goods, home improvements, and loans to pay off other loans. Today most companies operating in this sector are involved in some form of predatory lending charging 100%+ interest rates from mostly low-income, unaware borrowers.

The second wave - fintech lending - which started roughly post 2010s has attacked the problem with data instead of ideology.

It proved that alternative data - like phone behavior, transaction patterns, digital activity - can dramatically improve underwriting. Companies like Tala that took Yunus’ microfinance idea and gave it tech’s wings and scale have disbursed over $7 billion in credit to 12 million people.

But Tala makes $340 million in revenue and still hasn't turned a profit after 14 years. Why? Well the unit economics of $50-$500 microloans are structurally brutal.

It’s clear that even though fintech has figured out distribution and to some extent underwriting, the capital stack remains the unsolved piece of the puzzle.

First-generation DeFi lending (Aave, Compound) proved that you can undercut the institutional capital model via permissionless, global credit markets on-chain.

But they require overcollateralization - deposit $150 to borrow $100. You have to already have money to borrow money.

I argue that 2026 is the breakout year for solving for this capital stack problem in modern credit.

What's different about right now is that for the first time, all the pieces required to solve it are converging simultaneously:

1. Stablecoins have reached critical mass

   They're not experimental anymore. Real money is flowing through blockchain rails at scale, 24/7, across borders, with settlement in seconds rather than days.

1. Intelligence is approaching a goldilocks zone (cheap and abundant)

   An LLM with the right tool calling can parse a YouTube creator's AdSense dashboard, model subscriber growth, cross-reference content calendars against seasonal ad-rate fluctuations, and produce a credit assessment no human analyst would have the time or contextual knowledge to replicate. It can even read a Shopify seller's inventory turnover or a farmer's satellite crop data. When intelligence was expensive, you needed borrowers to fit your model. When intelligence is cheap, you can build a bespoke model for each borrower, with real-time, continuous monitoring of the loan health.

2. Tokenization and legal frameworks

   USD.ai is one of the most exciting DeFi projects of this cycle. While there’s a lot about it that is interesting (a topic for another blog), what caught my eye was its legal structuring and security perfection for the GPUs it is financing. USD.ai proved that real-world assets can now be represented onchain with genuine legal enforceability offchain - not as an experiment, but as clean structures that institutional capital both in and outside of the US can underwrite.

So for the first time, you can take a real-world asset (RWA) - say, a portfolio of loans to Shopify store owners with tons of data on their business and financial history - tokenize it with real legal standing, fund it from a global DeFi liquidity pool seeking uncorrelated yield, underwrite it with AI that actually understands the borrower, and settle everything on programmable rails that work 24/7 across every border.

My investigation in the creator economy which seems to have a huge appetite for capital (because it is one sector completely underserved by tradfi) shows that the cost of capital arbitrage alone is meaningful to service existing lenders in the space. Lenders currently pay 20%+ for capital because they're too small for Wall Street and too big for venture debt. If you redirect DeFi liquidity to them at 12%, both sides win - the lender gets cheaper capital, the liquidity provider gets better uncorrelated yield.

Structural advantage?

I think the cost-of-capital wedge is just the entry point. Given we’re seeing the early innings of a completely new banking stack being built on blockchain rails - stablecoin cards, vault-based savings accounts, global/instant settlement multi-currency accounts - once you're the capital stack for a fintech lender, you can expand into embedded financial products.

Teams who lean in with a digital-native economy focus or where the end customers don't fit traditional banking templates will have a unique edge.

it all starts from credit

Five thousand years ago, sumerian priests pressed marks into clay to record who owed what to whom.

The world's first trade networks were built because there were credit agreements.

Credit financed columbus and bootstrapped the industrial revolution. Credit is behind the multi-trillion dollar AI capex wars currently ongoing.

It is, if Harari is right, the mechanism through which human civilization and progress compounds.

..and right now it is constrained by legacy banking infrastructure. Crypto and blockchains will do to finance what internet did to communication and news.

I think whoever rebuilds the capital stack - meaning whoever becomes the brdige between global DeFi liquidity and real-world creditworthy borrowers - builds one of the most important financial companies of the next decade.

credit rules everything around me. and i think it's about to rule a lot more.