The Two Faces of User-Generated Finance
Just like technology enabled user-generated content, new tools are paving the way for user-generated finance. This may sound like DeFi, but it’s actually something much bigger.
Steven Loepfe, GenTwo’s CMO (and my boss), recently picked up on the phrase "User-Generated Finance (UGF)," and it's now a big topic of conversation around the office. Steven and I even talked about it in detail on this week's podcast, where he laid out his vision of how the creator economy is reshaping financial product creation.
As Steven and I also discussed, there’s nothing like language – and in particular, a good coinage – to really breathe life into a new idea.
And so I'd like to pick up on UGF in this post and unpack the narrative a bit. Specifically I want to look at what UGF is and also examine it’ relationship to decentralized finance (DeFi).
On the surface, the two sound synonymous. As we’ll see, this isn’t quite the case.
Want to learn more about the tools GenTwo is building to enable user-generated finance? Visit us here: www.gentwo.com.
What Is User-Generated Finance?
Steven came across the term in a recent piece (on a different subject) by Lex Sokolin (though the term is older). But the idea is simple enough: just like technology allowed people to move from content consumers to content creators, it is also allowing people to move from financial product consumers to financial product creators. This is in fact the essence of GenTwo’s business model and mission.
As Sokolin puts it:
"Movies used to be made by movie studios and distributed by movie theaters. This required large capital outlays and material intermediation to bring the product to the masses. Now, anyone with a TikTok app can become a superstar by shooting videos or using AI."
The same pattern, Sokolin argues, is playing out in finance:
"The manufacturing and issuance of financial products used to require high fixed costs and capital investments, made by carefully licensed people and regulated firms. Each one would be a monumental effort. But since 2017, I would argue, we have entered the era of user-generated finance. Anyone can launch a digital asset with financial characteristics, currently going at the pace of 500,000+ tokens per month."
The parallels are obvious. Just as user-generated content democratized media creation, user-generated finance is democratizing financial product creation. The tools that once required massive institutional resources are becoming available to individuals.
But there is a catch, too:
"That doesn't mean they are all good assets. Not every tweet and TikTok are equivalent to the Godfather trilogy!"
The democratization of tools doesn't automatically create quality outcomes. This becomes particularly important when dealing with money.
Two Tracks, Same Destination
As mentioned, UGF sounds a lot like DeFi. And that is how Sokolin frames the narrative. It also sounds very much like Assetization, which is our narrative. And indeed, they are two sides of the same coin.
Steven did an analysis of the two narratives and came up with this:
Track One: The Crypto Casino This is Sokolin's version - the Ethereum-enabled world where anyone can mint tokens, create stablecoins, or build yield-generating assets. The story is about:
Anyone (not just financial professionals) being able to issue tokens, stablecoins, or yield-generating assets.
A vast on-chain programmable financial ecosystem, with DeFi, restaking, yield strategies, and synthetic products.
Crypto-native capital and ideologies of open-access, disintermediation, and protocol-first governance.
Focused on Web3-native, often unregulated or semi-regulated digital assets.
Track Two: The Compliance Layer This is where GenTwo operates - enabling licensed financial professionals to create structured investment products with institutional-grade infrastructure. This story is about:
Enabling licensed financial professionals to create structured investment products with ease.
Reducing barriers: regulatory complexity, setup costs, operational friction.
B2B2C infrastructure: empowering wealth managers, asset managers, RIAs to act like product issuers.
Focused on real-world, regulated investment products — AMCs, trackers, etc.
Both tracks serve the same macro function: breaking the monopolistic control over financial innovation that has concentrated power in too few hands. The difference is that GenTwo is building the B2B version — like Shopify for financial products. The DeFi crowd is building the open-source TikTok version — anarchic, vibrant, unpredictable.
Both approaches create competitive pressure on traditional gatekeepers, but from different angles. The crypto track threatens to bypass traditional finance entirely. The regulated track threatens to commoditize the infrastructure that gives big banks their competitive advantage.
As Steven puts it, the creator economy is eating finance. And that’s exciting.
Two Faces, One Movement
The story I like is the one where UGF is emerging simultaneously in both the crypto and traditional finance worlds, serving the same fundamental purpose through completely different mechanisms.
The crypto version prioritizes access and experimentation, often at the cost of regulatory compliance and institutional trust. The regulated version prioritizes trust and compliance, sometimes at the cost of innovation speed and broad access.
But both are responses to the same problem: concentrated control over financial innovation has created a system that serves providers better than users. Whether the solution is permissionless protocols or professional-grade platforms, the goal is the same - creating more options for how people can interact with money and markets.
The question isn't which approach will win. It's how they'll evolve together to create a financial system that's both more innovative and more responsive to what people actually need.
All the best,
Tom