The founder of Yield, a financial technology company related to defi, believes that as the financial industry is now taking it seriously and establishing R&D laboratories, decentralized finance (defi) will become a “general term” in the financial industry in 2021.
Experts say that the financial industry is now taking anti-money laundering seriously
In an interview with news.Bitcoin.com, Tim Frost predicted the early development and growth of crypto companies such as QTUM, NEO, Paxful, Polymath, etc. It is expected that in the next 12 months, the locked-in value will be The defense industry exceeds $100 billion. He added:
In 2021, defi will go through some cycles, but clear winners and value propositions will become clear.
Defi platforms like Yield recently raised $3.4 million in funding from BnkToTheFuture, and Alphabit Fund is the initial backer of hybrid financing, attracting the attention of other companies to provide initial funding.
Wirex, one of the founding members of the digital banking platform, said that as with any new financial market innovation, there will always be speculation and inevitable inefficiencies. He believes that these exist more in the context of the peer-to-peer (P2P) nature of cryptocurrencies and defi.
However, he went on to explain why investors are interested in defi:
For some investors, these are risks they don’t want to take. However, it can be considered that the “risk-adjusted rate of return”, the trade-off between risk and expected return, or the risk premium required by investors to invest in defined instruments, will naturally generate financial instruments with other mature returns. Today, we can see this by using sophisticated liquidity mining strategies and re-assuming techniques to obtain excess returns (APY over 1,000%).
In terms of yielding agriculture, Frost said that it has attracted a lot of attention because it “has attracted the attention of many people.” “Although many of the current forms we know are still not sustainable, the basic concepts provide liquidity and do so. The return is very sustainable, and it is also the core foundation of improved seed agriculture.”
Security in the Defi industry
Due to the security breaches that occurred during the year, the Defi industry has been the headline news in 2020. Frost commented on whether this represents the main weakness of today’s resistance, because he pointed out that people are usually “too anxious” on such topics:
In order to safely deploy any financial company, you must conduct a complete technical and business due diligence. Many defi projects have not undergone extensive analysis and review at all before going live. Without proper procedures, the vulnerability is high and funds cannot be deployed safely. The Defi industry must mature and adopt better procedures.
According to a research conducted by crypto exchange Crypto.com, 29,574 users were surveyed, mainly through NFT surveys, of which 74% of respondents admitted to using Defi products.
Do you agree with Tim Frost’s ideas about the defi industry? Let us know in the comments section below.
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