Growth potential of decentralized finance (DeFi) – Wired PR Lifestyle Story

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The topic of decentralized finance (DeFi) has been on the rise lately, for those who aren’t too immersed in the fintech scene, apparently out of the shadows of darkness.
Simply put, DeFi is a system where financial products are available in a decentralized public blockchain network. This means that they are open for anyone to use, rather than going through intermediaries like banks or brokers.
More specifically, DeFik enables a system where software written in blockchains allows buyers, sellers, lenders, and borrowers to interact with each other or interact with a software-based intermediary rather than a company or organization that facilitates a transaction. .
This presents new investment alternatives that can be accessed by almost anyone, flying above the strict rules that traditional financial institutions have worked so hard for.
It also exposes DeFi to the same actors who benefit from it at the same level of risk if they don’t understand it properly, especially how the system is regulated and open.
Should we be careful, or get on the train that these investment opportunities offer? Will DeFi be sustainable in the long run or are they just a dangerous trend?
From a table conversation Wild Digital SEA 2021, we heard from DeFi experts in the SEA region to clarify some intricate details about the DeFi landscape and where it goes.
David Low, CEO, moderated moon SEA and Australia, joined the table:
The financial nature has changed
What was once known as traditional money and investment assets is being decentralized, creating new digital currencies and digital assets which will decide the future economy.
In the last 10 months alone, Sean Lee noted that while DeFi is still in its infancy, some of the unexpected trends in the market are the speed with which innovations are emerging.
“The value of money is changing very quickly,” Sean said. “Investors and asset owners are constantly looking for capital to look at other asset classes, both from a retail and institutional perspective.”
Also, because DeF tends to mimic the financial systems we see in the real world, that’s it it opens up investment opportunities for those in scarce markets as well. This will make financial services more generally accessible and inclusive.
Michael Wu agreed, sharing that he had seen the Amber Group A clear change in attitude towards DeF. It has gone from being rejected by people to taking it with a level of curiosity to understand.
It’s interesting that Michael also noted that people have it clearer demand and better understanding From what they want from DeF. They can range from users interested in end-of-investment returns to more sophisticated ones who want to delve deeper into building a DeFi ecosystem.
But first there are several obstacles to overcome
David asked Ken a question about the major barriers that DeFi believes could be widely accepted with the technologies currently available.
Ken stated it first Today’s DeF UX and UI is heavy and complicated to say, even for native cryptographers. Performing an action requires multiple clicks, and the language used is not the most intuitive for newcomers with little knowledge or experience in the cryptographic space.
“A lot of these things are being built today in terms of innovations coming out of community-led developers and aggregators to help them understand the space and, thankfully, the general user of the space,” Ken said. explain.

To add, general education and investment knowledge is required when trading in the DeFi space. They mainly involve DeFi products that mimic real-world financial systems, such as interest rate swaps, buying and selling stocks, or borrowing money and lending.
But at the same time, many original cryptographic innovations that do not exist in traditional financial systems are being developed. Ken thinks there’s still a big gap, and that’s why many new investors may fully understand the risks of rewarding their investments in DeFi.
There is also a lack of necessary regulations
An anonymous listener asked a question to the panel, and David introduced it to the experts.
The U.S. Secretary of State (US SEC) questioned the very nature of Defi, saying that “lack of transparency and pseudo-structural barriers will keep the market from developing until adequate investor protections are established.”
Sean was the first to present his point of view in response.
“It seems like a lot of fun, because for those of us in the industry, DeF has the highest transparency. You have the most traceability in every transaction, especially when it comes to a public blockchain,” he argued.
“So the idea of transparency is enough interesting from that point of view, because you know how to follow it, because everyone can do the same thing. ‘
Ken repeated what he said about the need for education as a key to helping the public understand DeF, along with the risks associated with it.
And to do that, the public should first understand what cryptography and blockchain do. These elements work together, being a blockchain technology infrastructure and a cryptographic transaction layer.

Sean compared taking DeFi to the internet, where people went from being wary of data privacy 10 years ago to using cloud computing every day today.
Ken affirmed and added, “The technology that DeFi is taking over time is unstoppable.”
Michael has shared that he is seeing more gratifying results, with players becoming more open to DeFi and their crypto attitude. He also stated that regulations are needed to help the space grow later.
With regulations, entrepreneurs will have more clarity in planning their businesses, innovations and products around them.
“When there are regulations, there is one scope for innovation around“If Michael tells us what they are and what they are not, where the limits are, what things they really care about, then I think there is a solution.”
Ken was involved with the Singapore ground experience. He noted that the regulators have been very kind, although they have proactively tried to implement laws that could be applied based on expert opinions from industry players in DeFi.
“I think it’s generally very good to take cryptocurrencies in general, to put our guarantees in place, and to protect investors. I think everything is going in the right direction,” Ken said.
Get a piece of cake
Before the session ended, experts were asked to share their tips on how the average Joe could try to fit into the crypto space, as it was a stepping stone throughout DeFi.
Sean looks at it from 3 groups, where there are developers, partners (infrastructure builders) and crypto owners.
He encouraged new developers to first enter the cryptographic space. It doesn’t matter which protocol is chosen, or where they start, it’s all about getting started.
As for the partners who are actually building the DeFi infrastructure, they need to choose a focus protocol or platform and know how to make it sustainable (both from the standpoint of business sustainability and from the environment).
Finally, Sean advised crypto owners to educate them in an ever-evolving space.
“Don’t think it’s another token or stock you can buy or sell. If you’re an educated trader in the conventional world, you can probably handle cryptography. But if you’re not educated and you follow the trend, the risk will be there,” Sean warned.
Ken added that joining platforms like Abra and Amber Group would also be a good start for those who don’t have much time or knowledge in the cryptographic space, but want to make a profit. With that, Michael joked, of course, that you shouldn’t bet on that house of yours, but only invest what you can afford to lose.
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Participating in cryptography and DeFi generally has similar ideas to playing on the stock market. A high level of understanding and education must be provided within the space, and similar risks apply if you use it irresponsibly.
There’s still a lot of education about DeFi before we see a more widespread and safer reception around the world, but when that happens, we’ll probably see the use of snowballs.
Featured Image Credit: Ken Chia / Sean Lee / Michael Wu
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