2020-9-11 09:29 |
Decentralized Finance growth has been explosive. In the last year, the value locked into DeFi has increased 1500% to $8bn, according to DeFi Pulse. As analysts question how disruptive it will be to traditional finance, Crypto.com and Boston Consulting Group , have today, released a joint research report weighing the implications DeFi will have on centralised finance.
“The Sudden Rise of DeFi: Opportunities and Risks for Financial Services” explores the factors driving the growth of the DeFi industry, which is an Open Finance movement built upon public programmable blockchains such as Ethereum. DeFi’s proponents expect a disruption of mainstream financial services by allowing all aspects of financial services to be automated and performed by anyone, without a central authority or intermediary. The report tempers the anticipated potential of DeFi with an honest assessment of current challenges facing the industry and the underlying technology.
Regulation and governance have given the centralised finance (CeFi) industry an enormous proportion of the value generated from financial services. While DeFi may be perceived as a threat to CeFi, Crypto.com and BCG’s report offers a roadmap for financial services leaders to build a new generation of politically and technologically resilient financial solutions that are extremely valuable and more relevant in today’s digital economy.
Kris Marszalek, Co-founder and CEO of Crypto.com said: “Our joint research into DeFi provides a deep dive into the reasons behind its growth, differentiators against CeFi and its potential to disrupt mainstream finance. Whereas much existing research into DeFi is project-specific and crypto-centric, this report leverages both Crypto.com and BCG’s respective areas of expertise to deliver a comprehensive side-by-side comparison with incumbents in traditional finance.”
Kaj Burchardi, Managing Director with BCG Platinion said: “Whether companies choose to embrace decentralised finance or not, they still need to understand the impact it will have and track customer demand for autonomy, especially in payments, loans and exchange. By uncovering current levels of liquidity, charting the progress of regulation, and judging levels of risk – companies can continually assess whether services should be substituted for a more decentralised model. By partnering with Crypto.com, we have been able to advise companies with an honest appraisal on DeFi, giving them the tools to make informed decisions on its adoption.”
SOURCE Crypto.com
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