With total value locked down significantly from its high, what does DeFi need to do to regain confidence in the ecosystem?
According to Rachid Ajaja, founder and CEO of AllianceBlock — a decentralized infrastructure platform connecting traditional financial institutions to Web3 applications — DeFi, like all global markets, is going through a cycle right now. And while what happened with Terra, Celsius, Three Arrows Capital and FTX most definitely shook investor confidence, the problem lies with the players operating within the market and not the technology itself.
Similarly, Varun Kumar, founder and CEO of the decentralized exchange Hashflow, told Cointelegraph that, at present, this niche industry needs stronger products that are capable of solving real-world problems. “The DeFi ecosystem is still in an exploration phase, with lots of projects still identifying their respective market fits,” he said.
Juana Attieh, co-founder and chief product officer for Fluus, an aggregator of fiat-to-crypto gateways with a crypto ramping network, told Cointelegraph that DeFi’s decline and loss of trust have been due to centralized entities abusing their power and exploiting their consumers time and again.
“Despite the drop, the fact that $50 billion in liquidity is still currently deployed to DeFi protocols is exciting and unprecedented in the world of finance, where we would typically need to rely on institutional market makers and lenders as the catalyst to get the economy moving again.” However, in his view, most quality DeFi projects today are firmly rooted in the ethos of transparency, with a growing list of these offerings now undergoing smart contract audits and publishing proof-of-reserve reports to help restore confidence in this space.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
7 DeFi protocol hacks in Feb sees $21 million in funds pilfered: DefiLlamaDeFi project aggregator DefiLlama has revealed data showing that DeFi platforms were hit with seven noteworthy attacks throughout February, resulting in over $21 million in losses.
Read more »
Crypto funding seen shifting from CeFi to DeFi after major collapses: CoinGeckoDigital asset investors poured more into DeFi projects than ever before in 2022, with funding rocketing 190% to $2.7 billion compared to 2021. CeFi however, went the other way.
Read more »
How are crypto launchpads revolutionizing the DeFi industry?The Web3 capital ecosystem has its own version of accelerator programs in crypto launchpads. But are these beneficial models?
Read more »
7 DeFi protocol hacks in Feb see $21 million in funds stolen: DefiLlamaReentrancy, price oracle attacks, and exploits across seven protocols caused the decentralized finance space to bleed at least $21 million in crypto in February. How do DeFi platforms improve security?
Read more »
Week in DeFi: Tornado Cash Back to Life, ZkEVMs Heat Up and a Polygon Identity | CoinMarketCap🔹Tornado Cash is back, now as PrivacyPools on Optimism. 🔹Polygon releases tools for a Web3 identity utilizing ZK technology. It has been a week of huge announcements and launches! Let’s see what went down this past week in DeFi. 🔥
Read more »
Frax’s shift to a fully backed stablecoin signals the end of DeFi’s algorithmic experimentThe decentralized stablecoin sector struggles to gain market share due to regulatory risks and a lack of trust among users, but data shows there is hope.
Read more »