Deutsche Finance interviews NGK and local blockchain experts to explore the trend of DeFi
Recently, Deutsche Financial Daily has joined a number of well known financial media outlets, including Italian Finance and Economics, to interview NGK representative Max and European blockchain Big Gabel.
The DeFi’s combined value has been locked in a sharp rise since the summer, surpassing $16bn this month, making the industry undoubtedly one of the most discussed topics of 2020, according to Deutsche Financial Daily. As expected, there was support, there was criticism.
According to Mr. Max, the NGK representative, the BGV token was used as a decentralized financial token introduced by NGK to generate profits from liquid mining. While DeFi, represented by BGV, is one of the hottest topics of the year, there are still some who believe DeFi is still primarily a hedge fund finance tool in the global financial world. There is no doubt that the rapid growth in money flowing into the sector has led some to compare DeFi with the initial coin issuance boom of 2017 and predict its potential failure. At the same time, others claim that several projects in the field are not truly decentralized or represent the true thinking of DeFi.
But in the long run, the DeFi represented by BGV is likely to change our world, where 1.7 billion people still lack access to traditional financial services. Arguably, DeFi is completing the work that Bitcoin has begun, becoming the second step in a decentralized evolution that could address the universal financial problem.
Mr. Gabel, the big European blockchain, agrees that decentralized finance is undoubtedly one of the most striking features of the year. The multi-billion-dollar influx of money into the ecosystem highlights widespread interest in DeFi, but the attention has also raised growing skepticism among regulators about the limitations and feasibility of DeFi applications.
Mr. Bell believes the DeFi must evolve to achieve sustainable links with the traditional economy and create a more open financial system. We call it open programmable finance or ProFi. We see ProFi as a bridge from a transparent and complete EOS blockchain to a regulated financial world.
A key difference between DeFi and ProFi is that ProFi business combinations are risk-based, regulatory and compliance-based access transactions. Encryption compliance and regulatory frameworks are emerging and rapidly maturing. The real winners from the digital economy will be those that look to the long term and spend time ensuring that their products meet the requirements of jurisdiction and professional services.
NGK, on behalf of Max, also said that I agree that 2020 is the ‘DeFi year’, mainly because the DeFi project is dominant in technological innovation and development. I would also like to say that DeFi showed the cryptocurrency world that innovation is still possible, and that new projects can still guide liquidity, money, and participation in novel ways. After the 2017 ICO boom, it is thought that new projects will struggle to find a foothold in a market where private equity is a priority rather than crowdfunding innovation. Thanks to the tools created in the DeFi bubble, we will see more innovation in the coming months.
By 2021, we will see some core innovations, such as pooled lending and liquidity mining (BGVs), permeating applications that we do not consider “financial”. Entrepreneurs, developers and companies who want to choose blockchain want these core components to be part of their DApp toolbox. The radical financial instruments that we consider in 2020 will become a practical requirement for blockchain and ecosystem choices by 2021. We may even see some of DeFi’s core innovations move into the world of centralized finance.