DeFi

Building Investor Confidence in DeFi: What Can Protocols Do?

Published

7 months ago

19 June, 2024

Building Investor Confidence in DeFi: What Can Protocols Do?

The meteoric pace with which the decentralized finance (DeFi) sector has made breakthroughs has raised alarms among regulators around the world. Caught off guard by the meteoric rise of the DeFi industry, regulators are now scrambling to put new regulatory frameworks in place, unsure to what extent they will be able to exercise control over it.

With the crypto market recently hitting new highs this year, in line with the optimism sparked by the first Bitcoin ETF and the last halving, the regulatory conversation has taken on even more importance. However, given the complexities associated with the DeFi industry, a global regulatory framework is not being considered anytime soon. Therefore, in such a volatile atmosphere, the DeFi sector must come up with self-regulation and out-of-the-box thinking to ensure that investor confidence remains intact in the sector.

Why does DeFi regulation seem complex?

DeFi regulation is a complex topic due to the unique nature of decentralized protocols, which no single entity controls. For more than a hundred years, financial regulation has evolved based on the concept of a trusted intermediary having total authority over each actor in its financial ecosystem.

This centralized entity can be held accountable, providing consumers and businesses with legal recourse if they feel cheated. DeFi replaces these intermediaries with programmable, autonomous smart contracts that are not beholden to anyone. Such a decentralized model presents a unique set of challenges for regulators accustomed to making changes in centralized systems.

Empowering DeFi

Having already mentioned the problem of regulating the DeFi industry, it is also necessary to introduce accountability into this sector. Without any regulations to govern it, the best DeFi protocols can do is rely on existing rules and processes from the traditional financial industry that can help them avoid taking unnecessary risks.

For example, lending protocols could use existing best practices from traditional finance to identify the most suitable borrowers. They can also borrow from existing structures that help streamline the lending process and improve the efficiency of their operations.

How can DeFi protocols use data from traditional markets?

The world’s largest economy, the United States has built an extensive structure and model for securing loans and attracting capital. Credit rating agencies such as S&P Global Ratings, Moody’s and Fitch Group have detailed data that can be used to establish rules regarding who is and is not eligible for borrowing. This data can enable DeFi protocols to make better risk management decisions.

Additionally, the United States has a strong legal system that can be leveraged creatively by DeFi companies, to ensure that their users always have avenues for legal recourse.

Zivoe: an original approach to empowerment

A company that tries to be creative to reassure its users is Zivoéa real-world asset protocol that offers an alternative source of credit to consumers tired of the predatory lending practices of the traditional lending market.

Zivoe is able to provide a more affordable alternative source of credit by providing on-chain loans to consumer lending companies, who can, in turn, offer their customers fiat loans at attractive rates. To manage risk, Zivoe secures the loans it makes to lenders by creating a “special purpose vehicle” or SPV, retaining authority over that entity in case the original lender fails to perform.

This is a new structure that reduces credit risk while optimizing the use of capital. Under this model, Zivoe SPVs can allocate unlent funds to other DeFi protocols to create an additional revenue stream. This means that the capital under Zivoe’s control never sits idle, but rather works to improve the overall health of the protocol.

Zivoe’s initial lending partner is a self-created company called Zinclusivewhich is largely run by the same management team.

Every loan Zivoe makes to Zinclusive is collateralized, and the consumer-focused products created by the latter will be placed in an SPV, which serves as a form of actual collateral. The SPV notably has no interaction with blockchain-derived capital provided by Zivoe’s liquidity providers, but its legal agreements with Zinclusive mean that these on-chain activities are connected to its off-chain assets. These agreements provide in particular that in the event of default by Zinclusive, Zivoe has the power to take control of the SPV concerned and the consumer loan portfolio under its management.

Zivoe’s unique model was conceptualized by a founding team led by the CEO Jay Abbasi and general counsel Kristal Gruevski. Meanwhile, Zivoe’s risk advisor Walt Ramsey he previously helped develop risk management strategies for Lloyd’s Bank, JP Morgan Chase and other financial companies.

Conclusion: DeFi must earn investor trust

Just like traditional finance, there is no guarantee that investors’ DeFi deposits will generate a profitable return. However, an established regulatory framework in the Trad Fi sector has at least ensured that investors have an authority figure they can go to with complaints.

This is where the DeFi industry is lagging behind and it is up to new companies showing creativity to gain the trust of investors. Zivoe is an example of creative thinking where investors are convinced that the dynamic and pioneering new form of financing is trustworthy.

Fuente

DeFi

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Published

6 months ago

29 July, 2024

CoinFlix Staff

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Bonk and Pepe appear set to net new investors 10x to 100x returns over the next 12 months. However, cryptocurrencies in the DeFi play-to-earn gaming sector could offer even greater returns. As August approaches, Rollblock is emerging as a standout DeFi play-to-earn gem with the potential to 100x-1000x gains in the fourth quarter and beyond.

The project features an innovative revenue sharing model and exceptional accessibility, attracting players and investors. Additionally, Rollblock’s extensive game library of over 150 titles and enhanced sports betting are further driving excitement for the platform. Cryptocurrency analysts are expecting a sudden surge in demand. 800% a push for Rollblock from the beginning of September.

Bonk remains strong despite market fluctuations

While most well-known cryptocurrencies struggled throughout July, Bonk remained strong. As one of the highest-grossing meme cryptocurrencies of 2024, Bonk rose over 24% in July, while most cryptocurrencies experienced negative fluctuations.

Investors looking to add a relatively safe memecoin to their portfolio should consider Bonk. While Bonk is unlikely to generate explosive gains of 250x to 1,000x from here on out, Bonk could still theoretically provide returns in the 20x to 100x range.

Pepe should see a big rise in the next bull run

Alongside Bonk, Pepe has yet to go through a bull run. This means that there are still substantial gains to be made from Pepe over the next 12 months.

Pepe is down 4% in 30 days, but that shouldn’t worry Pepe investors in 2024. Experts believe Pepe’s best days are still ahead, with crypto analysts predicting a 10x to 50x surge in the next election cycle around November.

In the long term, Pepe could surpass the 100x mark for today’s investors. However, Pepe is a memecoin, and one should exercise caution when investing in purely speculative assets that have no utility.

Rollblock’s Unprecedented Hype Potential Could Push It Past 100x Valuation in Q4

Rollblock is a GambleFi Play-to-Earn token that integrates centralized and decentralized gambling on a single platform. By allowing players to earn rewards through active participation and gameplay, the platform creates a compelling incentive structure that appeals to both casual and competitive players.

With its cutting-edge blockchain technology, Rollblock offers top-notch security that keeps bets and transactions on the platform secure. The platform’s lack of KYC mandates appeals to both users who value anonymity and security.

Rollblock’s revenue sharing model, which allocates up to 30% of casino revenue to RBLK token holders, is a major draw for investors. The model involves burning half of the repurchased tokens and distributing the other half to stakers, increasing the token’s value and encouraging long-term investment.

The platform is also constantly evolving thanks to user feedback which has enabled updates such as the upcoming sports betting feature within the platform’s casino. This addition will complement Rollblock’s extensive game library of over 150 titles, ranging from traditional poker to innovative blockchain-based games.

RBLK is expected to emerge as one of the leading DeFi tokens in 2024. With a price of $0.0172 with impressive growth potential and over 140 million tokens sold recently, Rollblock is on track to enter the top 100 cryptocurrencies by Q4, making today a lucrative time to buy RBLK tokens.

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Fuente

DeFi

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Published

6 months ago

29 July, 2024

CoinFlix Staff

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Veteran cryptocurrency investor Arthur Cheong believes the digital asset sector offers long-term holders a golden opportunity.

Cheong, the founder of DeFiance Capital, tell His 171,700 followers on social media platform X indicate that he believes decentralized finance (DeFi) is hugely undervalued.

According to Cheong, DeFi projects are innovating at a rapid pace and leaving traditional financial (TradFi) companies in the dust.

“It’s been a long time since I’ve been this excited about the risk/reward and potential upside of DeFi. This is probably the most misjudged moment since the pre-DeFi summer of 2020, with extremely promising prospects.

I see opportunities not only in OG (original) DeFi, but also in some newer projects that are evolving rapidly and growing at a pace that fintech startups will do anything to match.

The veteran investor also believes that crypto is now here to stay following recent launch from the Ethereum spot market (ETH) exchange-traded funds (ETFs) last week.

“Overall, the floodgates are open and there is no turning back. TradFi asset managers will continue to launch new crypto products because, guess what: there is huge demand for them!”

I expect them to launch actively managed crypto ETFs [in the] coming years. ”

Earlier this month, Cheong laid that it might be a bad strategy for cryptocurrencies to seek mass adoption, believing that digital assets are designed to disrupt several key financial sectors.

“I think we should accept that cryptocurrencies may not be suited for mass adoption like Web2, but rather are optimized for some narrow but very high-impact use cases like stateless global money, cross-border payments, and decentralized finance.

Chasing mass adoption of normies may be chasing the wrong Grail from the start.

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