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DeFi Is Gradually Replacing Traditional Financial Systems

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The DeFi ecosystems are developing so fast that stakeholders can barely keep up with the rate at which projects are launching today.

The Decentralized Finance (DeFi) space is currently the fastest growing niche in crypto and could go on to disrupt traditional financial systems sooner than expected. With only a few months of active participation, the DeFi market cap has grown to over $12 billion while the Total Value Locked (TVL) stands at $8.3 billion as of press time. This has been one of the fastest growth rates in crypto since Bitcoin made its debut a decade ago. That said, both speculative and fundamental stakeholders are playing a major role in the DeFi craze.

Leave alone the crazy money made by early DeFi entrants, innovations within this space are now proving to be the pivot of future financial systems. Most of the products that are offered by traditional financial service providers have already been integrated into a DeFi project based on smart contract functionalities, hence eliminating the need for third-party financial institutions. Today, anyone can borrow or lend their digital assets in the DeFi market at better rates than they would have gotten locally. In addition to this, the space is now offering advanced financial tools such as derivatives, dividend pools and stock exchanges.

The MBIDEFI: a Glimpse into the Future of Financial Systems

Going by the developments in DeFi, futurists could argue that we have a glimpse of what finance will look like in a few years. Some of the decentralized innovations that are already painting this picture include MBIDEFI, the first DeFi project to leverage a stock-split model for its supply tokenomics. In fact, the MBIDEFI token sale is currently ongoing with prospective buyers placing bids to acquire its ecosystem’s native token ‘DGRC’.

The MBIDEFI platform offers its users a decentralized network where they can interact with financial products such as cross-chain exchange, games, MWallet, dividends pool, stock exchange, and a governance token dubbed ‘MCoin’. These products can be accessed from anywhere in the world, which basically highlights the fundamental aspect of decentralization. Likewise, the DGRC token sale is open to global prospects looking to have a say in the future of financial systems.

These digital tokens will enable holders to seamlessly participate in the MBIDEFI network, ripping the benefits of decentralized financial products. Notably, the total supply has been capped at 6 million with 80% set to be sold in the DGRC pre-sale through the network’s decentralized exchange. Initial buyers will be able to place bids between $0.2-$0.4 while a prediction machine determines the split ratio of DRGC tokens in subsequent sale rounds.

Compatibility with Centralized Finance (CeFi)

Despite core differences in DeFi and CeFi fundamentals, the two spaces are now being integrated in what has been termed as ‘CeDeFi’. This line of innovation is barely two months old but seems to be gaining significant traction; Binance crypto exchange recently launched its own Ethereum compatible smart chain and is in the process of scaling into DeFi staking.

OKEX, the leading crypto derivatives exchange, had also launched its own DEX as early as February. The platform which is based on OKChain is currently in its testnet phase and gives interested users an option to start trading on the OKEX DEX or claim test tokens. OKEX CEO, Jay Hao, specifically highlighted DeFi’s value proposition in financial inclusion and financial freedom:

“We believe decentralized finance is the key to financial inclusion and financial freedom for all. That’s why we have longed for unleashing the power of DeFi … we are now able to provide an open, low-cost, and autonomous ecosystem for everyone to enjoy the benefits blockchain and decentralization brings.”

While CeDeFi presents a value proposition in risk management and diversified staking, most DeFi ‘diehards’ did not sit well with the idea. Some have argued that the whole arrangement eliminates the very fundamental definition of Decentralized Finance, given that prospects still have to go through centralized processes such as KYC. With Ethereum 2.0 on the way, only time can tell whether CeDeFi will continue riding on cost-effectiveness as a cutting edge to onboard more participants into the DeFi market.

Conclusion

The Decentralized Finance (DeFi) market is just getting started and likely to continue with an upward trend in terms of price speculation and funds allocation. Stats in recent months could be used as supporting evidence for these bullish sentiments, although a complete turn-around is also very likely based on the volatility of the industry. Regardless, this can only be comprehensively analyzed once we have experienced an epitome bear market in DeFi.

As for the development of DeFi ecosystems, stakeholders can barely keep up with the rate at which projects are rolling out on the daily. This has, in turn, increased the number of scams launching in the space as well. In fact, unsuspecting DeFi prospects are ripped off almost on the daily in ‘rug pull’ scams. Well, this doesn’t have to be the case when there are some valuable projects, especially in line with futuristic financial ecosystems. DeFi enthusiasts looking to enter or increase foothold in the market will therefore be better placed if they do proper due diligence and keep in mind the risk involved.

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Author: Andrey Sergeenkov

Cryptocurrency investor, journalist, analyst, and growth hacker. I cover crypto, blockchain, crowdfunding, and education.



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Visa, PayPal Join Crypto VC Blockchain Capital’s New $300M Fund

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PayPal confessed that this is its first time to become a Limited Partner in a blockchain or digital asset-focused fund.

PayPal is to partner with Visa in a venture fund meant for Blockchain Capital, whose fifth funding is estimated to be around $300 million. The announcement came in on Tuesday.

The two tech-savvy firms are green to the Cryptocurrency VC. Though each of them has previously invested, directly, in digital asset startups, working together as Limited Partners (LP) is a different ball game. The deal technically means that an external manager will be tasked with placing the equity investment in their stead. PayPal via correspondence, confessed to Coindesk that this is the company’s first deal of such nature, particularly with a VC.

In matters of venture capital, the Company is a renowned figure, actually one of the companies that have been around for quite some time. Blockchain Cap. owns over $1.5 billion, which is under management. Spencer Bogart, a general partner in the company revealed. The general partner also added that the company’s fifth funding got backed by universities and notable pension funds. However, he did not mention names.

From Bogart’s point of view, the two companies are very eager to invest in cryptocurrencies, a niche they have confidence in but need expert help to navigate. Bogart was quoted saying that steering startups to secure agreements with the big boys like Visa and PayPal was very fulfilling.

Jose Fernandez, Paypal’s crypto lead was quoted saying that if they invest in Blockchain Capital’s fund, it will give them an opportunity to learn from the pace setters in the Blockchain and digital assets niche. Blockchain is looking forward to pump $300 million in the venture, whose size can’t be compared to thé big boys like Coinbase and Kraken just yet, Bogart further added. Blockchain Capital began deploying capital over a year ago but a bigger share if its new fund is awaiting.

Purpose of the New Fund Supported by Paypal and Visa

The new funding is meant to support startups in building decentralized finance (DeFi) and non-fungible tokens (NFTs), but all the while, avoiding the digital assets, Bogart claimed. The last time Blockchain Capital’s fund was announced was in 2018 March. The fund was about $150 million.

Blockchain Capital’s fifth fund will definitely have the right outcome, considering that the big boys, PayPal and Visa are involved. Besides, the past funds were successful which is an indicator of what lays ahead. Where such companies, with a global outlook, are involved, you can be sure that proper research was done before the decision was arrived at.

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Patrick is an accounting & economics graduate, a Cryptocurrency enthusiast, and a Blockchain technology fanatic. When not crafting informative pieces on any of the above subjects, he will be researching on how the Blockchain technology can transform the world, particularly the financial space.



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Bitcoin Registers Sharp Dip in Price, BTC Is Below $30K

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The global Bitcoin market suffers a stark decline with a fall to below $30000 after the news that the PBOC ban on crypto went viral.

The cryptocurrency market suffered a major dip as the prices of Bitcoin fell with an approximate price of $30000. The fall in the BTC prices has been registered shortly after the news of China banning crypto made headlines. Earlier, China had issued fresh instructions to the People’s Bank of China to impose a complete restriction on BTC transactions in the country.

China has been persistent with its efforts to completely neutralize the growing crypto operations in the nation and also is practicing strict restrictions to ban Bitcoin and other cryptocurrency variants.

Bitcoin Registers a Serious Dip in Global Finance Market

The BTC prices have fallen yet again in a recent fall where the approximate amount that has fallen is credited at US$ 30000. The fall has been documented as a severe one and has affected the global finance forums. The prices of Bitcoin were on rising as several Latin American nations including El Salvador and Panama embraced the crypto transactions with legal tender, however, the recent crackdown of China’s Crypto move has yet again made the BTC prices suffer a massive blow.

The prices of Bitcoin had a steady rise in February 2021 with an average rate of US$ 64000 till mid-April. The prices have received frequent fluctuations after the first news of China imposing restrictions on crypto transactions in Sichuan went viral. In addition to the recent PBOC guidelines, the vrypto market underwent a significant fall amounting to approximately 35% of the total BTC rate.

Newest BTC Fall Affects the Hash Rate of Cryptocurrency

The Bitcoin prices managed to stay afloat with Latin American nations openly supporting the crypto transactions. The hash rate during March and April remained consistently rising and boosted the overall pricing of cryptocurrency variants.

With People’s Bank of China putting a lid on crypto for reasons such as growing environmental concerns had catapulted the hash rate of the BTC and the fall registered today decimated the hash rate by 5.5%.

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Juhi Mirza is an archaeological major who is obsessive about blockchain/Crypto technology and deems it to be the foundational philosophy of the future. Her dogged ability to research and crystallise technical facts/multiple perspectives into rivetting stories makes her an accessible finance writer. She tends to her archaeological pursuits and loves unearthing the past over the weekends.



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Chinese Bitcoin Mining Company Delivers First Machines to Kazakhstan

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BIT Mining was served with a notice on June 19 which stated that the Chinese power regulator was planning to suspend power supply to its Sichuan firm.

The popular Chinese Bitcoin miner BIT has begun its exodus from China to find a crypto-friendly mining environment. The company has moved operations to Kazakhstan and has already delivered 320 to their new working site after the suspension of Bitcoin mining activities in Sichuan, China. Before the end of June, the publicly-listed firm plans to take another 2,600 mining machinery to their new home, the company announced on Monday.

The Cryptocurrency mining powerhouse revealed that their remaining mining machinery will be translocated overseas. Already, the translocated machinery’s hash rate capacity stands at 18.2 PH/s. Besides Kazakhstan, BIT is keen on taking their operations to Texas. Already, $25 million has been invested in an upcoming facility in Texas.

Sudden Move of Bitcoin Mining Activities to Kazakhstan

Undoubtedly, China is not a fan of cryptocurrencies, particularly Bitcoin and any Bitcoin mining-related activities, and this is largely to blame for this momentous decision. Additionally, BIT Mining was served with a notice on June 19 which stated that the China’s power regulator was planning to suspend power supply to its Sichuan firm.

The Sichuan’s operations contributed about 3% of the company’s revenue. With the harsh regulations on Bitcoin mining in China, most companies have suspended their operations in the Asian powerhouse and are relocating their facilities, to countries whose laws are Bitcoin-friendly.

Miners Exodus

In the past, let’s just say since Bitcoin became popular and Bitcoin mining started trending, China hosted 50% of the world’s Bitcoin miners. However, the country has all over intensified crackdown on Bitcoin operations and Beijing wants all miners out of its jurisdiction ASAP.

The move (banning cryptocurrency operations) is allegedly meant to make way for China’s Central Bank Digital Coin (CBDC), the digital yuan. Most market watchers think that the Chinese authorities ignorantly believe that the yuan won’t thrive as long as Bitcoin is still around. However, that’s not the case according to some pundits, who believe that the two, yuan and Bitcoin, can coexist.

Earlier in the year, March, China’s crackdown on “the digital gold” set off what is now popularly called “the great mining exodus” in cryptocurrency circles. The exodus is currently underway and could be a game-changer for countries whose laws are friendly for Bitcoin mining.

Why Most Miners Have Their Eyes on Texas

Last winter, Texas experienced a day-long massive blackout but still, Bitcoin miners are trooping in. Why is that so? Texas is popular for low energy charges, plus the rate at which the use of renewable energy is growing is amazing, hence, a good place for Bitcoin mining. Texas sourced 20% of its energy from wind, a clean source of energy, in 2019.

The American state has relaxed energy regulations and allows power consumers to opt for their favorite power producers. Bitcoin mining is energy-intensive and is known to have adverse effects on the climate. Additionally, the use of electricity, non-renewable energy, is one thing that repels China’s, however, some people think otherwise.

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Patrick is an accounting & economics graduate, a Cryptocurrency enthusiast, and a Blockchain technology fanatic. When not crafting informative pieces on any of the above subjects, he will be researching on how the Blockchain technology can transform the world, particularly the financial space.



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