Big financial institutions ready for DeFi

Big financial institutions ready for DeFi
With the announcement of Aave Pro, the DeFi platform exclusively for institutional investors, the ‘big boys’ can finally get ready to ‘play’ with blockchain.

Traditional investors are more used to concepts such as stocks and real estate, focusing on aspects such as revenue, monthly user activity and cash flow, making DeFi (decentralised finance – community-created crypto banks) a very good entry point into the blockchain world for them. 

Over the past year, DeFi projects have popped up all over the world, attracting billions of dollars to the niche industry.

Fidelity Digital Assets recently reported that 80% of institutions surveyed are interested in digital assets, with 36% saying they have already invested in the asset class. 

Furthermore, according to Evertas, a cryptocurrency insurance company, 90% of institutional investors in the US and UK plan to increase their cryptocurrency holdings soon.

Nick Ovchinnik, director of business development at 1inch Network, told Cointelegraph: “The influx of institutional funds will have a long-term positive impact on the market.” He said the presence of reputable players should increase market stability for retail investors and the long-awaited adoption of this new asset class, stating:

“These investors tend to be risk-averse and have a long-term investment horizon. Therefore, the most efficient assets in the market are those that will benefit most from their dominant position.”

Recently, the Aave DeFi protocol announced a new platform exclusively for institutional investors. There may be billions in DeFi, but it’s a modest sum compared to the trillions of dollars spent every day in the traditional financial system. As the technology available to investors scales to the size of the industry’s growth potential, all eyes are on DeFi and how institutions will shape it.

If large corporations, and with them massive capital, make permanent inroads into DeFi, the entire cryptocurrency market will become more predictable, profitable and friendly to the individual investor. 

01-11-2021, Mr Advice TEAM


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