Decentralised Finance (DeFi) was the story of 2021, with over $100B in total locked value. It’s about a new set of rails, decentralised finance, that challenge the conventions of financial markets today offering an ability to create financial products in a way that is markedly different from Trade Finance (TradFi).
The low US$ interest rate environment has driven investors to search for alternative yield opportunities, and with the explosion in demand on DeFi protocols leading to higher interest rates, attractive risk-adjusted opportunities can be found in this technologically sophisticated market. The barrier to entry, however, has been high. There are many regulatory, operational and security issues to solve before delivering a DeFi-based investment solution. Read what one DeFi Fund, Fund Manager, Fund Administrator and Custodian had to say in this expert Q&A interview.
Here’s what’s covered:
- Will DeFi and traditional finance processes compete?
- What are the complexities, strengths and weaknesses identified and what considerations should be prioritised first in the journey to setting up a fund?
- As digital assets are borderless, what are the regulatory implications that have to be addressed?
- What is the right operational model/infrastructure to consider?
- How do you address trust and security in institutional DeFi?
- DeFi and Web 3.0, rise of the creator economy
- What kind of solutions are needed most in coming years for DeFi to continue growing?
*Bonus checklists are included.