The crypto industry flocked in Singapore last week for TOKEN2049, one of the major blockchain events in the world. 10,000+ optimistic attendees, wide agenda and an impressive side events list made the sense of the bear market vanish for a week. Here are our takes on the general sentiment and most discussed topics.
CeDeFi: New Kid On the Block
CeDeFi is a convenient synergy between two worlds and comes as a big trend. CeDeFi, or Centralized Decentralized Finance, or even simpler-regulated DeFi, is a relatively new movement. It is the perfect fusion of centralized and on-chain finance, combining the best functionality of both systems. Using CeDeFi, corporations can discover innovative and modern financial products and comply with traditional financial regulatory standards.
It might be a very biased take, as the nealthy team is focused on exploring the synergies between CeFi and on-chain products. But think to yourself: How many partnerships between the Web2 giants and blockchain protocols have we seen for the past year? How many companies self-identify as Web 2.5? How many DeFi unicorns have integrated TradFi payment methods?
Experts believe that CeFi will transform into CeDeFi. The ecosystem between CeFi and DeFi will become more interconnected, and we will see this rising trend in the years to come. The aim is to create easy-to-use products that people don't even realize are blockchain.
"It's great to see the growing interest from traditional finance in DeFi, especially in tokenization and digital assets. I've never seen so many attendees from TradFi at a blockchain conference before. Post Token2049, I can't help but feel excited for what the future holds for nealthy. We're here to build the kind of DeFi infrastructure that institutions need to integrate digital assets confidently." - Austin Lee, Head of Sales at nealthy.
The Call for Democratized Financial Access
Traditional investment and banking rails no longer suit our globally connected, digitally-natured world. Card networks may be fast, but they are costly. Direct bank-to-bank payments can fall short on both counts. Traditional asset management is a privilege for the wealthiest.
The problem is compounded with cross-border operations, where money must pass through multiple dislocated banking systems and intermediaries, adding cost and time with every step. Add to this the territorial segregation which enables only local citizens to use assets issued by local governance or companies or turn to international brokers whose services are costly. Meanwhile, millions of people around the world are locked out of centralized financial systems that define who is worthy of access.
Nothing is more demanded now as democratized access to tools and instruments and the opportunity of an expansion to global markets. Those companies who succeed in providing that will definitely flourish in the next few years.
Sentiment is Bullish
Amidst the conference, the news hit the media that Bitcoin has surpassed Visa by transaction volume. This was another injection of positivity into the overall bullish atmosphere.
It is a testament to the growing influence of decentralized networks. It also raises questions about what the financial landscape could look like in the future. Could blockchain transactions one day become the norm?
The volumes being transferred daily on the major blockchains is evidence of a reliable and trusted medium of exchange in operation. Core crypto infrastructure continues to prove itself.
Total Decentralization Is Tentative
While we are all happy about blockchain being the flagship model of decentralization, the reality is that simple. Look at node hosting of the major blockchains, 50% of Ethereum nodes are hosted with AWS. True decentralization is when even hardware is decentralized. This is the area where new solutions will be developed. Or… Or we’ll find the perfect balance by combining the best of the two worlds without extremes.
Bridge Between TradFi And Digital Money
Once the underdog of the crypto world, stablecoins now account for almost one-fifth of all cryptocurrencies. They share many of the same properties as other cryptos; but with a crucial difference. Those pegged to a fiat currency by holding physical reserves of that currency are more able to maintain a stable value.
Stablecoins were still among the key topics as for the past years they have gained traction as a reliable bridge between traditional and digital finance.
Will this demand for stablecoins persist? We predict that yes, and will even grow further. The risk of volatility is still one of the key factors for more TradFi investors and companies to enter the crypto industry. If we find mechanisms to ensure the peg and hedge against risks in a sustainable manner and protect the space from unbacked and unreliable products promising customers castles in the air, we’ll definitely see a steady dominance of stablecoins (aside from Bitcoin).
Adoption Is Yet To Come
Since the early 2000s, the unceasing talks about crypto adoption repeatedly fill the conference spaces. And Token 2049 is not an exception. Recently, DeFi has been attractive because it presents flexibility in raising capital, access to global markets, and sovereignty over your personal funds.
The borderless nature of crypto is still a magnet for both individuals and institutional investors. So we can expect to see more real-world assets being brought into DeFi in the upcoming year.
However, DeFi still has problems with hacks and exploits and a lack of liquidity. Another great hurdle is the complexity of on-chain operations. So we need to simplify and gain trust. The goal for DeFi is to build a system with a sustainable yield that doesn’t require a Ponzi scheme and creates easy access to the space for anyone.
"There is an indisputable hunger for real world assets on-chain. In addition to that we see that especially institutional and professional investors have a graving desire for risk mitigation and compliant DeFi solutions and products to enter the market quickly, but also worry free. For us it was an additional confirmation that OITs can fill this gap." - Ludwig Schroedl, CEO at nealthy.
Empowering More Users With Benefits of Blockchain
Retail users are not investment experts, and not should they be.
Navigating the crypto investments —understanding and enabling the right technology; creating the perfect customer experiences; maintaining the regulatory know-how; and ensuring the security of your funds—can quickly eat up a lot of resources.
By building new financial rails through CeDeFi we can give users new tools for increasing their wealth as well as an unprecedented level of security and transparency. We’re now capable of in-coding the best strategies discovered by skilled experts and letting an average user benefit from them, with no fear, no hustle, and with full compliance.
It was delightful to hear that both retail users and companies like AMC (Asset Management Companies), family offices, and institutional investors all explore opportunities for algorithmic strategies and benefits of blockchain to minimize risks and maximize profits.
We got the feeling of moving in the right direction and the lingering B2B and B2C demands resonated with our ideas.