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Institutional Investors Are FINALLY Giving DeFi The Attention It Deserves

by Alyze Sam, #WomenInBlockchainNovember 8th, 2020

Too Long; Didn't Read

Bitcoin is the current de facto reserve because it has brand recognition, but it is not a full-fledged ecosystem for decentralized finance (DeFi) DeFi applications, like exchanges or lending services, can be built with Etherum. Constellation Network, a Distributed Ledger Technology built to securely validate and protect data, has had several impressive backers jump on board this month alone. Uniswap, a DEX running on Etherum, recently saw its monthly trading volume overtake Coinbase's.

Companies Mentioned

Coins Mentioned

featured image - Institutional Investors Are FINALLY Giving DeFi The Attention It Deserves

Excitably, I FINALLY get to announce that institutions are pouring nearly 58 million dollars a week into Bitcoin! Oh, and Jr over there, Ethereum is seeing nearly $10M/USD in trades, weekly.

With many headlines sharing news that seems to scream "CRYPTO MASS ADOPTION COMING", many global financial experts and technologists can agree, this "DeFi" trend is only likely to accelerate.

If you're a fan of Robert Kiyosaki's work, (Cash Flow Game/ Rich Dad, Poor Dad) you've heard Bitcoin has been likened to gold and, however objectionable it may be to gold bugs, the analogy is good enough. Bitcoin is used primarily as a store of value, a hedge against forecasted fiat fluctuations. Bitcoin exists, but it is not especially extensible.

Photo Source.

Bitcoin is the current de facto reserve because it has brand recognition, but it is not a full-fledged ecosystem for decentralized finance (DeFi), or even, like Ethereum, a platform to develop DeFi solutions. DeFi applications, like exchanges or lending services, can be built with Ethereum. (Which has been one of my favorite projects since 2015)

Sadly, issues with speed, transactions fees and scalability persist. I was trained in blockchain technology with guides personally sent by Dmitry Buterin, so I felt somewhat guilty when I found Constellation Network, a Distributed Ledger Technology built to securely validate and protect data, including complex data. (Oh, baby. You guys know I love privacy!)

Photo Source. Me, checking out Constellation Network. It feels so bad because I'm so loyal, but it Constellation looks so good.

Partly because it is rooted in Constellation's robust infrastructure, Lattice, the decentralized exchange (DEX), has had several impressive backers jump on board this revolutionary project this month alone. In interviews and press releases they announced:

GDA (Global Digital Assets),
Hillrise Capital,
Moonrock Capital
Alphabit Fund
FBG Capital

The Lattice Exchange is funded by the top three funding groups in blockchain technology, this is part of a larger trend, an exploding fascination with DeFi solutions- including imperfect ones. Uniswap, a DEX running on Ethereum, recently saw its monthly trading volume overtake Coinbase's.

"As of today, the DeFi market is worth $6.68 billion, which, in just 2020, means that the market has grown with around 982%. What is even more impressive is the fact that the staggering growth has been exponential." Source. @IvanOnTech

Checking out the White Paper, Constellation’s technical foundation gives Lattice an undeniable edge over its competitors including, but not limited to very attractive things those of us Crypto OG's have been waiting for:

zero fees,
lightning fast transactions,
deep liquidity pools,
numerous automated market maker algorithms,
scalability.

In other words, what is built on Constellation Network can grow without becoming slow or costly. The 2017 CryptoKitties debacle, where traders were spending thousands of dollars to execute a single transaction, is a sobering reminder of what happens when a fragile system encounters a black swan event.

Photo Source. RIP CryptoKitties :(

I mean, honestly, it's time to get serious, friends. The options offered by DeFi encompass and surpass everything offered by traditional finance. Smart contracts, a feature introduced by Ethereum, have not been fully realized. Yet the promise of this feature, more a proof of concept or a functioning prototype than a commercial grade product, has been enough to attract nearly 50 billion dollars in investment (and tens of billions more in the various tokens running on Ethereum’s blockchain).

Right now the entire crypto market is between 380 and 560 billion USD. All the stock exchanges in the world add up to about 70 trillion. The daily volume of the global currency market is 5.1 trillion. Crypto in general, and DeFi in particular, have immense potential. While Bitcoin and Litecoin may continue to be reliable stores of value, more dynamic and perhaps profitable opportunities are on the horizon for the next generation of DeFi.

Co-Authored with Adam Alonzi

Adam is a writer, biotechnologist, documentary maker, futurist, inventor, programmer, and author of two novels. He is a Marketing Director for Lattice Exchange, Head of New Media for BioViva Sciences, interdisciplinary analyst for EthicsNet, a reviewer for the Millennium Project.

Co-Authored by Alyze Sam

Alyze Sam is a refreshing blockchain strategist, a novel educator, and a vehemently driven advocate. First, dedicating her life to her patients in hospice nursing, Sam passionately embraced the world of financial technology after nearly losing her own life in 2014. Sam feels her destiny lies within serving her community and assisting other ‘underdogs’. She is actively achieving inspiring others as a Co-Founder at GIVE Nation, a children’s financial literacy AI/blockchain project that rewards kiddos for altruism. She's authored the first and only books published on Stablecoins with co-Author Adam Alonzi. We appreciate your love and support as we try to bring unbiased education to the STEM space.