Decentralized finance (DeFi) is currently in a phase similar to where the internet was in the 1990s, according to Charles D’Haussy, the CEO of the dYdX foundation. He believes that DeFi has a lot to learn from the growth of the internet and that both DeFi and centralized finance (CeFi) have different roles to play in the market.
D’Haussy predicts that the growth of DeFi will be comparable to the evolution of the internet, where people primarily interact through applications rather than web browsers. He notes that the internet has transformed into “walled gardens” where users navigate through apps, and DeFi needs to adapt to this shift in user behavior.
Drawing parallels between the regulatory challenges faced by the internet in the 1990s and DeFi today, D’Haussy explains that regulators struggled to control the decentralized nature of the internet back then. Similarly, regulators are now focusing on regulating access providers like CeFi platforms rather than targeting DeFi protocols directly.
He points out that as the distribution of DeFi evolves, CeFi platforms could act as a bridge for users who want decentralized options within regulatory boundaries. By integrating CeFi and DeFi, addressing regulatory and technical obstacles, the future of finance could be realized. D’Haussy believes that Hong Kong, a strategic hub for cryptocurrency, could be where this integration takes place.
In conclusion, the collaboration between CeFi and DeFi, overcoming regulatory and technical challenges, could pave the way for the future of finance. As the market continues to develop, it is essential for industry players to navigate these challenges to unlock the full potential of decentralized finance and create a more inclusive financial ecosystem.
