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The Institutional Adaptation of DeFi

10 Feb 2022 | Cryptocurrency news

The world as we know it is constantly changing and this is all thanks to the newfound love that people have begun expressing towards the crypto industry. Believe it or not but just a couple of years ago, it was considered to be taboo to even discuss the idea of investing into the crypto market. 

Nowadays however, things have changed as more and more companies have begun employing the use of crypto coins and specifically integrating the crypto ecosystem into their workplace. 

In today’s article we will be discussing what is in store for the future of the crypto market and specifically how DeFi influenced it all and brought it to the next level. 

 

 

An Introduction to DeFi 

Decentralised finance, or DeFi for short, is a relatively new financial technology which is based on secure distributed ledgers. The reason as to why this is important to know is because these secure ledgers are very similar to those used by many cryptocurrencies out there. 

Another important thing to factor in is the fact that DeFi is essentially an alternative to banks and other such financial companies that tend to add in a ton of different fees to their transactions to run you dry of all of your hard-earned money. 

So, instead of applying to keep your money in their accounts you instead employ the use of DeFi and you keep all of your savings in a secure digital wallet which potentially erases the need for banks in the first place. 

The crypto market is in its entirety meant to be a secure alternative for traditional transactions which is why DeFi is such a massive step towards the future that the crypto industry is promising. With that said however, what can we expect from the near future if DeFi continues to revolutionise the game? 

 

 

Examples of DeFi Changing the World 

We mentioned previously how more and more financial institutions and big-name companies have started to realise the threat that the crypto scene represents and they acted accordingly. 

They had a choice, either fight the system similarly to how companies treated gold way back during the gold craze where they completely banned it altogether, or add it to their arsenal in order to not be left in its dust. 

As of 2020 for example, almost $15 billion of institutional assets owned by these corporations have been allocated straight into the crypto market, which is a good indication as to what choice they made. Just to reiterate how important of a change this is, we’re talking about a 5x increase in one year alone as back in 2019 there was only $2 billion trusted into crypto in this case. 

On top of all of that, Grayscale Bitcoin Trust also spotted the fact that crypto assets owned by these companies increased by a whopping 900% in 2020. 

And it doesn’t stop there, in 2020, MassMutual, a top-level brand name with over 169 years in the industry decided to invest a total of $100 million in Bitcoin as things were getting better and better for crypto. 

PayPal and other such industry titans have also allowed crypto transactions on their platforms and as these big-name companies are advancing forwards, so are many other smaller companies as well. 

Last but not least we would like to mention how DeFi is actually used more than ever before as well, thanks to the security provided by the smart contracts. Things are getting better and better and DeFi has made sure of the fact that the crypto market is here to stay. 

 

 

Companies and Crypto 

There are two main reasons as to why so many large names have started to invest in the DeFi system and they are the following: 

  • Security 
  • Necessity 

First off, we mentioned how DeFi makes every transaction safer as you no longer have to rely on the bank to get your money, you can put your money in the safe hands of the virtual wallet and never have to spend any money to keep it going either. 

This has brought in a surge of a ton of different investors as more and more millionaires have decided to change up the game and adapt to this newfound technology. 

Second off, they had to make this change because otherwise they would have been left behind by now. As time moves on, more companies have started to adapt to the DeFi system, and if these companies refuse to follow through with these changes, they would lose a lot of potential clients. 

So, as a result, they had to adapt and use the DeFi system and crypto coins altogether. We have even seen companies paying their workers in crypto, so it’s no wonder that the world as we know it is steadily changing from a traditional financial standpoint to a virtual crypto-powered system.

 

 

What the Future Holds for Crypto 

Things are definitely looking up for the crypto market and specifically for decentralised finance since over the last 2 years we have spotted a 315% increase in the search growth for the term “Decentralised exchanged”. 

The fact of the matter is that without DeFi, the crypto scene wouldn’t be the same today, those smart contracts fixed a lot of the issues that the crypto industry had on its shoulders and because of it we can safely say that investing into the crypto industry has never looked more profitable.

 

 

Business solutions by Guardarian

To close this out we would like to mention the fact that we here at Guardarian offer an excellent service for businesses looking to exchange crypto.

B2B exchange services have become a widely accepted option for companies transacting with crypto as well, which is why it’s always safe to look into our legal and secure crypto-2-fiat gateway for your business.

Guardarian offers the best rates, flexible conditions and secure operations for our business partners. 3 simple steps to start with us – fill a form with your company information, pass a short compliance process and your business is ready to start with the exchanges! 

For all business inquiries be sure to contact us through [email protected] and let us find the perfect solution for your business.

But for now, we would like to thank you for reading and we hope that you learned something new about the crypto industry from our short article. We wish you luck with your investments and we can’t wait to see what the future has in store for all of us.