Decentralized funding has been rapidly gaining traction, largely due to the fact that the sector has a total set value of over $ 11 billion. While it makes sense that DeFi – an area characterized by terms like “yield farming” and “meme token” – has caught most of the cryptocurrency sector’s attention, the concept is also catching on in the corporate world.
Stefan Schmidt, Chief Technology Officer of Unibright – a blockchain development company – told Cointelegraph that DeFi concepts can be applied in the corporate sector, where financial assets can be represented by programmable tokens: “In general, the definition of DeFi is always not yet clear outside the corporate sector. “However, according to him, DeFi is” anything that has to do with finance that can be called a token “.
2021 will be the year of DeFi?
Although Enterprise DeFi is still in development, Schmidt mentioned that this will become more important very soon as these concepts will be implemented in Enterprise IT Tech Stacks in 2021.
In the meantime, the first step in enabling DeFi for business is to facilitate agreements between organizations that share data. In particular, these agreements indicate that all invoices and other financial transactions are valid and should be processed for payment. “If you don’t have a trustworthy agreement between all parties stating that invoices are valid and should be paid, you can’t move forward in the DeFi area,” said Schmidt.
To enable a possible use case, the blockchain development company Provide has entered into a partnership with Unibright in a joint venture. As of October 20, Unibright will be operated entirely under Provide as both companies want to unify the technology companies need to securely synchronize data.
The two companies have been working closely together for a year to help companies implement the Baseline Protocol, an open source initiative by OASIS that normally uses the Ethereum mainnet as a kind of middleware for organizations that exchange data to serve as a single source of truth. Coke One North America was the first publicly announced use case that demonstrated how the baseline protocol enables the bottling giant to flag invoices across its supply chain.
Kyle Thomas, CEO of Provide, told Cointelegraph that the Baseline Protocol is indeed the linchpin that will facilitate the age of corporate data sharing to enable DeFi for businesses. “The ability to seamlessly coordinate business processes such as purchasing and supply chain movements between trading partners is fundamentally changing global business,” he noted.
Integration of DeFi concepts into the company
Thomas also noted that a joint venture between Unibright and Provide is trying to create a consistent baseline service offering. This includes consulting firms interested in incorporating the basic protocol into their existing corporate resource planning systems. “Once this implementation is understood, corporate ecosystems cannot be set up centrally, with each participant running their own compatible IT tech stack,” he said.
By introducing the Unibright framework, Provide can expand its UBT (Unibright Token) model for the upcoming launch of Provide Payments. According to Schmidt, Provide Payments will use UBT tokens to provide liquidity for its managed transaction service. This service initially supports the payment of gas fees for any transaction sent to a public blockchain network such as Ethereum. Customers are then billed based on the volume of transactions.
Provide Payments will seek to enable traditional corporate sourcing of public blockchain services without customers ever having to buy or hold cryptocurrency. “All of Unibright’s DeFi offerings are tailored to business needs,” said Marten Jung, Unibright CEO. “This combined offer paves the way for blockchain-based corporate data exchange.”
Tokenized standards will follow soon
In order for a baseline-as-a-service offer to take effect, token standards for orders or invoices still have to be developed. Paul Brody, global blockchain innovation leader at Ernst & Young, told Cointelegraph that at some point there will be a trend where business users will follow the consumer path and add, “They will start coordinating business agreements but then add payments to Da.” As the data protection tools of the Baseline Protocol become more widespread, we will likely see the adoption of DeFi by companies. “
Brody went on to mention that early enterprise DeFi use cases are represented by companies selling financial assets, such as receivables, to third parties in bid models. However, he noted that the companies’ risk aversion means that the acquisition will happen later.
In addition, Jung from Unibright announced that from the customer’s point of view, many of the challenges expressed concern the user-friendliness of a tech stack operated with the baseline protocol and the operating costs. Jung mentioned that transaction costs should come down in the coming years, but this is difficult to predict when using blockchain as middleware as the only source of truth. Data protection standards and approved data are also challenges that must be overcome in order for companies to prepare for the adoption of DeFi techniques.
Interestingly, both Thomas and Schmidt assume that while Ethereum 2.0 has been predicted to power DeFi, it will not have a significant impact on the progress of the basic protocol. According to Schmidt:
“We are not restricted by Ethereum restrictions as the baseline protocol is blockchain-independent. However, if a company wants to baseline a process over the Ethereum network, ETH 2.0 can help a little when the throughput of the network increases to reduce the need for one. ” Layer 2 solution. “