DeFi institutional adoption is booming, but gas charges are hindering growth


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Panelists at a DeFi-focused talk at the BlockDown conference on Thursday were optimistic about past and future growth in decentralized funding, but highlighted the hurdles to adoption due to Ethereum’s congestion.

The panel, titled “DeFi’s Latest Waves,” consisted of Anton Bukov, Co-Founder of 1inch Network, Ajit Tripathi, Head of Institutional Business at Aave, Hyung Lee, CEO of B. Harvest, and Eric Chen, Co-Founder of Injective Protocol. The panel was moderated by Cointelegraph’s Technology Editor Andrey Shevchenko (Sincerely).

Bukov characterized the current crypto cycle as a little more mature than the past, especially 2017. The projects that fundraise today often have a developed product, while projects for the first coin offering were often “just an idea,” said Bukov .

Tripathi shared Bukov’s opinion, noting that the circle of crypto users has expanded over the past few months:

“Crypto whales came in, crypto funds came in [in the summer of 2020]. What has changed now is that there are some family offices in Aave that put money into it. And the only way we know is for them to call us. “

Tripathi nonetheless noted a degree of hesitation in front of the unknown for some of the potential attendees. In addition, legal restrictions could make it difficult for institutions to provide capital for DeFi. For them, custody solutions are beginning to appear:

“The decentralization continues, but we have noticed that DeFi is increasingly being provided via depot interfaces and fintech. And a lot of what we do is just education, advocacy, and letting people know about all the fuss. […] We are often very surprised to what extent regulated institutes are already participating in DeFi. “

Future advances at DeFi

Lee, as a representative of the Cosmos ecosystem, focused on the opportunities that arise from the connection of liquidity. In particular, he believes the next level of DeFi interoperability will be for “more complex use cases” than token transfers made possible by the Inter Blockchain Communication Protocol.

Chen also focused heavily on scalability, noting:

“What you really need to investigate is how to mitigate some of the current issues with Ethereum, for example: extremely high gas, the current AMM infrastructure – it works pretty well – but there could be some improvements too … The General” rollup Lonely Island “problem – the compositional ability and atomic transactions between [rollups] and after Ethereum. “

Bukov then told a story about 1 inch growth, noting that there were multiple periods of exponential growth:

“What we noticed as we came alive and the project was gaining traction is that we’ve created an exponential scale several times in those two years. I call it that because we had a situation where we had half the total volume of the project from the start last month. “

The last time this happened for 1 inch was January 2021, Bukov said. He concluded:

“I agree with the other speakers that gas costs are currently the biggest pain keeping DeFi from a true exponential explosion.”