Decentralized finance (DeFi) is coming to the crypto world to stay. During this year 2020, more and more leading figures in the crypto community have referred to DeFi as the future of Blockchain technology. That is why, Tokocryptro dedicates its event, the Indonesia Blockchain Week 2020, to this sector. In which Changpeng Zhao explains the obstacles to DeFi.
Changpeng Zhao (CZ): “DeFi is the future”
DeFi in the crypto market
Although they have been around for several years, it was only recently that the DeFi became a recurring theme for the community. From now on, we can talk about the existence of a sufficient infrastructure in the crypto market, thanks to the work done by organizations such as Binance or the Tron Foundation, so that decentralized finance can prosper within the crypto world.
In this sense, for the founder and CEO of the largest exchange in the world, Changpeng Zhao, it is now that people are beginning to accept the existence of these decentralized services to provide liquidity to the economy. He warns, however, that DeFi is a nascent industry, so not all projects born at this time will be successful.
Therefore, Changpeng Zhao warned during his presentation that most DeFi projects are likely to fail today. He advised the crypto community to be very careful when investing in decentralized finance platforms. Conducting a thorough investigation of each project before risking its capital. For, although the platforms that survive will increase in value dozens of times, these will not be the majority.
What was the path followed by Changpeng Zhao?
The challenges for decentralized finance
Likewise, when commenting on the challenges faced by DeFi to achieve massification within the crypto market. Changpeng Zhao identified two main obstacles that need to be resolved for decentralized finance to release its full potential.
The first of these obstacles is the lack of knowledge of crypto users about the options that DeFi offer to them. For, as Zhao mentioned, most people are not used to taking care of their money themselves. On the contrary, the idea of entering a platform with an email, and having technical support in case we lose our password, is the most common thing for us.
Therefore, to get the DeFi to reach the entire crypto community. The users of the community must first acquire the ability to manage their personal information, access to their wallets, and all the elements necessary for decentralized finance to be truly decentralized.
Finally, the second obstacle identified by Changpeng Zhao for the development of the DeFi, would be the low scalability in the Blockchain of the main crypto currencies. So, while chains like Bitcoin Revolution and Ethereum are overcome when they handle too many transactions. Other more efficient Blockchains, like the Binance Chain itself, are not yet well known to the public. Limiting the capacity of decentralized finance platforms