According to a report by CoinDesk, dYdX Foundation CEO Charles D’Haussy stated that the current stage of development in decentralized finance (DeFi) is similar to the internet in the 1990s, with much to learn from its development experience. Additionally, he believes that DeFi and centralized finance (CeFi) play different roles, with demand in the market for both.
The “walled garden” moment of DeFi
During the Hong Kong Fintech Week, D’Haussy stated in an interview with CoinDesk that regulatory requirements and increased demand for integrated products could drive growth in niche DeFi sectors. Despite a market downturn in the past year, with the development of retail products, DeFi may witness its “internet” moment.
D’Haussy predicts that the development of the DeFi market will be similar to the recent development of the internet – people mainly interact through applications rather than web browsers. He said:
Can complement CeFi, need to overcome regulatory challenges
D’Haussy also sees similarities in the regulatory evolution between the internet and DeFi. He explained that in the 1990s, regulators sought to understand and control the decentralized nature of the internet, attempting to find a non-existent “internet CEO,” and ultimately shifting focus to regulating internet access service providers such as America Online (AOL) and other ISPs.
He believes that while DeFi operates as a decentralized, open, and unpredictable financial ecosystem, regulatory agencies will not target the protocols themselves, but will focus on centralized finance (CeFi) platforms and other gateways as regulatory entry points.
In conclusion, D’Haussy stated that once the market clarifies how to integrate CeFi and DeFi, and addresses regulatory and technical challenges, we will usher in the future of finance. Where might this happen? It could be in Hong Kong – one of the most strategic and important hubs for cryptocurrencies.
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