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Defy “can change global finance”


The University of Pennsylvania’s Wharton School of Business is consistently viewed as one of the best business programs in America, and is the oldest business school of business in the world. In a new ‘Blockchain and Digital Asset Project’ report titled “Defy Beyond the Hype”, Wharton School contributors detail the advantages and disadvantages of Defy, and conclude that Defy has “the ability to transform global finance”. is.

Daffy Beyond the Hype: An Overview

Wharton report, In collaboration with the World Economic Forum, provides an excellent high-level overview of the current DEFI landscape. On the first page of the twenty-page brief, the team acknowledged that despite growth in Daffy services from $ 1 billion in 2019 to more than $ 80 billion currently, Daffy as we know is still “in its maturity” Initial “.

Wharton’s associates, led by Professor Kevin Werbach, divide Buckett Defy services into six different silos: fixed stocks, exchanges, credit, derivatives, insurance, and asset management. The report dives deeper into each of these silos and how DFIs operate within them, while acknowledging that at times, the lines between them can be blurred. Verbach and Team Defy provide a strong fundamental overview looking at all the major parts of the machine (wallet, Oracle, digital assets, etc.).

The team also outlines the four “defining features” of DIFI: financial services, trust-minimum operation and settlement (ie, blockchain integration with no public permission), non-custodial design, and engaging with open, programmable, and composable architectures .

Related reading | Top 10 DFI Projects in Second Quarter of 2021

Addressing the details

The report takes time to address the nuanced details that make DIFI so desirable for some, such as governance tokens and other incentives that increase liquidity. It also addresses the costs and benefits of this decentralization, and outlines the fine lines between centralized governance, partially decentralized governance and decentralized governance.

Additionally, the report, while being somewhat partial, outlines the opportunities and challenges in Defy. The opportunities are vast, and include aspects such as reduced friction and transaction costs, better accountability, better market access and greater inclusivity of financial services. However, they do not come without inherent challenges, such as throughput, operational efficiencies in blockchain (and with traditional services), regulatory questions (especially in the current scenario), and more.

Ethereum has been a focal point in the DeFi landscape. | Source: ETH-USD on TradingView.com

That’s a wharton wrap

The detailed report summarizes a fairly complete scope of Daffy in thick twenty pages. However, in addition to providing a broader perspective of what Defy is, the Wharton team also takes time to address protocols such as Uniswap and asset pool protocols such as Sushi Swap, Compound, and AAVE.

Wharton (and growing educational institutions) are continuing to show and share their perspectives on how Daffy and blockchain technology are evolving. As aptly stated in the report, “tools are emerging on Daffy services and to simplify the user experience”.

Finally, the report concludes that “DeFi will ultimately succeed or fail depending on whether it can deliver on its promise of financial services that are open, fiduciary-minimal and non-custodial, yet trustworthy”. It is safe to conclude that there are many people who believe that Daffy is on the way to achieving it.

Related reading | DeFi is undergoing a radical transformation

Featured image from Pixabay, Charts from TradingView.com



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