Digital Bank + DeFi could become a hub to take advantage of traditional finance

SILICON VALLEY, California, October 10, 2020 / PRNewswire / – The People’s Bank of China may cultivate users’ habit of using personal encrypted digital wallets, which will promote popularization of blockchain and challenge digital assets to some extent. Therefore, the GSR Matrix Fund invited Ender Xu (Manager of the GSR Matrix Fund), Bertie (CEO of Jackdaw Capital), and Edge wang(blockchain technology and financial technology expert) to discuss the advisability of integrating traditional and digital finance.


  • Almost all financial services, such as stock transactions, derivatives, mortgages, and loans, which only involve the industry’s level of transaction, have corresponding DeFi plans. Its transparency and permissionless functionality can actually reassure regulators, as well as users, who invest with their money, as assets are locked in by smart contracts, greatly reducing the likelihood of moral risks. In fact, online finance needs to make these financial services civil on a large scale, but due to the lack of transparency of centralized systems, many moral risks have arisen, preventing P2P from achieving its original purpose. From this perspective, DeFi can accomplish these historic unfinished business of online finance and form a whole new system of financial services. – Edge wang
  • In my personal judgment, the reduction in non-friction experiences on the part of users, drastically lowering gas costs, large-scale improvement in safety performance, and relatively high return anticipation should have a huge influence on traditional finance. The rationale behind is actually fundamental improvement and reform of infrastructure. I believe the biggest impact on financial institutions is opposition to shared governance. The real genes of DeFi are decentralized and permissionless both in terms of technology and philosophy. It takes time to change the status quo, or to integrate gradually. Traditional financial institutions may lose opportunities at this point. – Ender Xu
  • The main factors that will drive a traditional VC to invest in DeFi today are calculated diversification. Understanding that we are on the precipice of fiscal change, economically, politically. Trust is becoming more and more valuable. DeFi poses a smart solution. – Bertie
  • My personal investment logic in the field of DeFi is technical innovation, business logic and project algorithm models.The cheese loan protocol is currently showing me the new possibilities of the future Defi loan with the creative mechanism allowing the LP token as collateral. One of the groups in real demand for mobility is that of DEX market-makers. They may profit from market making after providing funds to DEX, but the voucher from the cash pool they get (LP) is a kind of asset that is lacking in liquidity – the underlying assets, the right to profits and all other rights are deprived after the sale in the secondary market. Therefore, their liquidity ends due to market making. The only solution is to allow them to pledge and lend to LP, like the model of pledging shares and real estate: the assets, rights and interests still belong to them, but new liquidity is acquired. which allows them to invest more in other assets. , and buy back assets simply by paying interest. It’s a real model that improves liquidity. Cheese bank detects such an opportunity, therefore, I propose it as a case here and look forward to their development. – Ender Xu
  • I think when DeFi and digital banking come together, we will see a banking system that operates completely on its own – with no people, no bank branches, no lengthy requests or legal processes. A system in which smart contract functionality will allow anyone with a smartphone to instantly access a wide range of financial services 24 hours a day, 7 days a week, 365 days a year. – Bertie
  • I believe that digital banks should have huge advantages in integrating quality traditional tangible assets in the burgeoning field of DeFi, as the licensed exchanges in the field of digital assets or other institutions that can issue Stable currencies like the USDC or the GUSD all come with similar identities to the currency. stock exchange exchange institutions, applying for regulatory licenses in all countries to issue stable currencies. From the perspective of digital banks, in turn, digital banks have naturally been qualified to conduct licensed banking transactions around the world, making it possible to connect to the realm of digital assets by simply adding the condition of authorization. to issue stable currencies. Clearly, this is a non-financial institution or a financial institution with a narrow scope of activity that enjoys many more advantages in this regard. Other transactions such as asset pledging are quite easy to do, as this is also allowed within the scope of banking, much easier than accessing this transaction through a purely digital asset institution. – Edge wang
  • Products like MakerDao are a universal currency for users of native digital assets (and investors with digital assets) in a DeFi (decentralized finance) world. Therefore, their limit is actually the overall dollar value of their existing digital assets. Today’s banks and digital funds are exploring how to connect huge tangible assets and old money outside of DeFi to a freer, fairer DeFi platform through compliance. I think it is only with the appearance of such products that DeFi’s World Atlas can become strong enough. —— Ender Xu

Read the full interview:

SOURCE GSR Matrix Fund

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