Huobi’s Senior Director of Global Business and the CEO of Kava Labs discussed how DeFi can go mainstream with the help of centralized exchanges in 2021.
Chern Chung from Huobi and Brian Kerr of Kava Labs sat down recently to see how two distinctively different crypto services can come together to create a whole new financial landscape that will see crypto traders to get the best of both, centralized crypto exchange services and DeFi.
At first glance, centralized financial institutions embracing decentralized financial products and services seems like a stretch. Exchange platforms allow people to buy and sell digital currencies and tokens, are centralized financial institutions and most have basic investment features. DeFi, on the other hand, is a whole world of financial instruments that include loans, staking, data provision, payment solutions and much more.
Mr. Chung said in the meeting that he is a firm believer of DeFi and its pelothera of real world applications. Citing Huobi as a leader of digital assets, he explained that the recent listing of KAVA on Huobi is a part of a much broader view,
“…our DeFi strategy goes far beyond exchange listings. To help drive industry collaboration and adoption, we recently launched a dedicated division within the company called Huobi DeFi Labs, creating a Global DeFi Alliance consisting of an international consortium of centralized and decentralized financial service providers and platforms like Maker Foundation, Compound, and NEST”
The support of DeFi based projects by CeFi institutions like Huobi is important, as nearly all of the majority of crypto users today are using centralized services such as Huobi and that means they are not yet a part of the expanding DeFi network. For Mr. Kerr, this is a huge missed opportunity and to capture this, DeFi based projects will need to collaborate with crypto exchanges. He believes the strategy should be not to push DeFi on to these people, but to bring it to the exchanges, where the traders and users are comfortable in an already familiar environment.
CeFi Rescue, DeFi Expansion
For the most part, the DeFi sector is uncensored in nature, one of the founding principles of blockchain. The reality is much different. Regulations are getting ever tighter and DeFi service providers are either forced to centralize their services or go completely off the grid. This severely hampers the adoption as in both cases, people can stop using the services or run a risk of being scammed in unregulated platforms.
CeFi can help bridge this gap. As a regulatory compliant exchange that does its KYC/AML checks, Huobi is in a unique position to help connect DeFi and Kerr opined that KAVA Labs is cooperating with central exchanges to give their users more options while increasing regulatory compliance,
“For us this means working collaboratively with exchanges to create direct integrations where a user can participate in DeFi with their assets in such a few simple clicks. This is a superior experience to today’s DeFi in many ways and for exchanges that provide this improved experience to their users, they will see more adoption and more assets flowing into their exchanges to take advantage of this.”
KAVA is one of the leading DeFi lending platforms that allows financial institutions to tap into cutting-edge crypto products. It’s collaboration and listing on Huobi, a globally top ten exchange is delivering products and services that users have been asking for
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