Institution Money: From Crypto to DeFi 机构资金：从加密货币到分散式金融
Why DeFi protocols like EMOJIS Farm will benefit from the recent crypto trend and institution money flowing into BTC? 为什么像EMOJIS Farm这样的DeFi协议将从最近的加密趋势和流入BTC的机构资金中受益？
Cryptocurrency has been hitting the headlines over the past few months with frenzy of institutional money such as Microstrategy and Tesla flowing into Bitcoin. There is undoubtedly a trend in the market toward greater awareness and acceptance of digital assets as a new investable asset class.
80% of institutions in the United States and Europe have an interest in investing in cryptocurrencies, while more than a third have already invested in some form of digital asset, with Bitcoin being the most popular choice of investment.
A good starting point for institutional investors would be to differentiate between major cryptocurrencies such as BTC/ETH and decentralized finance (DeFi) protocols. To date, most institutional involvement in cryptocurrency is simply holding Bitcoin and not so much on revolutionary DeFi products.
There are a plethora of reasons for the recent Bitcoin trend. With the relative maturity of the market and increased liquidity, sizeable trades can now take place without resulting in excessive market movement. Other factors include the unusual high volatility, high return and a greater probability of extreme values compared with the stock market of the asset class. Bitcoin’s decade long history and its limited supply that makes it akin to digital gold have also been highlighted, making it more and more attractive in a world of inflated asset prices and unruly monetary and fiscal policies.
However, the main reason for the recent institutional interest in cryptocurrency is much less philosophical, much more practical and has to do with regulations and legacy infrastructure.
Financial institutions are old behemoths, managing billions of dollars’ worth of other people’s money, and are therefore required by law to fulfill an overabundance of rules regarding the type of assets they are holding, where they are holding them and how they are holding them.
On the one hand, in the past two years, the blockchain and crypto industry has made leaps forward in terms of regulatory clarity, at least in most developed markets. On the other hand, the development of the high-standard infrastructure that provides institutional actors with an operating model similar to that offered in the traditional world of securities now allows them to invest directly in cryptocurrency by taking custody or indirectly through derivatives and funds. This is our opinion are the real drivers in giving institutional investors enough confidence to finally venture into crypto.
Why Institutional Investors should look into DeFi products
With U.S. 10-year Treasuries yielding only 1%, the next big thing would be for institutions to look at investing in #DeFi yield products. With traditional rates in the doldrums and DeFi protocols on U.S. dollar stablecoins are yielding between 2% to 250% per annum or more, it makes complete sense for institutions to dip their toes into DeFi.
However, DeFi is in its infancy, and liquidity is still too thin in comparison with more established asset classes for institutions to bother upgrading their knowledge. Additionally, there are real, serious operational and regulatory risks when it comes to the transparency, rules and governance of these products.
There are many things that need to be developed — most of which are already underway — to ensure institutional interest in DeFi products, whether on the settlement layer, asset layer, application layer or aggregation layer.
Institutions’ primary concern is to ensure the legitimacy and compliance of their DeFi counterparts at both the protocol level and the sale execution level.
One solution is a protocol that recognizes the status of a wallet owner or of another protocol and advises the counterparty as to whether or not it fits its requirements in terms of compliance, governance, accountability and also code auditing, as the potential for malicious actors to exploit the system has been proved over and over.
This solution will need to go hand in hand with an insurance process to transfer the risk of an error, for example, in validation to a third party. We are starting to see the emergence of a few insurance protocols and mutualized insurance products, and adoption and liquidity in DeFi need to be large enough to caution the investments in time, money and expertise to fully develop viable institutional insurance products.
Another venue to be enhanced is the quality and integrity of data through trustful oracles and the need to increase the confidence in oracles to achieve compliant levels of reporting. This goes hand in hand with the need for sophisticated analytics to monitor investments and on-chain activity. And it goes without saying that more clarity on accounting and taxes is needed from certain regulators who haven’t emitted an opinion yet.
Another obvious issue concerns network fees and throughput, with requests taking from a few seconds to double-digit minutes depending on network congestion, and fees. This is, however, being resolved with plans for the development of Ethereum 2.0 in the next two years and also the emergence of blockchains more adapted to faster transactions and more stable fees.
A final, somewhat funny point would be the need for improvement in user experience/user interfaces in order to turn complex protocols and code into a more user-friendly, familiar interface.
People like to compare the blockchain revolution to the dotcom revolution. What they fail to remember is that the internet disrupted the flow of information and data, both of which were not regulated and had no existing infrastructure, and it is only in the last few years that such regulations were adopted.
The financial industry is heavily regulated especially after the 2008 financial crisis. In the United States, finance is three times more regulated than the healthcare industry. Finance has a legacy operational system and infrastructure that makes it extremely hard to disrupt and tedious to transform.
It’s likely that in the next decade, we will see a fork between instruments and protocols that are fully decentralized, fully open source and fully anonymous and instruments that will need to fit in the tight framework of the heavy regulation and archaic infrastructure of financial markets, resulting in a loss of some of the above characteristics along the way.
This will by no means slow down the fantastic rate of creativity and the relentless, fast-paced innovation in the sector, as a large number of new products in the DeFi space — products we haven’t even predicted — are anticipated. And within a quarter of a century, once DeFi will have first adapted to and then absorbed capital markets, its full potential will be unleashed, leading to a frictionless, decentralized, self-governing system.
The DeFi revolution is here, and it is here to stay. New technologies have undeniably shifted the financial industry from being controlled through social relations to being controlled through autonomous technical mechanisms.
There is a fine equilibrium to be reached between tech-based, fast-paced cryptocurrency and antiquated, regulated fiat systems. Building a bridge between the two will only benefit the system as a whole.
About EMOJIS Farm
EMOJIS.Farm was borne out of a desire to unite the DeFi community and through providing an active and fun reward environment, catalyze user adoption and create a self-sustaining community who can enjoy greater liquidity and stability.
Being a decentralised system, EMOJI is equipped with the necessary policies required to support the economy and achieve sustainable growth. With our rebasing function and on-chain governance, EMOJI has both the autonomy to maintain design specs and the nimbility to adapt to new processes and protocols, whenever and wherever necessary.
EMOJIS.Farm is also backed by Consentium and will be integrated into the Consentium super app ecosystem in the near future. We are also considering to include NFTs after launch because, ain’t our EMOJIs cute?!
How is EMOJIS.Farm different from the rest of the DeFi space?
The DeFi community has always been supportive of new projects but unfortunately, always end up having to deal with short-lived projects that typically fail due to a lack of liquidity.
EMOJI seeks to change that. Here, we actively create an environment that can generate organic growth and sustainability for the long term. Through generous yield incentivization policies and an early withdrawal penalty, EMOJIS.Farm ensures a steady pool of liquidity to support the ecosystem for the long haul. APY will be fixed at 1000% and reward will be distributed as LP token and not just $EMOJI. There will be a 24 hour timelock for LP deposits on EMOJIS.farm. Thereafter, you can withdraw anytime with the LP rewards. 5% withdrawal fees will be implemented and will be 100% redistributed to users who continue to stake.
Telegram — https://t.me/emojisfarm_chat
Website — https://emojis.farm
Medium — https://medium.com/@emojisfarm
Twitter — https://twitter.com/EmojisFarm
What is Consentium?
Consentium is the team behind EMOJIS.Farm.
Launched in April 2018, Consentium is a revolutionary platform that bridges the gap between social communication and cryptocurrency. Leveraging the popularity of chat apps as key communication channels for cryptocurrency communities, Consentium has disrupted the chat app economy with its integrated cryptocurrency wallet. The in-app wallet function allows users to send and receive CSM, BTC, USDT and ETH using just a phone number or user ID.
Operating on its own proprietary blockchain, CSM Chain, Consentium has a higher TPS that allows its 100,000-member strong community to enjoy a more seamless transaction experience.
In the near future, Consentium aims to become the premier chat platform and super-app for the DeFi space and has many exciting plans in the pipeline to expand its ecosystem. One of these plans include adopting $EMOJI tokens into the superapp, thus enabling $EMOJI to act as a conduit for users to the Consentium ecosystem.
对于机构投资者来说，一个很好的起点是区分主要加密货币，例如BTC / ETH和分散式金融（DeFi）协议。迄今为止，大多数机构参与加密货币只是持有比特币，而不是革命性的DeFi产品。
EMOJI试图改变这种状况。在这里，我们积极创造一个可以长期实现有机增长和可持续性的环境。通过慷慨的收益激励政策和提早退出罚单，EMOJIS.Farm确保了稳定的流动资金池，以长期支持生态系统。APY固定为1000％，奖励将以LP分配. EMOJIS Farm LP存款将有24小时锁定, 之后，您可以随时提取资金。EMOJIS Farm也将收取5％的提款费，并将其5％的资金重新分配给那些继续质押的用户。
在不久的将来，嘉信的目标是成为DeFi空间的首要聊天平台和超级应用程序，并且正在制定许多令人兴奋的计划来扩展其生态系统。这些计划之一包括在超级应用程序中采用$ EMOJI，从而使$ EMOJI可以充当嘉信生态系统用户的渠道。