Introducing Harmony’s State of DeFi — Part I: Ecosystem and Toolset

Nikolaos Kostopoulos
Sep 28 · 4 min read

Harmony is excited to unveil its inaugural edition of the DEFI FOCUS — an active ecosystem and toolset to support the fast-growing Peer-to-Peer Economy.

Harmony Founder- Stephen Tse- has presented in a packed conference hall during Shanghai Blockchain Week our action plan to flourish the DeFi ecosystem.

Official Presentation of Harmony’s Roadmap in Shanghai

Towards establishing the foundations for this new initiative, we have organized our first thematic conference — DefiAsia — along with Findora and Algorand in Shanghai. We had the chance to host leading startups flourishing the decentralized finance ecosystem like MakerDao, HummingBot, HubToken, JoinHub, AlphaWallet, dForce, DDEX, and YellowHat DAO.

These are exciting times for DeFi economy and we hope to see Harmony, and, indeed, all players in this space forge new success in the road to greater financial inclusion.

What is DeFi?

DeFi is short for decentralized finance, a notion that those who invest in cryptocurrency can recreate traditional finance instruments without any intermediaries or traditional central authority. Because of the lack of central authorities to overlook original DeFi applications, there aren’t any constraints enforced by banks. Alex Pack, the managing partner at Dragonfly Capital states, “The goal of DeFi is to reconstruct the banking system for the whole world in this open, permissionless way”.

The key pillars of DeFi today are surrounded around investing, payments, borrowing, and lending — while Harmony is looking to unlock new domains that are currently overlooked by the major DeFi ecosystem including but not limited to insurance, benchmarking tools, inheritance, subscriptions, governance, clearing, commodities, and data monetization DAOs.

In the short history of Open Finance Ecosystems- we can see three landmarks that prepared us for what we can design today.

The first of which is Public blockchain/mining, followed by fiat-crypto exchanges and finally, the creation of open finance infrastructure as we know DeFi.

Cryptocurrency exchanges — despite its inherent market inefficiencies- have set strong foundations to transform analogue liquidity into digital liquidity. Fiat can be converted into digital non-sovereign cryptocurrencies (Maker DAI stablecoin, Bitcoin/BTC, ether/ETH, etc.) as well as fiat-backed stable coins, ie. TrueUSD, USDC, etc.

Here is an idea of what the current DeFi ecosystem is like:

Image Courtesy of Andrew Wong -A walkthrough of the DeFi ecosystem on Ethereum as summarized on an extensive report about DeFi ecosystem: The next FinTech: Global “Open Finance” Infrastructure.

At the same time, the DeFi report published by Binance on June 6th, 2019 the takeaways from the industry speak for themselves.

Comparison of circulating marketcap (in USD million) as of June 5th 2019 across large stablecoins (excluding Tether).

What are the foundations for creating a strong DeFi ecosystem?

  • Stable coins or liquid digital assets for use cases that are not speculative
  • A stable blockchain platform. Fees and speed of transaction settlement are both critical for the DeFi industry.
  • A set of open-source smart contracts that DApp developers can utilize. Here comes the Harmony DeFi toolset : a set of smart contract to interact with, so that new DeFi applications don’t have to start from the scratch.

Among the key developers as presented on Harmony’s updated development roadmap in Shanghai key foundations delivered will include:

Q4 2019: Port DeFi apps

Q1 2020: Confidential assets & Lending credit data

To learn more about Harmony’s latest developments visit:

Nikolaos Kostopoulos

Written by

Advising governments & interest groups on cryptocurrency & FinTech regulation in the European Union.

Harmony

Harmony

To scale trust for billions of people and create a radically fair economy

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