In a letter, Pantera Capital Investment Director Joey Krug noted that the cryptocurrency industry has faced many upheavals in 2022.. However, despite this, the year was quite successful, and the DeFi sphere continues to develop rapidly.
“DeFi protocols that usually work with anonymous counterparties continued to work. There are several reasons for this, including the use of aggressive risk control measures.. The irony is that centralized organizations call such measures “harsh and inefficient”. At the same time, centralized creditors themselves give users too favorable conditions, which results in the bankruptcy of such organizations, ”said the investment director of Pantera Capital.
Joey Krug said that the algorithms that DeFi protocols run on have proven to be more reliable and better than “trust relationships” that centralized lenders use to convince users to take out a loan or invest.
“DeFi projects just can’t claim to be trustworthy, that’s why they went to MIT and generally stand for all that is good.”. On the contrary, their approach is that you should not trust anyone just like that.. In addition, they usually work on the basis of open source and anyone can check the algorithms,” Krug recalled.
For DeFi Protocol Adoption to Significantly Increase, Three Problems Need to be Addressed, Krug Says. We are talking about not very convenient software for working with cryptocurrency wallets, significant transaction fees, especially on the Ethereum network, and the lack of a convenient way to transfer fiat funds to tokens.. If these problems can be solved, then DeFi will become the basis for a new bull cycle.. Krug expects these issues to be resolved within 2-3 years.
Earlier, the CEO of Pantera Capital, Dan Morehead, said that the collapse of the FTX exchange would not affect the prospects for the cryptocurrency industry and blockchain in any way.