In a recent newsletter, the Co-Chief Investment Officer of blockchain-focused investment firm Pantera Capital Management LP, Joey Krug, has stated his belief that he is “99.9% convinced that DeFi is the future of finance.” According to Krug, DeFi provides a very great alternative to the conventional financial system especially in the light of the current GameStop saga that saw the traditional system impose strict restrictions and regulations that curtailed the market activities of traders.
The moment of truth dawned on him last year when he was trying to trade from one asset into another. According to him, the process he underwent, using DeFi, was seamless, efficient and delivered his desired result in record time. And coupled with the fact that he was able to perform all of this “at about 2 AM, when the banking system would’ve been closed,” this made him “realize (that) finance is never going back.”
Krug went on to highlight how DeFi could be of great benefit to potential traders in overcoming all of the challenges posed by the traditional financial system. He says that one advantage the crypto sector has over the conventional finance system is that it is universal and because of its cheap charges and the less use of intermediaries, it is easily able to “get rid of the rigged system and replaces it with a shared public infrastructure that cannot be rigged. No broker can ratchet up collateral requirements because there is no gatekeeper broker.” He was also quick to add the fact that the system was easily accessible to everyone across the world as it had little to no entry barrier.
DeFi has made waves in recent times especially due to the way it has democratized the financial system. It has been able to totally eradicate the need for a middleman in financial transactions and its cheap transaction fees keeps drawing people to the sector.