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Why Does The Big Crypto Hedge Fund Say That DeFi Is promising?


Why does the big crypto hedge fund say that DeFi is promising? The time-honored crypto hedge fund with $4.5 billion of assets under its management heralds the rise of the decentralized finance (DeFi) ecosystem.

In a new letter written by CEO Dan Morehead and other executives, the crypto hedge fund Pantera Capital says that the DeFi sector is above the central bank (CeFi) due to its understanding and “rock solid” foundations. According to Pantera Capital, the DeFi system does not have the issues and human failures that exist in traditional transactions that the CeFi system does.

“DeFi, unlike fiat money, is not a house of empty cards. Its foundation is rock solid, rooted in consistent code and complete transparency. In some cases, DeFi completely removes the human subject, for example in financial decisions.

Members agree to transact publicly and transparently on the blockchain – as financial actors do business behind the scenes of an unethical, human (i.e. (consistent) and potentially counter-intuitive – is the vision we should be looking for, instead. rather than sticking to a dysfunctional central system. cash flow.

DeFi has not made a “mistake”. The engagement code is embedded in the smart contract. You don’t need to trust someone who can motivate you to tell the truth, or rely on trust to engage in financial transactions. The code only works as agreed upon by both parties.

Crypto hedge funds also say that the transparency of DeFi platforms helps to protect investors in CeFi, where central companies are forced to use DeFi for their loans, bringing their money outside . Pantera points to the collapse of lending platform °C, which had hundreds of millions of dollars in early-stage loans at the time of its collapse.

“You can say that DeFi, due to its support warning, protects you from CeFi. Celsius was forced to first repay the DeFi million loan of more than $ 400 to Developer, Aave and Compound to prevent withdrawal his license. There is no possibility to modify / reject the smart contract. In DeFi, “a deal is a deal” – you can’t go back. All financial companies that are involved in smart contracts are prohibited from paying for the DeFi protocol.

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