Therefore, the GSR Matrix Fund invited Ender Xu (GSR Matrix Fund Managing partner), Bertie (Jackdaw Capital CEO), and Edge Wang(blockchain technology and financial technology expert) to discuss whether the point of integrating traditional and digital finance is dawning.

Almost all financial services, such as stock transactions, derivatives, mortgages and loans, that only involve the transaction level of the industry, have corresponding plans from DeFi. Its transparency and feature of permissionless may in fact make the regulatory authorities more reassured, so will the users be, who invest with their money, as assets are locked through smart contracts, greatly reducing the likelihood of moral risks. In fact, online finance is to make such financial services civilian on a large scale, but due to the lack of transparency of the centralized systems, many moral risks occurred, preventing P2P from achieving its original aim. From this perspective, DeFi may accomplish these historical missions unfinished by the online finance and form a brand-new financial service system. -- Edge Wang

According to my personal judgment, reduced non-friction experiences on the part of users, radical fall in the gas fees, full-scale improvement of security performance and relatively high return anticipation should bring huge influence on traditional finance. The logic behind is in fact the fundamental improvement and reform of infrastructure. I believe the greatest impact on financial institutions is opposition to shared governance. The true genes of DeFi are decentralized and permissionless both in terms of technology and philosophy. It takes time to change the status-quo, or gradually integrate. Traditional financial institutions may lose opportunities at this stage. -- Ender Xu

Main Factors currently in what will make a traditional VC invest in DeFi is calculated diversification. Understanding we stand on the precipice of fiscal change, economically, politically. Trust is becoming increasingly valuable. DeFi poses an intelligent solution. -- Bertie

My personal investment logic in the field of DeFi is technical innovation, business logic and algorithm models of projects.The Cheese Lending Protocol currently shows me the new possibilities of future Defi Lending with the creative mechanism allowing LP token as the collateral. One of the groups in real demand of mobility is DEX market-makers. They can gain profit from market-making after providing DEX with funds, but the voucher of the liquidity pool they get (LP) is a kind of assets lacking liquidity--underlying assets, right to earnings and all other rights are deprived after selling in the secondary market. Therefore, their liquidity terminates due to market making. The only solution is to allow them to pledge and loan with LP, similar to the model of pledging with stocks and real estates: assets, rights and interests are still theirs, but there is new liquidity gained, enabling them to further invest in other assets, and redeem assets simply by paying interest. This is a real model that improves liquidity. Cheese Bank detects such an opportunity, therefore, I propose it as a case here and look forward to their development. -- Ender Xu

I think when DeFi and digital banking come together we'll see a banking system that runs completely autonomously - without people, without bank branches, without lengthy application or legal processes. A system where smart contract functionality will allow anyone with a smartphone to instantly tap into a wide range of financial services 24/7, 365 days a year. -- Bertie

I believe digital banks should have huge advantages to enter the quality mainstream tangible assets into the rising DeFi field, as licensed exchanges in the field of digital assets or other institutions that can issue stable currencies like USDC or GUSD all turn up with identities similar to currency exchange institutions of exchanges, applying for regulatory licenses in all countries to issue stable currencies. From the perspective of digital banks, in turn, digital banks have naturally been qualified to operate licensed bank transactions all round the world, making it possible to connect with the digital assets field by simply adding the condition of permission to issue stable currencies. It is obviously a non-financial institution, or a financial institution with narrow business scope, boasting much greater advantages in doing this. Other transactions such as assets pledge are pretty easy to be realized, since this is also allowed in the business scope of banks, much easier than accessing to this transaction by a purely digital asset institution. -- Edge Wang

Products such as MakerDao are a universal currency for those native digital assets users (and investors with digital assets) in a DeFi (decentralized finance) wold. Therefore, their limitation is actually the overall currency value of their existing digital assets. Current digital banks and funds are exploring how to link the huge tangible assets and old money outside DeFi to a freer and fairer DeFi platform through compliance. I believe only with the appearance of such products can DeFi's world atlas become strong enough. —— Ender Xu

Read the entire interview: https://medium.com/@todefi/defi-makes-vc-gradually-disappear-but-when-combine-with-digital-bank-it-may-become-a-pivot-point-a3a551d41fd6

SOURCE GSR Matrix Fund

This website is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security, nor does it constitute an offer to provide investment advisory or other services by FINYEAR.
No reference to any specific security constitutes a recommendation to buy, sell or hold that security or any other security.
Nothing on this website shall be considered a solicitation or offer to buy or sell any security, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction.
Nothing contained on the website constitutes investment advice or offers any opinion with respect to the suitability of any security, and the views expressed on this website should not be taken as advice to buy, sell or hold any security. In preparing the information contained in this website, we have not taken into account the investment needs, objectives and financial circumstances of any particular investor.
This information has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this information and investments discussed may not be suitable for all investors.
Any views expressed on this website by us were prepared based upon the information available to us at the time such views were written. Changed or additional information could cause such views to change.
All information is subject to possible correction. Information may quickly become unreliable for various reasons, including changes in market conditions or economic circumstances.

Finyear : Future Finance, Fintech, DeFi | Daily News
Chaineum : The DeFi Company
HealthTech.Finance : Healthtech Investment Bank
Laurent Leloup : Blockchain & DeFi Advisor