The market for decentralized finance (DeFi) has fallen sharply in recent weeks, and yet SEC Commissioner Hester Peirce is convinced that the young sector will fundamentally change the financial world – why is that?
Not only Bitcoin and Ethereum, but also the DeFi market has had to bleed in the past few weeks. In the past seven days alone, investors have pulled over $ 15 billion from DeFi protocols smart contracts.
Total Value Locked (TVL) shrank within a single week by 20.41 percent. This has also been reflected in the courses of some DeFi heavyweights. The DeFi projects Uniswap (UNI), Chainlink (LINK), Aave (Aave) and PancakeSwap (Cake) all recorded price losses in the double-digit percentage range last week. In addition, the prices of some smaller DeFi tokens fell even more sharply. On a weekly basis, several tokens lost between 40 and 59 percent of their market capitalization.
Despite the poor performance, there were some interesting developments this week as well.
Tokenized stocks on Solana
The Swiss tokenization company Digital Assets AG (DAAG) brings tokenized shares to the Solana Blockchain – among other things, shares from Facebook, Google and Tesla should be able to be traded. With this step, the company wants to migrate its tokenization infrastructure to the Solana network. This should make an important contribution to the merger of CeFi and DeFi, says Anatoly Yakovenko, CEO of Solana Labs.
The tokenized shares are initially available exclusively on the FTX crypto exchange. Only users who have gone through the KYC process at FTX can currently use the offer. The tokenized shares of DAAG should be freely transferable as “free-floating tokens”. This enables the shares to be traded on the secondary market around the clock. In addition, both central and decentralized stock exchanges should be able to trade the tokenized shares.
“DeFi will revolutionize the financial world”
Another positive piece of news for the DeFi sector comes from none other than Securities and Exchange (SEC) Commissioner Hester M. Peirce. Peirce has already made positive comments about Bitcoin in the past and has repeatedly advocated a Bitcoin ETF. That earned her the nickname “Crypto Mom”. Now she stressed the potential of decentralized finance on the Digital Asset Markets Conference 2021.
There are tons of exciting developments going on in DeFi that will revolutionize finance. Therefore, we should encourage these developments and build things on decentralized platforms. This will give even more people access to financial services.
The SEC commissioner also stressed that regulators should create more regulatory clarity for the DeFi space instead of issuing bans.
DeFi project Karura wins first Kusama Parachain auction
Happy news for Kusama fans: the first Parachain auction was successfully held on the Kusama (KSM) network. The winner is called Karura (KAR). Overall, the DeFi project was able to collect over 500,000 KSM (over 100 million US dollars) from its community in a crowdloan campaign. That corresponds to a little more than 5.5 percent of all KSM in circulation and was enough to win the Parachain auction.
Karura describes itself as the all-in-one DeFi hub from Kusama and intends to offer a range of applications from decentralized finance in the future. For example, in addition to a decentralized exchange and various lending and staking services, a stablecoin is also to be introduced. In addition, Karura is said to be fully compatible with Ethereum.