TradFi in DeFi: an explosive mix for mass adoption

While blockchain and cryptocurrencies continue to be seen as curiosities by newbies, institutions are still starting to position themselves in this sector, interested in DeFi returns. However, serial hacks, like that of Axie Infinity it doesn’t help to remove this risky asset label. However, in order to try to get more people involved in DeFi, he may have to take inspiration from his devilish alter ego: TradFi.

A cryptocurrency market still considered “at risk”

One of the biggest obstacles to the adoption of DeFi is the volatility of the market. Add to this the fact that many people struggle with the idea that cryptocurrencies are not based on anything tangible. This is likely due to the fact that for most people, fiat currency is based on a material value like gold, for example.

However, since the end of the gold standard, money is no longer based on anything tangible. But only on the trust placed in it. As with bitcoin and other cryptocurrencies, fiat (Euros, Dollars, etc.) their value is based solely on whether enough people believe they have it.

With the difference that fiat has the support of a centralized body called: ” Central bank“But the solutions can change the mind of the most recalcitrant investors.

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Offer crypto assets similar to those found in TradFi

To allow the onboarding of an increasing number of users, both institutional and private. It would be interesting to offer tokens indexed to the price of some shares or commodities. As could be the case with VNX Gold, for example, which is a blockchain-based token Ethereum .

The advantage of such a product, in view of mass adoption, is that the token in question is a property title certified by the “London Bullion Market Association” (LBMA).

In addition, this financial product has been dubbed by the sacrosanct AMF. This would calm the worries of the most fearful.

When it comes to tokenized stocks, these products have been offered by centralized exchanges like Binance or FTX, but regulation ended up banning this type of product in several countries.

Right now, Mirror Protocol seems to be the only decentralized alternative for this type of financial activity.

However, the offer is still quite limited, as the platform offers only a few US stocks. This represents an obstacle to its adoption.

If this type of alternative became more democratic and it became possible to trade oil, copper, all the shares of the S&P 500or CAC 40. This could provide a familiar environment for traditional finance enthusiasts.

A trial was started in Argentina from Santander. It remains to be seen just how successful this initiative will be in the country.

The stablecoin for a DeFi adoption?

While widely used in cryptocurrency and DeFi, stablecoin has not been unanimous with regulators. The best known of these is the USDT stablecoin provided by the company Tether. But the latter is often struggling with American regulation. Because USDT’s collateral with real assets is often questioned by the authorities. To the point of being called a “time bomb”. The main fear is that in the event of a hack or any other problem, Tether will not be able to compensate for the losses of its users.


However, under strict regulations, Tether must use external accountants to disclose the size of its reserves at the end of each quarter. But it seems that the Tether team takes over the management of the TUSD and cleans up its reserves .

TUSD (Trust USD)it could therefore be part of the solution, since the TUSD is a stablecoin that is based on US dollars. Additionally, this stablecoin is held in bank accounts of several trust companies.

A clear and transparent reservation by the companies issuing these stablecoins would therefore allow to calm the regulation and, consequently, the potential investors of TradFi.

Solutions for acquiring individuals and professionals who are prudent in dealing with DeFi appear to be progressively being put in place. The only drawback is the regulation. Since without its approval on assets such as stablecoins, more cautious investors will prefer their returns of a few percentage points to the DeFi .

It is only a matter of time before traditional financial traders defend DeFi and cryptocurrencies as a whole. Take control! Take advantage of an exceptional offer: up to € 100 in free cryptocurrencieswhen you register on the Swissborg platform(affiliate link, for a minimum deposit of 50 €)

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