Between decline and restrictions ... What is the future of decentralized financing platforms?

decentralized finance Decentralized finance or DeFi, is a general term referring to financial products and services that can be accessed by anyone, and it is a system of financial products registered on Blockchain Blockchain, which enables buyers, sellers, lenders and borrowers to interact with each other.

This system differs from traditional (central) financing, where intermediaries, such as banks or brokerage firms, operate, and benefiting from it requires the presentation of government-issued documents, such as social security or a passport.

The volume of premium and financial assets on decentralized financing platforms has increased since the summer of 2017. 2020 Significantly, make up Ethereum The most prominent party among them all, with reference to emerging projects such as Binance Smart Chain Binance Smart Chain, And Solana Solana And Terrawhich is witnessing a significant growth in its market share.

Regulatory oversight of these decentralized platforms is minimal, however, and the situation may not last for long, as the head of the US Securities and Exchange Commission continues Gary Gensler Confirmation that big changes are coming.

In particular, he said Gensler Many projects that classify themselves as decentralized finance do not count as such, which puts them squarely under the committee's scrutiny.

Will decentralized finance platforms end?

While sharing his notes, he said Charles Hoskinson platform founder Cardano Cardano and co-founder of the network EthereumHe believes that decentralized finance platforms are "inside a bubble," adding that it's not much different from what was seen with the ICO mania in 2017.

except if Hoskinson However, being in this bubble is not necessarily a negative thing:

“This bubble does not necessarily mean that these platforms are in a bad position, it means that people perceive the value, but the market is having a very difficult time pricing that value.”

In support of this view, he spoke Hoskinson On the proliferation of projects with low liquidity, amounting to one billion dollars, he explained that this trend indicates the existence of a fundamental problem, which may mean a decline in the decentralized finance industry.

He also referred to recent comments from the SEC chairperson, expressing his concerns about disrupting decentralized finance platforms, perhaps by forcing projects to track users and requiring identification for participation.

As such, decentralized platforms as we know them may be coming to an end, and with another alternative prepared, the next generation of decentralized finance will be ready to take off again.