What we're seeing in the decentralized finance space today is radical innovation, fundamental freedom, and the rethinking of the forces guiding the world’s financial market. DeFi has been around for only a few short years, and has already managed to rebuild many categories of legacy financial products, including brokerage, asset management, lending, insurance, and payments, hence creating an interoperable, transparent, easily accessible, and more secure framework.
Decentralized financial platforms, whether they are exchanges, yield aggregators, or lending protocols, are seeing exponential growth. The collateral locked in Ethereum-based DeFi protocols alone has crossed $50 billion, up from $15 billion at the beginning of the year. Resultantly, digital asset funds, family offices, and traditional financial institutions have increasingly begun seeking exposure to this novel world of economic opportunities.
For them, however, crossing the chasm from CeFi to DeFi isn't as simple as it is for retail investors. When we think about what it means to be a financial institution, there's a whole spectrum of how regulated an entity is and the full body and complexity of legislation that applies to it. And the further we go from left to right, from non-regulated to heavily regulated, the harder it becomes for these entities to innovate themselves or to leverage the disruptive …