30s Summary

GRVT’s Hong Yea argues that even decentralized finance (DeFi) needs regulation and oversight. He contradicts those who believe DeFi is self-regulating through blockchain logic, pointing out that humans program that logic and can make mistakes. He notes that regulation could attract heavyweight investors, foster trust, and improve DeFi’s credibility, albeit admitting that aligning the technology with regulatory structures is challenging. Yea also stresses that reconciling Bitcoin with the modern era is essential for DeFi to realize its potential. He predicts that, if regulated, DeFi could ultimately disrupt traditional finance.

Full Article

Check out these thoughts by Hong Yea, the big cheese over at GRVT. It’s kind of wild how some crypto brainiacs view rules and regulations in the world of decentralized finance (DeFi). Yea observed some folks at various events claiming DeFi doesn’t need any oversight. They say DeFi is self-regulating with logic embedded straight into the blockchain.

Interestingly, that’s where their argument stops making sense. Because let’s not forget, people are the ones responsible for establishing the logic, coding, and setting up the smart contracts in DeFi. And let’s be honest, we’re all prone to messing up occasionally, whether on purpose or not. The evidence of this is in the harmful deeds DeFi has already experienced.

The need for compliance in DeFi isn’t just about halting human error or naivety, though. Heavyweight investment in DeFi is more likely to flow if it’s a regulated space. More rules might seem counter-intuitive to the ‘wild west’ vibes of blockchain, but it’s actually crucial for instilling trust.

Ideally, DeFi creators need funding, investors and users need trust and big financial institutions need compliance. It’s like a domino effect. Once one piece falls, it impacts everything else. If protocols or platforms don’t play by the rules, they risk their own integrity.

Sure, the dream of decentralization is hard to critique. But some would argue that DeFi seems to be a game-changer that could tackle most traditional finance problems like high costs, slow processes, centralization, and exclusion. DeFi could be leading us to a flawless system, but that’s less likely the more room there is for human error. Even pioneers in decentralization need to recognize it doesn’t negate the need for oversight.

The shift towards regulation isn’t a negative thing. It’s actually an amalgamation of decades of adjustments, millions of learning hours, and scrutiny from loads of experts. Besides, with trillions of dollars in the balance and the future of the industry on the line, precision is uber important.

Cryptocurrency has been banned in several countries due to lack of regulation. Yet, other countries, such as the U.S., are making strides to establish cryptocurrency as legit. The best way to prevent bans is to boost the industry’s legitimacy.

Let’s face it, loads of people are now staking their livelihoods on the success of this sector besides the investors who want to grow their wealth. So, it’s important to enhance the credibility of the sector. In spite of Bitcoin’s anti-establishment origins, it’s high time to reconcile with the modern era to allow DeFi to fulfill its potential.

However, we shouldn’t ignore the hurdles along the way. Transforming into a regulated DeFi world means ensuring that all the logic built into this sphere syncs with regulations. If that happens, like many crypto founders believe, DeFi might give traditional finance a run for its money and carve out a better future.

That’s it from Hong Yea – the head honcho at GRVT. After ten years trading at Credit Suisse and Goldman Sachs, he co-founded GRVT in May 2022. GRVT’s mission is to revolutionize financial markets by integrating blockchain tech and self-custody solutions, with a focus on blockchain settlement and trustless risk management. Yea’s international upbringing and business studies at Yonsei University deeply influence GRVT’s strategic vision.

Just so you know, this article is just for info and should not be taken as legal or financial advice. The views here are solely Hong Yea’s and don’t necessarily reflect those of Cointelegraph.