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“I think DeFi (decentralized finance) needs to go from this ‘degen’ and tacky culture to something ubiquitous where a normal user has access”, said Imran Mohamad, in a conversation with Blockhead about the future of DeFi.
Imran heads marketing at Kyber Network, a multi-chain DeFi protocol that aggregates liquidity and enables the exchange of over 20,000 tokens from more than 60 DEXs (decentralised exchanges) on 12 chains including Ethereum, Polygon, BNB Chain, and Avalanche.
Previously heading marketing at e-commerce platform ShopBack, Imran said that the issue with web2 platforms is that users are required to give up control of their their data, and the centralized nature of such platforms means there is very little data protection afforded to users.
However, because Web3 and it’s constituents like DeFi essentially originated from the idea behind Bitcoin, a decentralised, peer-to-peer currency, it has sparked a movement to reinvent the financial system by providing its participants with a higher degree of ownership, privacy, and access to their assets.
“We believe that there’s a very fundamental human right to freedom and controlling your own destiny and assets”, he said
“There’s this whole hype around cryptocurrency and its prices, but if you look at the people building in this space, it’s very much driven by that philosophy”, he added.
Read more: DeFi is a Rich Nerd’s Pipe Dream
Imran concedes that there are challenges ahead for DeFi, including the need for improvements in the technology as well as effective regulation that does not hinder innovation. However, he also noted that the current regulatory landscape remains unclear.
“The current regulation is very broad and vague. It doesn’t really cover all the use cases and I think for good reason. One is that all the use cases of DeFi are not defined yet and there are no precedents on this…And as far as as the industry is trying to innovate, the regulators are literally trying to chase, do research, and look for the legal precedents as well,” he explained.
“What needs to happen for DeFi to professionalise and gain reputation and users is a few factors – technological advancements, UX advancements, but also proper accountability and risk management practices,” he said.
“Hybridization” with TradFi
When asked if DeFi can truly become decentralised, Imran said that some degree of centralisation will always have to exist within decentralised services in a “hybridized” model to ensure security and availability. For example, Kyber Network works with centralised providers like Google Cloud to ensure 99.99% uptime.
While Imran believes that the ethos of decentralisation is to allow users to have self-custody over their assets, he does not think that DeFi will completely replace TradFi, and that more hybridization with traditional finance will likely occur on multiple fronts including the use of permissioned blockchains in financial institutions and CBDCs (central bank digital currencies).
“I don’t think that everyone in Singapore would suddenly throw away their iBanking. It does not seem reasonable to think of that within the next two decades, but I think it’s very foreseeable that crypto assets will start appearing in iBanking”, he said.
“There will be a time where it [DeFi] is just seen as normal. And it’s just another option right? Some users may not care at all, some users would rather have their money with an institution and that’s fine,” he added.