The American business school Wharton said in its latest report that the DeFi industry has the potential to transform global finance.
The report, titled “DeFi Beyond the Hype”, was produced by the Wharton Blockchain and Digital Asset Project with support from the World Economic Forum. The main thesis was that DeFi has every chance to completely change the financial market, but so far, according to the authors, the sphere of decentralized finance entirely consists of speculation, loans, and profit-making among the formed community of “custodians” of crypto assets. In addition, they are convinced that, in the current state, this industry is subject to many risks.
According to DeFi Pulse, the number of blocked funds currently stands at 57.81 billion. Last year, this value barely exceeded the 1 billion mark. Therefore, it is not difficult to draw conclusions about how much this industry has “shot” in just the last year.
In their report, Wharton tried to highlight the main aspects of DeFi:
- Decentralized Exchanges (DEX)
- Client asset management services
- Supporting services (wallets, oracles, etc.)
Among the main advantages of DeFi, the authors of Wharton noted:
- Reduced transaction costs for trade and distribution of financial assets d
- Increased transparency of transactions
- Severe control by shareholders
- Quick access to markets
- Increased speed of settlements in comparison with traditional financial markets
The authors did not forget about the disadvantages of DeFi, pointing out the "immaturity" of the technology, the lack of a clear regulatory framework, and fraud. They see potential centralized control as one of the main threats to DeFi, due to disproportionately distributed control among community members.