TradingBull Founders discuss DeFi, NFTs, BCO, Liquidity Mining, DAOs
On May 27, 2021, TradingBull’s founders Arthur & Sergey were invited to participate in a discussion sponsored by Starterbites Ventures and Ctech Events, with Malcolm Tan Chief Strategic Advisor of Technicorum as moderator and Bish Smeir, Chairman of Vow Currency as their fellow panelist. A range of blockchain topics were discussed, from emerging business models gaining traction across the space to the latest trends and innovation seen in Decentralized Finance (DeFi).
The conversation included many of the hottest innovations spreading across the blockchain ecosystem that are reaching every corner of our digital lives. Among the topics covered, NFTs, Decentralized Exchanges, Yield Farming, DAOs, Bonding Curves, Liquidity mining and KYC in DeFi were the ones that had the most lively and informative exchanges between the panelists.
Malcom kicked off the session, covering NFTs, emerging DeFi protocols and blockchain industry business models. He also shared his views about the potential value of the cryptocurrency industry as a comparison to gold. Malcolm explained that he sees crypto assets as the 5th asset class alongside equities, commodities, real estate and money markets, with a nearly endless number of innovative use cases and a market cap poised to overtake gold.
Malcolm had some concerns regarding market stability and speculation regarding Bitcoin dominance. He referenced the recent dogecoin craze as an example of how an irrational mass-market effect is still able to value digital assets based on subjective relative market sentiment and perception, mostly driven by speculation and external manipulation.
Arthur expressed how recent Decentralized Autonomous Organization (DAO) backed Bonding Curves were a fascinating topic to him. Arthur explained how in short, Bonding Curves allow for a more equitable and fair community sourced fundraising structure for early stage ventures. However, Arthur also voiced some concerns regarding the technical challenges and scaling feasibility of a fully operational DAO. He recognized that every day to day decision within a company can’t always be put to vote. Arthur noted that DAOs make it challenging to effectively allocate the resources teams need to maintain efficiency and growth within their organization.
The conversation also covered Decentralized Exchanges (DEXs), an exciting and widely discussed service offering within the DeFi space. Regarding the main value proposition of Decentralized Exchanges, Arthur explained that liquidity mining DEXes are still facing some significant challenges including centralization of liquidity involving risks of exploits by hackers, the high fees given to liquidity providers to compensate for their potential risk of impermanent loss. Arthur noted that this risk and fee structure ultimately makes DEXs way less efficient and competitive today compared to Centralized Exchanges when it comes to trading.
Additionally, the regulatory uncertainty stemming from a lack of any official recognition of DEXs makes the entire business proposition vague yet worth exploring further. With respect to the emerging regulatory environment, Arthur indicated that he would anticipate more DEXes to start enforcing know your customer (KYC) protocols in the future.
Arthur also expressed his views on the future of DEXs that could be coming from Layer 2 solutions. Order books on Layer 2 or more scalable blockchain-made hybrids with Liquidity pools and AMM could potentially help to improve DEXes efficiency while maintaining some level of liquidity with lower fees.
TradingBull’s founders have long understood that blockchain’s technical advantages stretch far beyond only cryptocurrencies into a variety of Digital Assets. Sergey explained how Non-Fungible Tokens (NFTs) could be used for a variety of applications including as a digital record for identities. As a unique and non-replicable piece of data, NFTs offer an innovative means of securely creating, sharing, and maintaining unique pieces of information across the internet.
Sergey noted that while most of the conversations regarding NFTs have been surrounding digital art, he sees the vast potential of these tokens across a variety of business models and social constructs. Sergey said that the core value of the technology is in establishing ownership of assets above all else while encouraging audience members to think about the potential use cases of NFTs.
While responding to Arthur’s perspectives on DEXs, Sergey mentioned that cross chain DEXs that tackle interoperability issues will be a place of significant evolution for trading digital assets in the future. Sergey also recognized that Decentralized Exchanges are currently of interest to many people due to reduced KYC barriers and ease of launching and listing new tokens.
Regarding the question of Bitcoin and its shrinking dominance across crypto markets, Sergey expressed his concerns of the high correlation remaining between BTC and altcoins. He developed that the market appeared to remain partially irrational regarding other digital assets taken individually, mostly due to BTC and ETH dominances and the speculation around them.
Bish explained how he sees the future of Bitcoin as an asset class. He shared his insights on market speculation and asset utility, pointing out that the crypto market is undergoing breakneck development lately while still remaining in the very early stage. Bish also acknowledged that recently, there have been a lot of real use cases for cryptocurrency, mainly coming from within the DeFi and NFT spaces. He touched on the fact that governments are also researching the technology to create their own CBDCs, which will drastically change the financial system with the assistance of blockchain technology.
Birsh also discussed his deep interest for Non Fungible tokens but underlined ongoing challenges regarding the capacity to enforce copyrights for any asset that does not exclusively occupy the digital realm, such as real world painting or real estate properties.
All in all, this was a lively discussion between business leaders in the blockchain space that covered many of the emerging topics that will be dominating the market for years to come.
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