[Parker] DeFi at a crossroads - asking the experts for some direction
[Parker’s Crypto Story] This year, DeFi, short for decentralized finance, has consistently emerged as an issue. What do experts think about the current state of DeFi? Mo Jong-wu, the co-founder of DeFi project Growfi, Kang Seong-wook, enterprise developer at Ellipti, a blockchain ecosystem project, and Bae Jin-woo and Woon Yong-yeok from the traditional finance world shared their thoughts. #We must think about building a sustainable DeFi ecosystem How are industry experts looking at the issue of DeFi, which has recently surfaced as an issue? The point that Mo and Kang agreed upon was that there needs to be a discussion about building a sustainable DeFi ecosystem. Regarding the difference between YFI and folk governance token, Mo said “YFI is a governance token based on yEarn. yEarn is a project, for which the deposit amount was about $10 million before YFI was published. However, publishing the tokens without specific substances like fork tokens is not fundamentally sustainable. It is like creating something from nothing. The investors need to check if the particular protocol is a project that has been approved by the market.” Several examples have been raised. Kang mentioned Get Protocol, a blockchain-based ticketing solution, and DeFi trial solution Kleros, in order to discuss the conditions of a sustainable DeFi ecosystem. “I personally do not prefer governance tokens. If possible, there needs to be utility tokens instead of governance tokens, so that the real user base is secured in the business model. Get Protocol is a good example of a utility token. Get Protocol sends GET, which is a utility token, to a particular incineration spot in order to modify the fluctuating information about tickets. Also, the ticket protocol uses the information as the API points of the ticket information modification system. In the DeFi territory, 1inch.exchange, which operates a gas fee discount system using its own tokens, has been notable. If you had to publish governance tokens, there needs to be a structure that can mediate the users’ exercise of their skills. The Kleros project is applying game theory to dissolve conflict. If a user wants to make a claim in Kleros, they need to secure collateral, and if the claim is rejected by the community members, they need to bear the risk of losing the collateral. However, it is hard to say that the current governance tokens are able to endure that risk.” #Rise of Musinsa in DeFi? The appearance of a DeFi aggregator However, behind the scenes of the governance token craze, some real progress is also being made. The emergence of Aggregator is a good example. Aggregator plays the role of tying the existing DeFi protocol and providing the resource to the liquidity providers and investors. “Aggregator can be categorized into two groups: Web 2.0, internet-based protocol that is able to be detected and Web 3.0, which has resistance to DeFi censorship. A representative Aggregator of Web 3.0 is 1inch. If Aggregator is not in a DeFi ecosystem, an array of DeFi models like Uniswap, Balancer and Curve must be studied individually. However, 1inch provides the optimal price by congregating most DeFi liquidity pool into one, allowing the interface to approach DeFi even without the knowledge of the DeFi model,” said Mo, as he emphasized that progress in the DeFi interface has been steadily occurring.