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action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home4/scienrds/scienceandnerds/wp-includes/functions.php on line 6114Source:https:\/\/techcrunch.com\/2023\/01\/12\/defi-startups-need-to-experiment-with-new-use-cases-and-build-solutions-investors-say\/<\/a><\/br> Although the crypto ecosystem has faced its fair share of bumps, venture capitalists are still bullish about the space and continue to look at decentralized finance (DeFi) as a promising opportunity.<\/p>\n TechCrunch surveyed six crypto-focused investors<\/a> about the road ahead for crypto adoption, their sentiment toward DeFi and how the focus in that subsector (by both investors and founders) is growing.<\/p>\n The total value locked (TVL) on DeFi protocols has fallen roughly 77% from all-time highs around $180 billion in December 2021 to about $41 billion on Wednesday, according to DeFiLlama data<\/a>. But that hasn\u2019t stopped founders, developers and investors from diving into the space.<\/p>\n \u201cWhile TVL as a metric certainly has its flaws, we think it\u2019s still a decent measure of activity in the sector,\u201d said Michael Anderson, co-founder of Framework Ventures. \u201cAs TVL increases, we also think it\u2019s possible that total market cap could follow.\u201d<\/p>\n Paul Veradittakit, general partner of Pantera, echoed that sentiment. \u201cNaturally, we expect that in the next five years, as DeFi matures and begins catering to (as well as capturing share from) its TradFi counterparts, the TVL metric could easily surpass the $500 billion mark.\u201d<\/p>\n Anywhere from 20% to 50% of crypto-related pitches today are DeFi-focused, five of the investors surveyed said. With all these DeFi startups launching and pitching to investors, it\u2019s hard to determine what it takes to stand out.<\/p>\n \u201cAs venture investors, we\u2019re looking to back innovators who are not afraid to experiment and create new products,\u201d Veradittakit said.<\/p>\n But DeFi\u2019s growth will depend on more than just rising use cases, according to Alex Marinier, founder and general partner at New Form Capital. \u201cIt will also be influenced by developments in infrastructure, regulation and financial innovation.\u201d<\/p>\n In general, DeFi primitives like automated market makers and lending protocols are \u201cestablished and crowded,\u201d said David Gan, founder and general partner of OP Crypto. \u201cFounders need to go back and think about the true use cases and pain points for non-crypto\/non-technical users, and then build solutions and user experiences.\u201d<\/p>\n Founders should highlight unique technology and clear advantages for a specific use case, Marinier said. \u201cToo many projects are simply positioning themselves as \u2018X protocol, but on Y chain,\u2019 without offering anything truly innovative or novel.\u201d<\/p>\n Investors are also interested in projects that strategize or connect to institutional players. As DeFi grows, so does the need for its products to realistically accommodate institutions, Anderson said.<\/p>\n Unfortunately, institutional players might be spooked by the market-changing events<\/a> in 2022, like LUNA\/Terra ecosystem exploding<\/a> in May and crypto exchange FTX collapsing<\/a> in November. So these investors are unlikely to return for a few years, Anderson said.<\/p>\n \u201cAs a result, we\u2019re focusing more on projects that are thinking about addressing new, more institutional users and markets,\u201d Anderson added.<\/p>\n Gan agreed: \u201cWe\u2019re investing in the building blocks for institutional adoption, projects that fill the gap in the completeness of DeFi and protocols geared toward non-crypto users.\u201d<\/p>\n<\/p><\/div>\n <\/br><\/br><\/br><\/p>\n
\nDeFi startups need to experiment with new use cases and build solutions, investors say<\/br>
\n2023-01-20 21:47:50<\/br><\/p>\n