MSV Podcast

Roundtable: "Defi - Navigating the Future of Finance"

August 11, 2023 Morningstar Ventures Season 2 Episode 11
MSV Podcast
Roundtable: "Defi - Navigating the Future of Finance"
Show Notes


Three Key Takeaways from Our Guests:

1. There is still a lack of tooling in the DeFi space.

We kicked off the spaces by asking our guests about the state of DeFi in the industry. The guests shared that the user experience offered by DeFi apps still needs improvement, which many projects are trying to improve daily. Another trend that the speakers have been seeing is that liquidity has been sparse in decentralized exchange ever since the FTX scandal. Furthermore, DeFi did see a surge in use after the FTX scandal. However, that has subsided almost 1 year after the event, and we see more people returning to centralized exchanges as if nothing ever happened. Finally, the lack of tooling in the DeFi space is another hurdle to overcome, and once that happens, we will see more DeFi adoption from institutions. 

2. Projects need to react to a fast-changing regulatory environment.

When asked about regulation, our guests agreed it could impact the crypto industry in two ways – at the project level and user acquisition and retention level. One way regulators can essentially “choke” DeFi is by restricting the onramp and offramp processes, which would hinder the transition from fiat to crypto. If this were to happen, then there might not be any real-world value to the assets classifying them as computer money. 
Projects must react to regulation, and our guests say this could happen in two ways. However, there might also be other people in the DeFi space who view regulation as an opportunity, as it can bring legitimacy, consumer protection, and more visibility to their projects. 

3. AI can potentially enhance the user experience of DeFi protocols.

At the end of the session, an audience member asked our guests about the integration of AI in DeFi. All guests agree that AI has the potential to enhance user experience and hopefully make it easier for users to understand how some of these rather “complicated” protocols and products work. AI agents could help with trades and offer educational content on storing crypto, trading, and using various functions properly.