The decentralised finance (DeFi) ecosystem has to address certain issues before it can gain massive adoption.
The CEO of TideFi, Daniel Elsawey, told NASDAQ in a recent interview that he believes certain issues have to be fixed before the DeFi sector achieves massive adoption.
sector has been growing massively over the past few years. DeFi enables people to gain access to financial services without the hurdles usually accompanied by traditional financial institutions.
When asked what needs to be done to achieve massive DeFi adoption, Elsawey said;
“DeFi is still in its infancy. Currently, you have multiple blockchains offering some sort of DeFi product, but, in my opinion, there have been three major barriers to mass adoption: decentralized know-your-customer (KYC) compliance practices, regulation, and real-world use cases.
To me, DeFi is not the same as being completely anonymous. DeFi is about taking ownership and financial empowerment. Decentralized KYC means a company never stores user data, and there is no potential for a data breach that we have seen in traditional companies. An identification that the user has gone through a form of KYC and is verified will help further integrate into our day-to-day financial system.”
The TideFi CEO added that regulation is a key aspect of centralised finance, and if DeFi seeks to become mainstream, it will need to find a way to evolve and adapt to work together with regulation to be successful. He added that;
“DeFi for the average user is not so accessible; it needs to become a seamless interaction with normal user products. I liken it to Apple or Google Pay; when using those products, most users are unaware of the underlying tech, but it serves two purposes: easy to use and secure. DeFi needs to head down the same path.”
Elsawey added that traditional finance is not going away, and DeFi is here to stay. However, he suggested that DeFi needs to offer new products in a safe and secure manner that can be easily accessed by traditional finance rather than attempting to take over the financial market.
