ConsenSys – the Ethereum based blockchain company announced on April 13 that they have secured funding of $65M from leading companies like J.P. Morgan, Mastercard, UBS, Protocol Labs, The Maker Foundation, Fenbushi, Greater Bay Area Homeland Development Fund, The LAO plus more. This is meant to fund efforts to build a bridge between traditional finance and it’s decentralized counterpart – the famed DeFi.
The enterprise blockchain infrastructure will be developed with this round of funding. It’s also unique in the sense that some companies utilized USDC and DAI stablecoins for funding – signalling a new era for digital dollar equivalents. The Decentralized Finance (DeFi) infrastructure and projects, predominantly found on Ethereum have seen explosive growth over the past year.
DeFi has a current market capitalization of $129B and has considerable room to grow, seeing how the total crypto market capitalization has now crossed $2.3T. ConsenSys latest funding round is likely to enhance the quality of DeFi infrastructure, build bridges with the traditional finance and allow for mainstream adoption of this new paradigm.
After the DeFi summer of ’20, this is the next major news to hit up decentralized finance. It shows that the mainstream companies are changing their stance and becoming interested in this ground breaking new playing ground. This is understandable because it offers considerable advantages over the legacy system. ConsenSys latest funding round might be the catalyst of another prolonged DeFi summer, this year.
About Decentralized Finance (DeFi)
An alternative to the traditional finance, Decentralized Finance is an emerging blockchain based field, based on the central idea of providing financial services without the presence of third party or intermediaries. Instead, the self-executing complex logic smart contracts are used, which operate without any intervention.
It’s an attempt to go “bankless” – meaning developing the ability and means to override the current financial institutions and banks for a more free inclusive and less restricted system. DeFi Crypto Coins are tokens related to DeFi protocols, deriving their value from them.
The characteristics of DeFi protocols are trustlessness, resistance to censorship, decentralization, ability to verify on-chain, low barriers of entry, decentralization, unhindered transaction execution and interconnectivity- the so called lego-like composability. Unlike traditional finance, DeFi is accessible to anyone with an internet connection and a basic computer or smartphone.
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