Institutional Investors Flocking to DeFi

Currently, institutions are pouring nearly 58 million dollars a week into Bitcoin. Ethereum is seeing nearly $10M/USD in trades, weekly. With recent headlines screaming adoption, this trend is only likely to accelerate. Bitcoin has been likened to gold and, however objectionable it may be to gold bugs, the analogy is good enough. Bitcoin is used primarily as a store of value, a hedge against forecasted fiat fluctuations. Bitcoin exists, but it is not especially extensible.

Bitcoin is the current de facto reserve because it has brand recognition, but it is not a full-fledged ecosystem for decentralized finance (DeFi), or even, like Ethereum, a platform to develop DeFi solutions. DeFi applications, like exchanges or lending services, can be built with Ethereum. However, issues with speed, transactions fees and scalability persist. Constellation Network is a Distributed Ledger Technology built to securely validate and protect data, including complex data.

Partly because it is rooted in this robust infrastructure, Lattice, a decentralized exchange (DEX), has had several large backers jump on board this month. GDA (Global Digital Assets), Hillrise Capital, and Moonrock Capital have joined Alphabit Fund and FBG Capital. This is part of a larger trend, an exploding fascination with decentralized financial solutions — including imperfect ones. Uniswap, a DEX running on Ethereum, recently saw its monthly trading volume overtake Coinbase’s.

As we’ve stated in several articles, Constellation’s technical foundation gives Lattice an undeniable edge over its competitors including, but not limited to: zero fees, lightning fast transactions, deep liquidity pools, numerous automated market maker algorithms, and scalability. In other words, what is built on Constellation Network can grow without becoming slow or costly. The 2017 CryptoKitties debacle, where traders were spending thousands of dollars to execute a single transaction, is a sobering reminder of what happens when a fragile system encounters a black swan event.

The options offered by DeFi encompass and surpass everything offered by traditional finance. Smart contracts, a feature introduced by Ethereum, have not been fully realized. Yet the promise of this feature, more a proof of concept or a functioning prototype than a commercial grade product, has been enough to attract nearly 50 billion dollars in investment (and tens of billions more in the various tokens running on Ethereum’s blockchain).

Right now the entire crypto market is between 380 and 560 billion USD. All the stock exchanges in the world add up to about 70 trillion. The daily volume of the global currency market is 5.1 trillion. Crypto in general, and DeFi in particular, have immense potential. While Bitcoin and Litecoin may continue to be reliable stores of value, more dynamic and perhaps profitable opportunities are on the horizon for the next generation of DeFi.

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Lattice is a DeFi application built with Ethereum and Constellation’s Hypergraph Transfer Protocol (HGTP). Empowering users using advanced AMM algorithms.

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Authored by Adam Alonzi

Adam is a writer, biotechnologist, documentary maker, futurist, inventor, programmer, and author of two novels. He is a Marketing Director for Lattice Exchange, Head of New Media for BioViva Sciences, interdisciplinary analyst for EthicsNet, a reviewer for the Millennium Project.

References

https://constellationnetwork.io/

https://www.prnewswire.com/news-releases/lattice-exchange-adds-more-backers-to-its-growing-list-institutions-looking-to-dive-into-defi-301158255.html

https://www.newsbtc.com/news/bitcoin/institutions-pouring-millions-bitcoin/

Lattice is a DeFi application built with Ethereum and Constellation’s Hypergraph Transfer Protocol (HGTP). Empowering users with advanced AMM algorithms.