For many crypto believers out there, decentralized finance (DeFi) is the clear next step of the financial revolution.
It’s already likely that 2021 will be seen as the year when crypto was finally recognized as something more significant than a passing fad among nerds and frauds.
It’s now a major global industry, and many industry experts see DeFi technologies and DeFi apps as another major benchmark for developing financial tools without banks or bankers.
The recent acquisition of DeFi Yield Technologies by Dispersion Holdings shows that investors have become just as willing to throw their money behind DeFi startups as cryptocurrency or its many growing platforms.
Dispersion, an incubator specialising in DeFi, announced the proposed acquisition of the entire share capital not already owned by Dispersion of Defi Yield Technologies Inc., a platform for investment into decentralised financial services.
The acquisition follows two rounds of investments by Dispersion totalling CAD$1 million for a 6.1 percent interest. According to the press release, the deal is the second major acquisition by Dispersion in the cryptocurrency yield farming sector and will complement the proposed purchase of Accru Finance Ltd, a platform which enables cryptocurrency traders to access high yields being generated from lending out digital assets worldwide.
DeFi Yield Technologies (DFTI) will use its proprietary DeFi yield engine and trading strategies to build a suite of automated, diverse and easy-to-use DeFi products including staking, the act of locking cryptocurrencies to receive rewards, and yield farming, where crypto assets are put to work with the intention of generating the highest returns possible, the press release said.
DFTI has also created an easy-to-use suite of automated, diversified and optimised yield-generating products administered through partner platform Valet.fi. By using diverse DeFi protocols and strategies to increase diversification, their solution aims to maximize yield while minimizing exposure to risk.
The company has received lots of attention from investors this year.
When ThreeD Capital first invested $400,000 in DeFi Yield Technologies back in July 2021, the decision was based on the company’s promising vision of a new kind of DeFi technology, said ThreeD Capital’s Chairman and CEO Sheldon Inwentash.
“Investing in decentralized finance can be complicated and it is easy to lose money if you do not know what you are doing. This makes it extremely difficult for DeFi to make it into the mainstream. DeFi Yield Technologies is reinventing financial services by building financial applications that allow anyone to invest and earn a return without having to understand all the different protocols and strategies,” said Sheldon Inwentash.
DFTI is also developing a mobile yield application with features that let its users deposit funds directly from bank accounts. It aims to generate fees by charging a percentage of assets staked through its applications for its asset allocation services.
In its press release, Dispersion said there is significant demand from market players to access and deposit cryptocurrency, with significant revenue to be generated through interest yields as well as lending and automated market making.
It seems clear that the DeFi industry in general, and new apps built on the technology, will be a hot market in 2022.
That’s what Meltem Demirors, CoinShares chief strategy officer, recently told CNBC. Demirors predicted that DeFi apps will keep replicating financial structures that “we already know and love in the traditional finance world,” like high-yield savings accounts.
She also said that there would be new DeFi services built that don’t look like anything that currently exists.
“We really, truly are in the era of the financialization of everything,” Demirors said.