Decentralized Finance: Innovation and Opportunities

The buzzwords are everywhere — cryptocurrencies, blockchain, decentralized finance.  But what do they all mean and what role can they play in your financial future? On this episode of The Yield, Yieldstreet’s Director of Product Marketing, Peter Kerr, CFA, and Head of Institutional Business at Aave, Ajit Tripathi, CFA discuss the push towards decentralized finance. Ajit leads institutional growth, strategy, and partnerships at Aave to enable institutions to participate in decentralized finance, and in their conversation he breaks down the key players in decentralized finance, highlighting the key details and differences between Bitcoin, Etherium, blockchain technologies, and more.

Key Takeaways:

[1:37] Ajit details his transition into the world of Fintech and cryptocurrencies.

[6:12] Defining crypto, blockchain, and decentralized finance.

[12:18] The difference between Bitcoin, Etherium, and other coins. 

[15:05] What might coins, blockchain, and decentralized finance look like in 10 years?

[19:54] How to include crypto products in your investment portfolio.

[21:47] The mission at Aave starts with creating a more effective market for liquidity.

[24:13] A breakdown of crypto-lending, stable coins, and smart contracts.

[28:33] Breaking technologies in the FinTech world.

[32:20] Resolving the friction between regulatory entities and these evolving concepts.

[36:52] “Get your hands dirty and have fun.”

Their conversation starts with Bitcoin. The genius of Bitcoin is that it cannot be copied. Unlike an email that you can copy and resend as many times as you would like, Bitcoin is one of a kind. Its uniqueness protects it and makes it impossible to recreate. Underneath Bitcoin technology is blockchain technology. Blockchain is not controlled by any particular company or individual, and it can be accessed by anyone. And one step beyond that we find decentralized finance. Decentralized finance takes the complexities of tokens and applies them to more complex financial applications in a completely permissionless, decentralized environment. And this new, free way of building systems that can be used by anyone is, according to Ajit, a revolutionary idea and the very reason that decentralized finance is so big right now.

Many people view Bitcoin as data technology and Etherium as the blockchain of the future, but Ajit explains why he thinks that understanding is not quite right and what investors need to know about each different coin.  He also takes a look into his crystal ball to forecast which coins might be the leaders in the next 10 years. From increased interactions with plugins and optimized blockchains for a variety of users, with the rapid pace of innovation, it just might be that anything is possible in the future of decentralized finance.

For anyone who has ever wondered what it might have been like to invest in the Internet when it was first coming into the world or Google at the height of the dot com era, Ajit likes the opportunities to invest in these early days of cryptocurrencies.

Crypto-lending and stable coins are continuing to emerge onto the finance scene but are still relatively widely unknown. Ajit breaks down the most popular stable coins, the underlying technologies they use and the process of making deposits and investments with these decentralized coins. 

And to wrap up this informative conversation, Ajit offers a look into some of the breaking technologies that are emerging in the FinTech world. It’s the next level of the Internet, and with increased excitement and involvement from users, companies, and even governments, it’s clear that decentralized finance opportunities are here to stay with possibilities that are seemingly endless.

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