DeFi can take inspiration from traditional finance to reduce risk, says former Morgan Stanley executive
Infinity Exchange CEO Kevin Lepsoe Says If DeFi Wants More Institutional Crypto Adoption, It Needs To Nail It First fixed income markets.
New
The decentralized finance (DeFi) ecosystem has scored yet another victory over traditional finance, often referred to as TradFi, with a former Morgan Stanley executive launching a DeFi protocol.
Kevin Lepsoe, the former head of structuring at Morgan Stanley, aims to deliver an institutional fixed income program that offers fixed and floating rates with his new Infinity Exchange project.
According to Lepsoe, his new project will allow DeFi traders to “implement arbitrage, draw liquidity from other protocols, and hedge their risk positions based on forward rates.”
The DeFi market is known for its volatility and, therefore, risk in digital asset trading. Trading with more options allows you to hedge risk and speculate over the full length of a maturity curve. With more investable asset options available to trade along said curve, users can more easily switch between risky and risk-free assets.
Lepsoe told Cointelegraph that the introduction of a crypto yield curve is important for the growth of DeFi trading as it reduces volatility.
"If there was a crypto yield curve, a more robust product suite around stablecoins, and a way to unify TradFi and DeFi rates, crypto volatility would be significantly lower."
This development sets the stage for traders and institutional investors to continue to flock to the space. According to a recent Bitstamp survey, institutional interest is still high. Eighty percent of institutional investors surveyed believe crypto will overtake traditional forms of investing in the next decade.
Related:
Infinity Exchange CEO Kevin Lepsoe Says If DeFi Wants More Institutional Crypto Adoption, It Needs To Nail It First fixed income markets.
New
The decentralized finance (DeFi) ecosystem has scored yet another victory over traditional finance, often referred to as TradFi, with a former Morgan Stanley executive launching a DeFi protocol.
Kevin Lepsoe, the former head of structuring at Morgan Stanley, aims to deliver an institutional fixed income program that offers fixed and floating rates with his new Infinity Exchange project.
According to Lepsoe, his new project will allow DeFi traders to “implement arbitrage, draw liquidity from other protocols, and hedge their risk positions based on forward rates.”
The DeFi market is known for its volatility and, therefore, risk in digital asset trading. Trading with more options allows you to hedge risk and speculate over the full length of a maturity curve. With more investable asset options available to trade along said curve, users can more easily switch between risky and risk-free assets.
Lepsoe told Cointelegraph that the introduction of a crypto yield curve is important for the growth of DeFi trading as it reduces volatility.
"If there was a crypto yield curve, a more robust product suite around stablecoins, and a way to unify TradFi and DeFi rates, crypto volatility would be significantly lower."
This development sets the stage for traders and institutional investors to continue to flock to the space. According to a recent Bitstamp survey, institutional interest is still high. Eighty percent of institutional investors surveyed believe crypto will overtake traditional forms of investing in the next decade.
Related:
What's Your Reaction?
