In the past few years, institutional investors and established companies like Visa have started to show interest in blockchain and digital asset technology.
What’s more, the current and rapidly rising value of the Ethereum decentralized finance (DeFi) ecosystem gives just a hint of what’s to come. Between centralized finance (CeFi) and DeFi choices, DeFi provides advantages that can’t be ignored.
Although it hasn’t been fully evaluated by the market, the low level of intermediaries taking fees from transactions stands to be a major benefit of DeFi over CeFi to institutional investors.
While this is a major boon of DeFi for both individual and institutional investors alike, it is especially advantageous for the latter because gas fees that can get ridiculously high for even small DeFi transactions don’t get any higher for substantially large transactions — the kind of transactions institutions make. Moreover, another point in DeFi’s favor is how DeFi platforms provide needed liquidity through practices such as yield farming.
Risk and Reward, Now and Later
The advantages of DeFi to institutions are evident. So are institutional investors buying Ethereum? The numbers definitely say “yes”, with $13.9 billion of the Ethereum pie held by such investors altogether, including $30 million in the last week of April alone. The promise of Ethereum EFTs and even institutional investment in NFTs, which exist only through DeFi in Ethereum-based networks, underscores the inevitability of DeFi’s strong relationship with institutional investors.
DeFi is still new, and it isn’t without risk. Some of the qualities of cryptocurrency and DeFi, such as the relatively higher interest earnable through yield farming, may be temporary. But with more risk comes more reward.
The outlook for continued institutional investment in DeFi looks promisng, but the ground floor is quickly being filled to capacity by those that have gotten there first, and missing out on innovations can undoubtedly be a sore spot for institutional investors. Right now there is only a trickle of institutional investment in cryptocurrency, so there’s still enough time to get in on it before the surge.
Secure Your Assets with AIKON
Although some cite security as a risk for institutional investors expanding into DeFi, one thing is sure: AIKON, specifically, stands out in its commitment to secure authentication. AIKON’s ORE Vault provides multiple-signature signoff, known as multisig, with the wallets AIKON’s network secures.
ORE Vault’s multisig feature reduces risks associated with conventional single-party signoff, such as losing authentication keys, falling victim to phishing attacks or transferring funds out of a company account accidentally or inappropriately.
Moreover, the security ORE Vault provides is built on the most innovative DeFi platform out there. ORE Network, or Open Rights Exchange Network, provides the functionality that institutional investment in cryptocurrency demands — a single network that allows users to sign on to multiple blockchains with a single email address, SMS, or social login.
AIKON’s signature offering, ORE ID, provides superior authentication through an API, protocol, and software that’s GDPR- and CCPA-compliant, open-source, and available to anyone.
While DeFi certainly provides promise for institutional investors, AIKON’s ORE offerings are a promise already fulfilled.
About AIKON
Blockchain and crypto are technologically complex. AIKON makes it simple. We’ve built a suite of intuitive products built on the ORE Network for enterprise companies looking to provide a seamless user experience that works cross-chain with Algorand, Ethereum, EOS and more.