The application of blockchain technology has proven to be truly boundless over time with the emergence of diverse projects and initiatives. However, decentralized finance (DeFi) looks to be one of the most established applications being powered by the cutting-edge technology.
Although DeFi has been around for a couple of years now, the industry has just recently boomed, with more investors showing interest, while taking advantage of the numerous opportunities that reside within.
Sadly, with surging interest in the space from developers and investors alike, comes more scrutiny from the regulatory bodies who are also paying more attention than ever before to the emerging finance space. So what does regulation mean for the DeFi economy?
In an exclusive interview with DailyCoin, Lennix Lai, director of OKEx shares his take on the effect of regulation in the Defi economy. But just before we get into that, you may want to also take a look at Lai’s opinion on the future outlook of cryptocurrency’s regulatory landscape here.
In case you are unfamiliar with it, OKEx is a decentralized exchange (DEX) with a variety of customized solutions for traders at every level.
The OKEx DEX platform, which is based in Seychelles, provides a variety of trading tools and services, including liquidity pooling, cloud services, yield farming, exchanging, and collateral-based borrowing.
Moving forward, DeFi, according to Lai, has developed to a stage where it has become one of, if not the most proven applications currently running on blockchain technology.
“The second phase in the applicability of blockchain technology is DeFi, which in itself is a very big concept that we are barely starting from a boring landing. Now, we can’t say, we have zero use cases in blockchain anymore. Because we got DeFi, and that’s proven because the total value locked (TVL) in DeFi protocols right now has surpassed the 200 billion mark. So it’s getting higher and higher. It’s already proven, and loved by global users,”
Despite the enormous investment in the emerging industry, the DeFi economy has had to face a tough regulatory battle, making the future look uncertain.
Notably, OKEx is one of the more prominent projects to have graced the DeFi economy in recent times, and so is definitely not exempted from the potential impact of the ongoing regulatory efforts by various governments globally.
While some countries, although yet to fully regulate their crypto spaces, are receptive towards the crypto economy, the majority are neither for nor against it. In other cases, a handful of nations have imposed bans on any corporate activity relating to cryptocurrency, or the DeFi economy at large.