Unveiling the DeFi Trends of Tomorrow | European Blockchain Convention 9

[Music] 3 2 1 [Music] go hello everyone and welcome to this super interesting panel because I don't know about you but I'm a lot into Def and I would love to know what the trends of Tomorrow are so I would like to start this panel with a round of introductions my name is Maria enva olmes and I'm the founder and CEO of echoland where we educate professionals and onboard them on web 3 projects through activation events such as online hackathons developer challenges and user challenges uh I would like to start here on my right with Monir uh do you want to uh introduce yourself please hi everyone my name is Monir I'm founder of Paras swap myself I have a technical background in software engineering barop is a decentralized middleware that allows customers like a metamask ledger to offer to their users trading capacities on chain actually and it's been already four years that P swap has been launched and we processed over for 53 billion in trading volume thank you you want to hey hello Maria hello everyone uh my name is Elan I'm a developer relation engineer at Corum um you want me to give a little background yeah a little background about K yeah so I'm I'm from the Caribbean I study in Montreal um I have a computer science degree engineering and uh yeah I've been with corium for um for since this years nice to meet you everyone hello everyone I'm Bruno Aras Martin I'm actually the CMO of PR numbers we are building the we are building the public BL blockchain of xdc and I've been in the space for already 5 years I've um as an investor and also I have a web three marketing company and now we are focus on building on the ex Network which is a layer one it's let's say a fork of ethereum we are ISO compliant we are in the trade Finance sector I'm very happy to talk to you guys and give some insights about defi today awesome hello everyone my name is Fabio varde uh my role is growth and partnership so I lead any user acquisition and network expansion efforts in corium and sologenic as well just to give you more context uh sologenic is our mother company it was built on the xrpl we were one of the first ones to actually build a DEX there so I think this topic is really interesting we are all about Defi and especially we're going to talk about programmability and customization and also bridging to traditional Finance which is quite exciting all right so I want to start with a little bit of my own experience when I started with defi it was super difficult for me you know all these difficult names difficult Technologies installing the wallet all this decentralized exchanges it was really hard for me to grasp and the technolog is getting even more complex with time right so for me usability is one problem that we can maybe speak about later but my first question would be what emerging Technologies or Innovations do you see as the most prom ising for shaping the future of defi Flavio I think this is a pivotal time to talk about Innovation especially during the bare market we've seen uh that the projects that Prevail are the projects that don't rely on trading under their speculation and they are offering products that are sustainable and have business models that are adaptable to the new um I would say standards that are coming up so I want to touch on two points one of them is the a trend that I'm seeing is tokenization fire blocks just spoke about it uh we really believe in tokenization as a way of unlocking uh new liquidating new markets and also bringing traditional Finance uh assets into the blockchain is definitely uh you know we've been we've seen reports this is a trillion dollar uh Market opportunity and I think this leaves me to a second point so when you're bridging these types of assets you need to have a level of compliance of course so in corium We Believe to give some control to institutions to be able to adopt dii into their already existing applications and in this this form of communication uh we've seen more advanced for example ISO 222 standardization which is basically making sure that uh this messaging is compliant from the protocol level so we're going to talk a little bit about smart tokens and I think uh maybe hell one can elaborate more on that yeah sure faio so when you think about it when you think about stoken isation one of the big things of course is tokens at Corum as faio said really think it's a we will put the asset first and smart tokens so Maria you you you spoke about Innovation and I think smart tokens is really one of them so what we did at Corum with smart token is that we took the token logic execution and we took it from the smart contract and put it into the protocol layers and that had uh uh it's a really like a powerful parading shift because thanks to this right now you have like faster transaction cheaper transaction as well and the transaction itself is more deterministic and this is I think uh one of the biggest Innovation that will bring more institution into the game and um and and yes I I I would like to add something if we talk about Innovation and you guys mentioned innovation in defi you talk about tokenization H me as a builder and also as an investor I'm when I think about tokenization I believe that uh tokenization of real world assets going to is going to be the the next narrative for example right now at XC and prime numbers we are developing a lending and boring platform that it's going to be connected to real world assets we are getting regulated to be able to do that and just think how big the Gap can be and how big how can we connect it because imagine that you have uh what ever a car you have a building you can tokenize it and the thing is that if we connect web 2 with web 3 the thing is that in web 2 is way harder to get uh to get funds it's way harder to sell things but if we we go to web 3 and do we toonize whatever we want in this in this platforms we can get capital from all over the world without even having to do a kyc so I think organization of reward assets it's going to be the next narrative probably in the next bull market and we are seeing um little by little more projects are really getting into the real world assets world so yeah I think that's going to be probably the next narrative and it's going to be a very important innovation thank you what is your opinion Monir yeah yeah following on On tokenization we already seen sorry my my lost my voice this few days um tokenization we already see uh evidence of real traction well first one that comes to mind is stable coins and for the last say 12 months the volumes in exchanges has dropped for over 60% but the market share of stable coins has grown actually and we can see also a lot of usage for stable coins like in parasoft we pay only in stable coins where our Engineers receive salaries in dollars euros pesel and whatever you name it oh it's a crypto to Fiat yes but uh we hold we held our treasury in stable coins only but also one thing interesting is maker Dow um they put part of their treasury in t bills and that that was one of the biggest largest use cases of real world assets through a DA that is completely not I would say held by a private entity so the da puts their treasury in t bills and they're earing 5% a year true for money that was sleeping uh before that that was that happened very interesting thank you um all right now a question for Bruno uh how can D5 projects address the challenge of scalability security and Regulatory Compliance in the coming years so Regulatory Compliance very interesting okay I think we can divide this question in the three different topics that that you just mentioned I think defa right now it's improving a lot but there there is a lot of lack of security because everyone can build in web 3 it's an open source uh platform it's an open source Network and it's like a jungle so if we go into security I think that every single D platform should have out audits which is very important because we always we've seen it through throughout the V Market that a lot of players they didn't even have Audits and they had tons of a lot of millions in total B Lo so this is something that we we need to work and and I think the connection would be uh regulations I think if every D5 project is regulated not I think this could be the opposite but Def and regulations I think they can work together if every D5 platform if every landing and Maring platform have licenses here in Europe or in the in the US or or in in Dubai whatever you want to get those licenses I think it's the way to have to be more secure and also it's the way to to to pass those regulations and talking about the scalability I think defi right now it's not as friendly as we want it to be in the future so I think building applications that for example have a Fiat or ramp Solutions imagine a linging platform or a DEX that you have a Fiat on ramp solution where you just put your email and you don't even have to you don't even need metam mask that's that's really going to get scalability and more users into the defi ecosystem system it's going to take some years we need to work on on on the platforms we need to work on doing it user friendly but I think those are the the things that I believe that will help uh get more users into the defi ecosystem can can I disagree on a point yeah sir I believe that defi protocol should be like neutral uh public goods that don't need to be compliant with any protocol but maybe users of those D5 protocols maybe they can have we can have some Nuance but I'm like a kind of a u yeah for a separation between the native protocol like say HTTP email like nobody regulates HTTP and email but State Nations can regulate how to know um how do we use those protocols that's my my opinion okay but if we want adoption and we don't want every project or every platform to be regulated like we cannot get people to regulate themselves when need we want real adoption we need those platforms to be secure right yes I agree maybe we can have standards uh for instance recently the French regulator published a paper on proposals for how defi protocols can be safer um we can agree and disagree on a lot of details or nuances that they provided but for instance something like kind of a certificate uh that can provide at least the tune in for end users who I think should be maybe institutions that can make the best judgment for whether this protocol is safe or not knowing that we can never be 100% sure for open source code that is not guaranteed by anyone and this happened also in Web 2.0 I would say like Java uh two years ago had a bug in its log and a lot of companies got hacked because of that and yeah there is you cannot regulate Java neither I guess yeah yeah I agree with you on that yeah if I may I think that so there is two thing here there is like regulation and framework as you say m but I think so if you for example you give a certificate to companies at the end of the day there is still like a bigger company or an institution that is going to issue those certificate so it's still what Bruno said right it's a it's a regulation but if you put like some Frameworks in the addition for example let's say heo 222 that is a super powerful tool that all of the company all of the blockchain company and like the traditional uh defi company can use to make sure that um all the transaction are um uh standardized right yeah so you introduce less vulnerability less bug uh upgradability is also better and um yeah I think this is a an inter interesting framework uh I think I wanted to steer away a bit the conversation on from regulatory standpoints more into the scalability point you mentioned which was the second one uh I think an important change that we've seen very fast in the industry is modularity and what I mean by that is for example it's not enough for now your wallet to just do transaction signing and sending and specifically defi protocols right now they are becoming more compatible with different wallets but the wallets itself are not just wallets anymore now they have a swap protocol integrated within they also are adding um token management token issuance tools into the wallets and I think for example Cosmos is doing this in its own way uh I think the cosmos kit is very modular in a way that you can easily integrate applications within applications uh and I think this is really interesting in general because we don't want to have a kind of like we we want to have an horizontal scalable industry where everyone has a purpose-built different Pro protocol but they can still interoperate and we don't need a a wallet for a specific chain H and I I still think that we are not there yet but we're we're seeing this as a trend what do you guys think yeah I think you're right and speaking of scalability so Bruno I'll take the same analog same structure as you so if you divide it in three pieces you have like the application layer the blockchain layer and the uh the user the end user whether it's an institution or like a a retailer I think that scalability is going to come I'm going to talk about what I know like the the second one so the blockchain we also need like to make sure that the blockchain the tool that we're going to use is scalable and as you said of that pass by being a chain that is uh interoperable that is fast that is secure and that have the right tools to to enable like this this scalability Monir do you want to add something to that no I cannot disagree so I already disagree so yeah yeah me too so guys because one part of the question was about regulatory topic and we moved out of of it a little bit but I think it's very important to talk about it so let me ask how to Envision the regulatory landscape evolving for Defi and what steps can the industry take to proactively engage The Regulators while persevering the the decentralized nature of defi um when year do want to start yeah I'm in for a separation between apps that are end user facing or I can be even institutional facing from the layers that are native to protocol like code that is open source that's running on the blockchain has to be completely neutral regardless of the jurisdiction or the regulator because simply it's something Global it's something that's supposed to serve a public purpose the analogy is email HTTP and and so on but I believe that it's very hard to imagine a world maybe in the future that's where it going to look like today where everything is not regulated and the the thing El that this is not custodial remove the responsibility from anyone but we are also in for a smart regulation that going to takes the nuances of this field that is very very different from traditional finance and fintech and we've seen more and more Regulators especially in Europe obviously uh and also in Asia in Southeast Asia getting this this nuance and understanding this nuance and trying to do baby steps in each rate in order to end up finding the best possible regulation that's still flexible and innovation in the space thank you do you guys have any thoughts about that I think on the on the front of Regulation we I think everyone in this panel works on the techn on the technology side of things so my Approach is always to encourage a a h hybrid model or just having the option for Enterprises or institutions that want to use this dii technology to be able to uh kyc their user so for example on solid enic that is buil on the xrpl and xrp recently was you know has a successful win and the SEC that's really positive for the whole industry and it just gives more accessibility to that asset but to my point um to for example trade stocks you definitely need to kyc and the perks that tokenization brings there is for example having your cryptocurrencies and your tokenizing stocks under the same custody under the same platform but for that you need to be kyc you need to be compliant and and there's there's perks to that there and I think that needs to be not enforced but like I said as an option and then the decentralized part like the Dex is still completely decentralized there's no um obligation for you to just interact with that other Branch so I think that's it has to be like that um as an option yeah and for example on XC we have a private network with we where we work with institutions on enterpris that want to move to web 3 we also ISO compliant and I think and I truly believe that if we want to have adoption we are going to have to sacrifice a little bit to of of decentralization to really get to really get those users into our networks and our ecosystem if I may I don't really think so like you don't need to lost some decentralization if you have the right tool if you have the right blockchain if you have the right um yeah the right tools on that platform to make make sure that because like as you said like kyc but this is done of chain right it's done by by some third party but then after that the question is how do you enforce this K on chain and for example I'm talking about cor because this is what I know but like if you look at smart tokens into smart tokens we have like what we call this wh list feature and this Whit list feature allow you like to allow to transact on a particular asset on those smart token only for a certain address and yeah I totally agree with you but sometimes Enterprises they require you to for example pass KC or to be regulated somehow so that's what I really meant but yeah I agree with you on that all right guys now let's talk about another Trend and this is the environment right this is super important it's in all of the media so in light of the environmental concerns and energy consumption what do you think the future a sustainable defi looks like um one do you want to start what what do you mean by sustainable just to understand the question well sustainable it means something that of course is cautious about the energy consumption the environment um you know setting up servers to work with yeah well I think uh you can see that as like Bitcoin in anything else and for Bitcoin where we can have this conversation but I think all most vast majority of other chains are move to proof of stake delegated proof of stake which I think is energy efficient still have also need to convince the bitcoiners or like had this debate with bitcoiners whether is it really energy inefficient or not they have some good argument actually uh but yeah I'm not like have the the skills or the right knowledge to to know maybe you guys have a better idea on on that yeah I think that so that sustainability is it's always like a really good question like as you said like from with Bitcoin proof of work right now like ethereum all of the cosmos chain there it's proof of stake so it's way less energy but you can think also about it in a different way for example let's say you buy a car if you switch car every year even if it's like the best car it's zero emission it's not really sustainable so if you talk about sustainability um of a product I think that's come like it's really where like interop interoperability and upgradability come from like if your product is able like to evolve during the year you're not going to need like a new product and as as I said new product is like a lot of uh energy yeah I mean I'm not a big guy into sustainability but I don't think that's a main problem in defi since it's proof of a stake so the energy cost is near zero but I think now I've seen new narratives building in Bitcoin I've seen nfts in Bitcoin so I think we should educate more people we all love Bitcoin it's just we as you said um we need to separate Bitcoin and and the rest because proof of work and proof of Stak is quite different so I think we just need to to educate people so instead of building on on bitcoin and and making things not sustainable since proof of work takes a lot of energy we can move them into in the defi ecosystem and it's going to be way more sustainable I think just to close up that whole um argument on sustainability I would like to mention uh for example projects that measure water consumption or energy consumption that are not web 3 native we're seeing them incorporate blockchain to keep track of their carbon offset reductions or or just to keep better track of how they're optimizing their pipeline to actually save more energy save more natural resources so I do see do see blockchain playing a positive role in that realm and I see I saw some hackathon actually participants building these systems where you could install um a device on a water I think it's a water clean a plant where you clean water and just measure how much you're doing it on the blockchain and then compare it to kind of like the goal there's an agenda a regulatory agenda of how much we should uh aim to reduce by 2025 and by that difference they can um get funding from the government and you know keep continue to do these initiatives that are ultimately good for the planet so I do think blockchain has a positive impact on that front as well I have a question for you m so at par swap for example how do you aboard sustainability in that sense like the energy level or what kind both of them um well you can maybe like in our side we look at the economical side for instance an aggregator we run a big infrastructure uh like hundreds of servers that are running in real time and a lot of ways you can address to optimize for instance we spent like two weeks um filtering out spams and we kind of divided the number of resources by two that are being used just because spams and those spams they don't like they're not like um hackers they just like try to get some insight and some data but they're like over overusing resources of ours and and other aggregators but that's like we're talking about going from I don't know 50k a month for in in AWS Bill to 25k um which translate into less infrastructure being used which translate into less electricity and so on so that's the only thing I can think about in in our particular case nice thank you guys so now that we're talking about the environment we also have to consider other things that belong to sustainability such as Financial inclusion right this is also part of the uh Global uh sustainability goals so um defi often targets Financial inclusion um how can defi the defi ecosystem ensure accessibility and affordability for underserved communities especially in uh developing countries okay so I can respond this one I like I really like this question so I think defa is the key for financing inclusion so we are all very lucky to be here today we are in Europe and I'm sure that all of you guys have bank accounts but if I bet most of you didn't know that 6% of the whole population is unbanked like they don't even have a bank account they don't even have a kyc so if we look at the merging markets like Africa more than 30% of the population in many countries there they have bank accounts thanks to defi because they just have a wallet and they get paid in crypto they are not kyc and they can use these wallets the centralized wallets without a kyc without they don't have Banks there so they use the centralized application they use wallets without the central to become and to be banked so I think that's that's huge and and thanks to the central uh protocols they can get paid in crypto they use crypto there all the time and also they can use uh defi applications to earn more money and to use those applications to land to borrow to swap so it's like uh an under economy that they have in these emerging markets that is really helping them so I think this is financial inclusion and and defa is really helping in those count that that need it the most just to add on to that I think I'm going to go a bit more abstract uh I think the first and foremost problem that defi solves is money if you take a look at for example I don't know what is the name of the in Spain but uh the Federal Reserve Bank and how they in the United States and how they print money if I ask you what par do they use to print money and they just post the report we don't know you know they they can do it deliberately on a blockchain protocol you can see how many tokens are issued and it's very transparent there's governance involved so I think money is the first thing that blockchain serves and the way this affects uh developing countries is that they have a new way to transact value not necessarily online I've seen even uh proof of concept device doing it on the phone uh and it it unlocks a whole new economy for them so I I definitely think um encouraging blockchain sorry encouraging defi adoption through education in these countries for example um in Latin America or Africa like you mentioned is something that we're all for it um and it's a challenge because it's it's hard to access this this um regions I would say from a technological standpoint but I think they are the ones that are going to Signal real Mass adoption when it comes sorry I would like to add something and it's like also thanks to defi we are giving power to the money that we have because we own that money but if you have the money in the bank you depend on the bank but you have your money in your Ledger for example in your treasure wallet thanks to defi applications and and defi infrastructure you your money you are the one that own that money no one can take it away from you so that that's something that it really helps in the ecosystem so I want to point out something that Favio said um the majority of my team is located in Nigeria I have about 10 people in Nigeria that are paid in stable coins and they prefer to be paid in stable coins and keep their money in stable coins um but something very important is the technology part so the people that work for me they have the money to buy a good phone they have the money to buy a laptop but there is a huge part of the population that does not have that they're brilliant developers but if their laptop is broken they don't really have the funds to buy a new one right so this dilemma is a big one right like how do they then get the funds to buy the appropriate technology to actually continue building to continue exploring Defi and adopting defi because they're actually really profiting out of D5 because this gives them a new access to the world and I think this is a challenge that um it would be great if someone can solve it we can solve it at Corum no but when when you look at it is that as you say like they really trust in the technology this is why like they put their asset on chain but at the end of the day like those coin on chain they need to be usable like for um uh goods for a laptop for food so the next step I think is like how do we make sure that those retailer at the end of the day they accept tokens exactly because the banking transaction fees are so high with centralized exchanges there exchanging cryptocurrencies to Native uh currencies is very high yeah absolutely yeah definitely so I think once again like the blockchain so they trust in the blockchain we trust in the blockchain we trust trust Defi and right now the next step is um more tokenization and more adoption and at the end of the day we're going to be able like to bridge uh the Gap that you just uh mention Mario perfect so as defi matures what role do you see traditional financial institutions playing in this ecosystem and how can they adapt or cor collaborate with the fire projects um yeah Helen can you repeat please yes so as defi matures um what role do you see traditional Financial Services institutions play in the space and how can they collaborate with with defi protocols with defi companies yeah I think I think they started already like we've seen we see more and more like institution where they are Bank central banks um experimenting with the blockchain and I think that it it's it's they already they start to play their part but um um it's also our goals as as the blockchain are the lay one to inspire them give them confidence into the the technology and so sorry to to repeat it but that that come from um security it have to be secure fast interruptable and uh but I think it's uh we're getting there I think it also has to do with the messaging that we have to all give as the web three in general has to be so solution driven so what I mean by that is uh for example there was a JP Morgan transaction that happened recently where they use crypto as collateral to do like a crossborder transaction so a lot of people are talking about that but sometimes when we talk about blockchain we talk about the technology specs right like how fast it is and we we talk about the sdks we have and like it's it serves a purpose for the developer adoption part but I think we need more blockchain protocols that are shifting their messaging to be more solution driven for institutions to see oh okay you're solving double taxation problems for example by having all digital assets on one platform or you have oh tokenization unlocks 247 trading that unlocks more liquid markets or more liquidity management tools so I think that's a very important role and that's something that we do have a bit of control in so that's why I I just wanted to add on to it what about ISO Fabio you think that can solve the do you think ISO is yeah it's it's all about communication right so they they need to trust um the information the data that is going through this blockchain channel so ISO is just the standard that will help being more compatible to what they are already used to use um and it's definitely important okay guys so I just want to ask each and one of you in 20 seconds how do you think we can drive more adoption into web 3 from web 2 users I'll be the first I'm going to be very quick I think it's all about ucation I think if we educate people about the benefits of Defi and blockchain they're really going to get interested because once when I first started learning in about web 3 and Bitcoin I was like what the heck is this why why didn't why didn't know about this before so I think that KS about education in schools in social media and and once little by little we educate people we are going to get more users I think that's the only solution just to compliment the that I I don't think it's just education I honestly think the web three aspect of the blockchain aspect should be transparent like they don't need to know they're interacting with a blockchain they they need to feel as if they're just logging into their Gmail account um and what I mean by that is just trying to it's not a ux UI problem but it's a problem that involves just thinking more uh about the user and how they actually convenience it's literally all about convenience so I think Education Plus uxui and then uh solution driven messaging like I mentioned is is a good combo for adoption thanks helan quickly 15 seconds yeah so I agree with both of you so I think it's the users the technology like it's been a pleasure to be here like the the hackaton for example like we've seen like some amazing project that just bridge that Gap like how like a normal user that don't really know about blockchain can leverage blockchain capacity amazing and yeah so yeah users Monir I would say I agree and yes abstraction of the complexity of the blockchain may be the key of the mass adoption I hope thank you everyone for participating in this panel and for thank you guys listening