According to a Fireblocks executive, there’s been increasing curiosity among institutional investors regarding decentralized finance (DeFi), yet they are hesitant due to the risks associated with on-chain transactions. To alleviate these apprehensions, Fireblocks is planning to roll out new platform features.
Institutional investors dealing with Decentralized Finance (DeFi) transactions face substantial risks, according to Shahar Madar, Vice President of Security and Trust at Fireblocks. Due to their large fund management, these investors carry greater financial weight compared to individual traders.
“The risks of unknown and unpredictable DeFi engagements is something they have to consider within their risk portfolio, which is what essentially holds them back.”
In the initial quarter of 2024, the value of institutional Defi trading on Fireblocks increased by 75%, amounting to approximately $4.5 billion, despite the existing risks.
According to DefiLlama, the decentralized finance (DeFi) sector boasts a staggering $95 billion in total value, piquing the interest of skilled hackers as mentioned by Madar.
Approximately $336.3 million in cryptocurrency was taken through hacks and scams during the first quarter, representing a decrease from the $437.5 million stolen during the same period in the previous year.
Fireblocks introduced two new features to its institutional DeFi offering: “Transaction Preview,” enabling users to view the impact of a smart contract on their wallet prior to signing, and “DApp Safety Check,” which scans contracts for potential threats and notifies users of “questionable smart contracts.”
To draw institutions into DeFi, Madar emphasized the necessity of focusing on security, designing intuitive user experiences, and implementing robust risk management systems. This approach, according to him, has the potential to shift perspectives on DeFi and the sector as a whole.
Institutions are increasingly attracted to the process of securing ownership over real-world assets through methods like staking, re-staking, and tokenization, according to Madar.
Users of Fireblocks are actively engaging in various DeFi (Decentralized Finance) activities such as exchanging, lending, earning interest, and transferring assets between different blockchain networks on platforms like Uniswap, Aave, Curve, 1inch, and Jupiter.
At the same time, conventional financiers are drawn to the tokenization of tangible assets and the utilization of Decentralized Finance (DeFi) framework to create a more secure financial system, eliminating potential risks from intermediary parties.
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2024-04-24 16:14