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BTC For years, there have been questions about "Why are there no institutions involved in DeFi?" The answer has always been that the technology is not yet mature. Zircircuit co-founder Jan Gorzny said in a recent interview that the excuse is outdated. The infrastructure has been established and audited, and the debate now lies between anonymous DeFi and Bitcoin users and the institutional system seeking compliant and regulated products.
"Most technical obstacles have completely disappeared. I think privacy may be an obstacle that we haven't found good standards yet, but almost every other issue has been resolved." he said.
Technology is ready
If technology is ready, what remains is a conflict between DeFi's founding philosophy and a compliance system that the organization cannot legally operate. "I wouldn't lie and say it's easy or obvious, because the many anonymous parts of DeFi and instant composability do drive many virtuous cycles within the industry." "People like that," he said. Composability in DeFi allows any protocol to instantly access other protocols without permission, and authentication breaks that. Gorzny does not want to conduct purity testing on cryptocurrency participants and wants to make it available to as many people as possible. "If you're willing to give up some composability or some DeFi native primitives, you can still do a lot of really cool things on the chain." he said.
The tradeoffs that must be made in institutional building
He also believes that institutional participation is crucial to expanding the field. "If you want to make the cake bigger, I think you have to do some KYC (know your customer)." "You can't expect to overthrow most of the banking system without bringing in some banks and understanding what they want," Gorzny said. This prediction has been echoed by industry organizations. Prime broker LTP, which handled $1.2 trillion in trading volume last year, made the same call. Agencies will not touch unlicensed DeFi, but will accept licensed DeFi. Gorzny believes that this trade-off is easy for most users. "Just getting banking services that are inaccessible to their local jurisdiction is already a huge victory, and they are willing to do KYC for that." He said,"A lot of people who use cryptocurrencies, most of them are not bad people."
