Neeraj Khandelwal, Co-Founder, CoinDCX, is in conversation with Aabha Bakaya, Senior Editor & Anchor, of Business Today TV, as they discuss DeFi and CeFi.
Aabha Bakaya and Neeraj Khandelwal deep dive into the topic of DeFi and CeFi. CeFi ( Centralized Finance) is a company responsible for running all the financial operations like NSE ( National Stock Exchange) or any bank. It is a world where the whole financial management is centralised within one company.
In 2017, a new term called Defi, also known as Decentralization Finance, was coined. Here, centralised players like banks or stock exchange functions are removed and put on the blockchain, which essentially runs those functions.
Going a step further, the challenges faced in accessing DeFi and the opportunities and benefits it can present for users is discussed. The decentralised financial ecosystem runs on the blockchain. The observation was made in 3 years where it grew from 100 million Dollars worth of logged assets to 270 billion Dollars. But when the bull run went down, the market crashed, and currently, 70 billion dollars of value is logged in decentralised finance. Also, daily trading volume in the decentralised finance world stands between 5 to 10 billion Dollars.
One of the challenges for DeFi is customer adoption. It is because retail customers are technically challenged, but some institutions have adopted DeFi and understand the benefit of it with the help of teams and their capabilities. In the global context of the crypto world, the retail customer base is 300 million; out of this 20 million exist in the decentralised finance world.
The Indian global peers and their stand on the rank, progression & adaptation of DeFi as well as the challenges they can face can be understood in terms of the regulatory challenges faced in the last four to five years. Still, stats provided by websites and apps say that India has the primary market for DeFi crypto apps, and it ranks under the top three countries worldwide in terms of customer adaptation. This is because of the digital native population India has. Different apps like metamask wallet, trust wallet or coin-based wallets give access to decentralised finance. If they have 10 million active users, 4 million are from India. Despite having challenges, India has been a massive adopter of this space, and this is because of the software engineers.
CoinDCX plays a major role in making the opportunities accessible for users in the Indian ecosystem. At the time of launch 2018, CoinDCX was a simple buy-sell exchange of bitcoin and other top cryptos. Web3 wasn't introduced back then, so they worked on multiple other fronts.
First, they started exposing users to buying and selling crypto and making users understand the
technicalities and features. Second, they focused on educating customers and policymakers about crypto and blockchain.
They also launched CoinDCX ventures, where they helped other entrepreneurs and start-up companies in financing and networking. Subsequently they founded Okto, a product line that only focuses on decentralised finance, NFTs and Web3. The main objective of Okto is to simplify access to decentralised finance.
To summarise, DeFi and India's potential to lead the Web3 revolution in the crypto world is immense. Decentralised finance helps to bring the centralised finance cost down as it is expensive and would bring far more efficiencies in this ecosystem.