DeFi, or decentralized finance, is a fast-growing sector of the cryptocurrency industry that aims to provide financial services without intermediaries. DeFi platforms allow users to lend, borrow, trade, and invest in various crypto assets, as well as access innovative products such as yield farming, liquidity mining, and synthetic assets.
However, DeFi is not without its challenges. Some of the barriers that prevent wider adoption of DeFi include:
- Complexity: DeFi platforms often have steep learning curves and require users to interact with multiple protocols, smart contracts, and wallets. Users also need to understand the risks and trade-offs involved in DeFi, such as gas fees, slippage, impermanent loss, and security vulnerabilities.
- Accessibility: DeFi platforms are mostly built on Ethereum, which suffers from network congestion and high transaction costs. This limits the scalability and usability of DeFi for many potential users, especially those with smaller capital or in developing regions. Moreover, DeFi platforms are not interoperable with other blockchains, which restricts the diversity and liquidity of the DeFi ecosystem.
- Regulation: DeFi platforms operate in a largely unregulated and permissionless environment, which poses legal and compliance challenges for both users and developers. DeFi platforms may face regulatory scrutiny or bans from authorities, as well as potential lawsuits or disputes from users. Users also need to be aware of the tax implications and reporting requirements of their DeFi activities.
To address these barriers, Velvet Capital, a DeFi asset management operating system backed by Binance Labs, is offering a solution that simplifies and democratizes DeFi for everyone. In an exclusive interview with Cointelegraph, the co-founders of Velvet Capital, Alex Lee and James Lee, shared their vision and insights on how Velvet Capital is transforming the DeFi landscape.
What is Velvet Capital and what does it offer?
Velvet Capital is a cross-chain DeFi asset management operating system that enables anyone to create, manage, and launch on-chain funds and structured products with minimal effort. Velvet Capital is integrated with major DeFi protocols, such as Chainlink, Safe, 0x, 1inch, and PancakeSwap, allowing users to trade on-chain and leverage its DeFi-as-a-Service offerings.
Velvet Capital has three main features:
- Fund creation and management: Users can create their own tokenized funds or join existing ones, and manage their portfolios across different blockchains and ecosystems. Users can also access smart routing and yield farming integrations to increase the capital efficiency of their funds.
- Structured products: Users can create and launch their own structured products, such as options, futures, swaps, and synthetics, or participate in existing ones. Users can also customize their risk-reward profiles and exposure to various crypto assets and strategies.
- White-label client portal: Institutional funds and asset managers can access their portfolio data in real-time with Velvet Capital’s white-label client portal. They can also provide their clients with a branded and user-friendly interface to monitor and interact with their funds and products.
What are the benefits of using Velvet Capital?
Velvet Capital offers several benefits for both individual and institutional users, such as:
- Simplicity: Velvet Capital simplifies the DeFi experience by providing a one-stop platform for creating and managing on-chain funds and products. Users do not need to deal with multiple protocols, wallets, or interfaces, and can focus on their investment goals and strategies.
- Diversity: Velvet Capital supports cross-chain operations, allowing users to access a wide range of crypto assets and ecosystems. Users can diversify their portfolios and optimize their returns by leveraging the best opportunities and innovations in DeFi.
- Security: Velvet Capital employs rigorous security measures, such as smart contract audits, multi-signature wallets, and insurance coverage, to ensure the safety and integrity of its platform and users’ funds. Users can also benefit from the transparency and immutability of blockchain technology, which eliminates the need for intermediaries or custodians.
- Community: Velvet Capital fosters a vibrant and collaborative community of DeFi enthusiasts, experts, and innovators. Users can discover and learn from the best practices and insights of other users, as well as contribute to the development and governance of the platform.
What are the challenges and opportunities for DeFi adoption?
According to the co-founders, DeFi adoption is still in its early stages, and there is a lot of room for growth and improvement. They believe that some of the challenges and opportunities for DeFi adoption are:
- Education: DeFi is a complex and dynamic field that requires constant learning and adaptation. Users need to educate themselves on the fundamentals and nuances of DeFi, as well as the risks and rewards involved. Velvet Capital aims to provide users with educational resources and tools to help them navigate and master DeFi.
- Innovation: DeFi is a rapidly evolving and competitive space that demands innovation and differentiation. Users need to keep up with the latest trends and developments in DeFi, as well as the emerging needs and preferences of the market. Velvet Capital strives to provide users with innovative and cutting-edge solutions that cater to their diverse and changing needs.
- Regulation: DeFi is a disruptive and revolutionary force that challenges the status quo and norms of the traditional financial system. Users need to be aware of the regulatory and legal implications of their DeFi activities, as well as the potential impact of regulatory changes and interventions. Velvet Capital seeks to comply with the relevant regulations and standards, as well as to engage with the regulators and policymakers to promote the adoption and acceptance of DeFi.
What are the future plans and goals of Velvet Capital?
The co-founders revealed that Velvet Capital has ambitious plans and goals for the future, such as:
- Expansion: Velvet Capital plans to expand its platform and services to more blockchains and ecosystems, such as Solana, Polygon, and Avalanche, as well as to more regions and markets, such as Asia, Europe, and Latin America.
- Integration: Velvet Capital plans to integrate its platform and services with more DeFi protocols and partners, such as Uniswap, Aave, and Compound, as well as with more centralized platforms and exchanges, such as Binance, Coinbase, and FTX.
- Decentralization: Velvet Capital plans to decentralize its platform and governance by launching a native token and a decentralized autonomous organization (DAO). Users who hold the token will be able to participate in the decision-making and direction of the platform, as well as to benefit from the value creation and distribution of the platform.
Velvet Capital is a DeFi asset management operating system that aims to break down the barriers to DeFi adoption and empower everyone to access and benefit from the opportunities and innovations in DeFi. By providing a simple, diverse, secure, and community-driven platform, Velvet Capital is paving the way for the future of DeFi.