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Thursday, July 2, 2020

DeFi blockchain ecosystem advancing on FIs

The DeFi Money Market (DMM) ecosystem, a global community and movement focused on blockchain technology, believes future commerce will be bankless. Financial analysts see DMM's growing popularity as further proof that consumers are losing trust in financial institutions (FIs), particularly during COVID-19.

"It's exciting to see the plethora of new practical solutions already being built on top of DMM's protocol," said Josef Holm, founding partner of Draper Goren Holm, a blockchain-focused venture studio. "We're specifically looking for the movers and shakers who will leverage our entire arsenal of portfolio companies and their technologies to create the blockchain products and services of tomorrow."

Alon Goren, founding partner of Draper Goren Holm, concurred, stating, "The future of blockchain are the companies living in your wallet that are powering the future of what you call a bank." Goren added that cryptocurrencies tend to be more stable than government-backed money, which has rapidly inflated during the pandemic.

Physically backed digital assets

In February 2020, the DeFi Money Market Foundation made a case for replacing traditional financial service models with blockchain in a whitepaper titled, Earn Interest on Digital Assets Backed By Real-World Assets Represented On-Chain.

"The DMM Ecosystem (DMME) is building a vibrant global community to provide a decentralized, transparent and permissionless environment to empower all citizens to again earn interest on their currency backed by real-world assets represented on-chain," the authors wrote. "The DMME is an Ethereum-based and decentralized protocol that allows the creation of DeFi Money Market Account's (DMMA) - a new DeFi native asset class that allows any holder of an Ethereum-based digital asset to earn interest and is backed by real-world assets represented on-chain. The DMME protocol operates in a simple and transparent manner, so anyone can readily understand it as well as verify the veracity of the on-chain assets and collateral."

Goren described the DMM Protocol as a bridge between Ethereum digital assets and real-world assets, which facilitates interest-bearing accounts that are completely on-chain. DMM DAO, the governance arm of the protocol, leverages blockchain and real-world assets to provide stable 6.25 percent interest income to account holders, he added.

Unbundling banks

Goren mentioned that Draper Goren Holm was an early backer of DMM and has been helping fintech startups bring DMME-based solutions to market. The firm has invested in a variety of seed-stage companies, including Totle, Ownera, Innovesta, LunarCrush, Degens, Giftz, Vertalo, Coinsquad, CasperLabs and Element Zero, he stated.

While acknowledging that the blockchain ecosystem is in an extremely early stage, Goren said the company is committed to building a robust ecosystem, with multiple layers, back-ends and use cases. Applications span an array of vertical industries, he noted, including decentralized finance, consumer lending, banking, insurance, credit and payments exchanges.

Goren further noted that DeFi's ultimate aim is to unbundle the bank, which will require a stable, professional backbone. DMM brings that stability to blockchain while enabling a suite of products to be built on top of its protocol, he added. end of article

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