DeFi (Decentralized Finance) appears to be stepping out from the shadows of obscurity and announcing its presence with increasing authority on the financial scene. Self-custody, once viewed as a curveball option in asset management, is steadily finding its footing amidst enterprises and individuals alike. As major centralized finance bodies like FTX, Prime Trust, and Celsius see their influence dwindling, we notice the user base pivoting towards decentralized alternatives.
In this context, Velvet Capital surfaces as a promising prospect. Backed by Binance Labs, Velvet Capital offers a sublime infrastructure for digital asset management to be done entirely on-chain. Leveraging their technology, emerging fund managers face significantly minimized barriers to entry, enabling more people to create and manage on-chain funds and structured products with minimal effort.
However, the flip side of the coin begs consideration: as promising as it sounds, implementing digital asset management entirely on-chain can inadvertently expose users to security risks, considering the numerous cyber threats plaguing the digital space. The ideology that Velvet Capital banks on still has its skeptics and is far from being universally accepted.
A report from Statista brought to light the ascendant trajectory of DeFi adoption: the user base, which was less than a thousand individuals four years back in 2017, skyrocketed to over six million in January 2023. As the market for DeFi expands, Velvet Capital’s system expects to support asset managers, banks, fintech companies, and traders through its cross-chain DeFi asset management operating system, which incorporates renowned DeFi protocols like Chainlink, Safe, 0x, 1inch, and PancakeSwap.
Despite the leaps and bounds made by Velvet Capital, lingering skepticism about its modus operandi remains. The crypto sphere has seen many promising projects fail to translate promise into practical deployment; skeptics argue that Velvet Capital could tread that path.
To further its cause, Velvet Capital has joined the Cointelegraph Accelerator program. By partaking in this initiative, Velvet seeks to make digital asset management more accessible to all by providing DeFi solutions for asset managers. Nevertheless, critics observe that Velvet’s operations are at an embryonic stage, and a lot hinges on how its integration with the Accelerator program plays out.
In the quest to achieve genuine decentralization, Velvet Capital is planning to evolve into a decentralized autonomous organization (DAO) of its own accord. This proposed pivot has certainly ruffled some feathers in the industry, with critics arguing that actualizing such a vision with a community-managed protocol at the helm will be an arduous endeavor.
In conclusion, the road ahead for Velvet Capital is fraught with both golden opportunities and towering obstacles. However, its compelling vision and the vehemence with which it seeks to redefine DeFi asset management could prove instrumental in its endeavors, despite the doubts clouding its path.
Source: Cointelegraph
