Ever since President Donald Trump’s administration signalized favorable crypto regulations, banks, financial institutions and large fintech companies have been looking to bring funds to the chain and offer seamless access to decentralized funding (DEFI), according to Blockchain Development Company Alchemy.
Defi, traditionally a way for anonymous users to participate in a complex system of automated lending and borrowing of assets, can bring a whole new audience of users to conventional funding (tradfi) with the opportunity to comply with rows in place and abstract headaches by trading in smart contracts.
The common pattern is best described as cultivating a “defi mullet”, according to Alchemy, an election and forest provider for Blockchain barn lords who have been described as “aws of crypto”, a referral to Amazon Web Services, the ubiquitous cloud computing platform that drives much of today’s internet.
“I see companies like Fidelity, JPMorgan, Goldman Sachs, Revolut and Robinhood, all of which are in different stages of evolution, but all want to give their users the opportunity to take their funds, like their USD or as Fiat Money Funds and then use defi tools,” Alchemy CTO Guillaume Poncin said in an interview.
“The ordinary pattern is best described by the phrase ‘defi mullet.’ These are the most interesting use cases, I think where you can use defi under the hood, and the user doesn’t even have to know that it happens, ”said Poncin.
A concrete example of this type of thing is the way users of American-listed Exchange Coinbase (COIN) can easily get loans in exchange for locking their Bitcoin
A type of margin loan that retail investors usually do not have access to, pointed out poncin.
“Now it should be possible for Fidelity to offer these types of margin loans against your money market fund account as an example,” said Poncin. “All this is plumbing to [crypto] wallets and defi so that what uses is only a single click. Want a loan against your Vanguard Holdings? Here’s a loan. “
“I think a lot of fintechs look at it as a great proof of the concept of what can be done. If you tokenize your money market fund or tokenize your other assets, that’s what you want, what you want to give your users tools over it. And the supply vehicle is defi.”
Alchemy appeared about five years ago and offers a developer platform for companies that want to build blockchain operations on a large scale. The company continued to offer programmable connections between programs known as APIs, enabling data indexing, smart contract automation and smart wallets that feel invisible and intuitive, Poncin said. APIs actually put the software plumbing behind the scenes and ease the burden of end users.
“The old school road with blockchain drawing books would involve the installation of metamask, but it is a very cumbersome process,” said Poncin. “The new trend is that if you are Nike or Stripe, you will give crypto drawing books to your users they do not even know; they are completely invisible wallets under the hood.”
Correct (June 23, 08:52 UTC): Corrects spelling of reefs in the fourth paragraph.
