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Last updated
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We expect ~$8-19T in assets (both web3-native & real-world) to be on-chain in the near future. There’s a strong need to use on-chain financial rails to manage these assets, and many professional investors & traders are already exploring DeFi.
So, what’s stopping the adoption?
We have worked with 150+ crypto hedge funds, traders, digital asset managers & other professional investors to understand their pain points preventing them from using a fully on-chain infrastructure:
Lack of liquidity depth on AMMs vs. CEXes or OTC for large- & mid-cap tokens
Need for custom integrations with each of the DeFi protocols, which can take months/years and $millions spent on engineering & security audits
Challenges in creating automated trading strategies in DeFi vs. building an algo on top of CEX APIs
No native sub-account/managed-account logic in DeFi, which means you need to either take full custody, have a shared multisig or use rigid non-custodial vaults
Unclear how to manage regulatory and compliance requirements for on-chain interactions
Lack of reliable omni-chain infrastructure makes CEXes still a preferred option for cross-chain trading, even for crypto-native funds
Lack of on-chain derivatives forces the use of CEXes for hedging & delta-neutral strategies
Complex & siloed RWA platforms that lack liquidity provide little benefit for managing real world assets on-chain
While DeFi infrastructure is maturing across the board, it still lacks the comprehensive, institutional-grade tooling that is suitable for professional investors & traders.