The Five ‘Must Haves’ of DeFi & Crypto
There is no question that cryptocurrency and digital assets have morphed from their origins as peer-to-peer methods of circumventing the traditional financial markets economy.
So great was the breakthrough in the technological and financial world that cryptocurrency provided, that now we live in a digital society which has been built on the decentralized nature of cryptocurrency which is extremely comprehensive.
It could be argued that the developments which have come about relating to blockchain technology and its use in the furthering of decentralized finance (DeFi) represent the biggest leap forward in any form of life-changing and empowering technology since the development of the internet.
To simply consider the leading cryptocurrencies as alternative methods of payment or as tradable assets is to be missing out on an entire range of services which can now be executed as a result of the intricate detail of the blockchain from which they emanate.
Smart contracts, which are transforming the way transactions in business and the private world take place as tamper-resistant methods of governing a transaction between two parties without an intermediary, along with other important areas such as lending, distributed ledger and crowdfunding.
So rapid is the development of these decentralized protocols that blockchain technology shows huge possibilities in revolutionizing other areas of the fiscal world as time goes on, especially given the extremely versatile Ethereum blockchain and its forthcoming ETH2 upgrade which aims to further refine the smart contract functionality.
Given the new world we are entering, and the predictions by mainstream analysts at Tier 1 banks that Bitcoin and Ethereum are heading for stratospheric valuations in the near future, it is clear that digital assets and the technology that underpins them is the future.
Therefore, five points should be considered when choosing a venue as a long-term partner to help you grow your access to these continually evolving possibilities.
1) Not just an exchange, but a full marketplace for all decentralized services.
To be able to participate in the new fully comprehensive digital ecosystem, a cryptocurrency venue must be far more than just an exchange in which fiat currency can be traded against crypto pairs.
It is well worth looking at full functionality, including the effectiveness of the Fiat on/off ramp which provides access to the DeFi ecosystem, and is also worth looking at what custodian services can be offered. CoinMetro is the ultimate fiat on/off ramp for all digital currencies, and given the new Layer 2 technology that is now underpinning protocols which operate on the Ethereum blockchain, access to these services via the most effective means is critical.
What was considered by a large number of entrants into the cryptocurrency arena as something that would never affect digital assets is now very important: Regulation.
A number of companies began their cryptocurrency businesses without regulation and considered regulation to be a constraint of the mainstream financial world. These companies grew initially to quite a high level based on their completely non-compliant approach, however as the cryptocurrency world refined itself and became a large ecosystem of all manner of dementalized services and is now very much on the radar of the US SEC, one of the world’s most respected financial markets and exchange securities regulators.
Those companies which initially did well on the back of not being regulated now either no longer exist, or have been the subject of sanctions by worldwide governments for operating outside of what would be considered allowable if these were regulated financial services entities, therefore were operating a classic case of ‘regulatory arbitrage’, in making hay whilst the sun shines in the hope that the regulators would never catch up with them. Well, a few collapsed businesses with customer losses behind them and a few sanctions later, it is clear that regulation is key.
And by regulation, that means regulation from the outset. CoinMetro was founded as a regulated cryptocurrency exchange, and also has an E-Money Institution (EMI) license as a payment services provider.
Within the next few months, CoinMetro aims to launch a Multi-Lateral Trading Facility (MTF) which would mean that it would be fully equipped as a challenger bank with its multi-asset regulated crypto exchange, MTF and payment services provider all with the correct licensing from the outset. Only this way can any cryptocurrency ecosystem be developed and only this way can you get the mos from the crypto world.
3) Full access to services
Any crypto exchange should be able to provide regulated access to all global markets, and all cryptocurrency pairs. However aside from that, it should be able to give access to full range of services, such as smart contract capability, electronic payments and the participation in staking for key products such as Kadena.
CoinMetro’s Kadena staking capability is unique and gives participants the ability to earn a passive income whilst taking their part in forming a new multi-functional blockchain protocol which provides high levels of throughput, virtually free gas and all the security of Bitcoin.
4) Has it got its own token and what are the credentials?
A regulated, multi-faceted digital asset venue should be working on its own native token. By developing an inherent digital currency on blockchain technology, an exchange or venue that develops its own native token is one which is setting itself out to be a benchmark.
CoinMetro has its own native token, XCM. The ethos behind the development of XCM lies within CoinMetro founder Kevin Murcko’s vision which encompasses a fairer world in which more people have access to financial products, all of which should be powered by XCM.
XCM aligns customers and company, and CoinMetro is able to reward early adopters and loyal supporters who buy and take part in staking of XCM, and gives customers a way to interact within the CoinMetro ecosystem.
The main aim and utility for the XCM token is that it is directly connected to CoinMetro platform activity and therefore the demand for XCM is automatically propagated.
5) The corporate world is ready for DeFi
As businesses look further toward being able to settle their transactions quickly and cheaply via digital currencies and use the smart contract facilities they offer as a holistic solution for international commercial relationships, it is important that a cryptocurrency venue is able to offer small businesses what they need.
CoinMetro provides a regulated account for small and medium sized businesses, in which businesses can hold their treasury in cryptocurrency. The bank takes between 3 and 5 days to settle international remittances via the traditional SWIFT system, losing businesses the use of that capital for those days on both sides of the transaction. They also charge huge fees for converting fiat currencies and for making international transactions.
Business accounts with regulated exchanges make the global commercial world smaller, more efficient and much cheaper.
There are of course many other reasons to go crypto, but here are five to look for when choosing an exchange and long term partner for all areas of DeFi.