Challenges for institutional DeFi adoption
Quick Take
- The primary challenge for institutions to participate in DeFi is with risk management and KYC/AML requirements. DeFi introduces new challenges in addition to financial risk
- Lending rates on centralized lending desks have been influenced by the demand to generate yield from liquidity mining
- Centralized lending markets work between institutions and DeFi protocols to redirect risk to e.g., crypto funds who are willing to take on protocol risk
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Author: Mika Honkasalo
