DeFi, or Decentralized Finance, is an alternative choice to standard monetary providers. They’re primarily based on the usage of sensible contracts on blockchain platforms equivalent to Ethereum. In response to monetary expertise professional Sergey Kondratenko, this platform opens up the potential for decentralized entry to numerous monetary providers.
The specialist notes that at present DeFi protocols provide the next monetary providers which can be supplied with out authorities supervision:
● Offering loans utilizing digital property as collateral, equivalent to within the MakerDAO system.
● Buying and selling cryptocurrencies with out centralized management, an instance of which is the PancakeSwap platform.
● Finishing up decentralized alternate operations of ERC-20 tokens (Ethereum normal) on the DeFi Swap platform.
● Implementation of alternate between numerous platforms inside the DeFi ecosystem, for instance, by means of the InstaDApp service.
● Creation of funding deposits utilizing the Convex Finance platform.
On the one hand, the absence of a regulator creates freedom for monetary transactions. However then again, it makes the DeFi system unstable and susceptible to community assaults.
Sergey Kondratenko is a acknowledged specialist in a variety of e-commerce providers with expertise for a few years. Now, Sergey is the proprietor and chief of a bunch of corporations engaged not solely in numerous segments of e-commerce, but additionally efficiently working in numerous jurisdictions, represented on all continents of the world. The principle aim is to drive new site visitors, create and ship a web-based expertise that can endear customers to the model, and switch guests into prospects whereas maximizing total profitability of the net enterprise.
Sergey Kondratenko: international issues of DeFi
The professional states that open information signifies a relentless improve within the complete quantity of funds positioned in DeFi protocols (TVL, Complete Worth Locked). In Could 2018, this determine was $150 million. Every subsequent yr, till 2021 inclusive, the quantity modified within the following vary: $500 million, $950 million, $236 billion.
Sergey Kondratenko notes that 2022 turned out to be a troublesome yr for the crypto trade. Throughout that interval, there was a major lower within the quantity of funds in DeFi protocols (TVL). This was adopted by long-term financial stagnation within the decentralized finance section.
As of January 1, 2023, the entire DeFi market measurement was $43.7 billion, representing a drop of roughly 80% from the all-time excessive (ATH). In April, this determine reached $60 billion. And 6 months later, TVL dropped under the preliminary stage.
In November, because the broader cryptocurrency market recovered, liquidity within the DeFi sector started to rise once more. Nevertheless, by the tip of 2023, the entire TVL of the section was estimated at $60 billion.
Together with value stagnation, 2023 was continuously accompanied by information of hacker assaults on DeFi platforms. Sergey Kondratenko, citing studies from DeFi Llama, studies that the entire harm suffered by customers of decentralized functions as a consequence of hacker assaults reached greater than $5.69 billion. The specialist provides to the truth that cross-chain bridges turned one of many primary targets of the attackers. complete losses on this subsegment exceeded $2.7 billion.
Lately, there was additionally a high-profile incident with the hacking of Heco Bridge and the disclosure of the HTX alternate scorching pockets. Harm is estimated at $110 million.
Within the fall of 2023, surges in hacker exercise had been additionally recorded. They efficiently carried out assaults on DeFi protocols. The results of such unlawful actions was monetary losses of $308 million in September and $331 million in November.
Sergey Kondratenko: the function of DeFi in potential cash laundering and terrorism financing
The specter of the usage of cryptocurrencies by terrorist organizations highlights the intense vulnerability of the present monetary system. In response to Sergey Kondratenko, such prison teams efficiently use digital property to lift vital funds. On the similar time, they bypass conventional banking methods, keep away from worldwide sanctions, and measures to fight cash laundering and the financing of terrorism.
This technique of financing poses a direct risk to international safety and stability.
The professional studies that within the two years earlier than the precise assault, cryptocurrency wallets related to Hamas and Palestinian Islamic Jihad acquired greater than $130 million in digital forex. These funds embrace vital quantities acquired shortly earlier than the assault occurred.
Sergey Kondratenko notes that such alarming information point out that cryptocurrency has change into an acceptable supply for financing terrorist teams. On the similar time, the professional assumes that the recognized figures signify solely part of the actual quantity of funding. This case demonstrates how uncontrolled buying and selling of cryptocurrencies is carried out by means of DeFi protocols. This results in international issues and even monetary crimes, which makes the monetary world take into consideration regulating the circulate of digital funds and DeFi providers.
A balanced method to DeFi regulation: improvements, challenges, and worldwide cooperation – Sergey Kondratenko
DeFi is distinguished by the absence of a central governing physique, which essentially distinguishes it from conventional monetary methods. Sergey Kondratenko emphasizes that decentralization poses vital challenges to compliance with anti-money laundering (AML) legal guidelines inside the DeFi market. The specialist suggests contemplating probably the most primary of them:
The technical and operational aspect of DeFi is characterised by decentralization and anonymity. This creates challenges for conventional anti-money laundering (AML) methods. The absence of a government makes it troublesome to implement normal procedures.
DeFi-specific improvements which can be of their early levels could also be hampered by over-regulation. The specialist expresses concern that too strict rules may decelerate the expansion and improvement of revolutionary monetary applied sciences.
The worldwide nature of cryptocurrencies and DeFi poses regulatory challenges in particular person international locations. Efficient worldwide efforts are wanted to manage this space.
– There’s additionally a priority that making use of conventional banking guidelines to DeFi may trigger market disruption, pushing some operations into the shadows. That is opposite to the aim of introducing guidelines and may result in the alternative impact,– Sergey Kondratenko feedback on one of many eventualities for the event of the state of affairs.
The professional is assured that to successfully regulate the actions of DeFi organizations, taking into consideration the issues and dangers which have arisen, a balanced and detailed method is required. This method, in accordance with Sergey Kondratenko, consists of the next parts:
- The worldwide cooperation:
● Improvement of world requirements and practices for efficient regulation of DeFi.
● Cooperation between international locations to resolve cross-border transactions and jurisdictional points.
- Normative base:
● Creating distinctive rules that can consider the specifics of DeFi and promote innovation.
● Help versatile and adaptive guidelines to facilitate the event of revolutionary monetary applied sciences.
- Public-private partnership:
● A collaborative effort between authorities companies, regulators, and DeFi representatives to develop efficient AML methods.
● Help in creating an atmosphere that can promote cooperation between events.
- Info coverage:
● Conducting coaching seminars for customers and DeFi market members on the dangers and wish for AML compliance.
● Consciousness of authorized necessities and tasks within the subject of decentralized finance.
- Know-how-based options:
● Leveraging cutting-edge applied sciences to create subtle DeFi monitoring and evaluation instruments.
● Growing expertise options that assist establish suspicious exercise with out compromising privateness or interfering with reliable transactions.
Discussions about implementing conventional AML requirements within the DeFi area embrace problems with safety, regulatory equity, and the steadiness between innovation and oversight. Sergey Kondratenko is satisfied that regardless of the relevance of regulating DeFi to counter the usage of cryptocurrencies by terrorist teams, additionally it is essential to dive deeply into the options of the decentralized construction of those monetary platforms. He’s assured that solely an built-in method will make it potential to discover a compromise between regulation and help for innovation and assure safety and stability in DeFi.
DeFi, or Decentralized Finance, is an alternative choice to standard monetary providers. They’re primarily based on the usage of sensible contracts on blockchain platforms equivalent to Ethereum. In response to monetary expertise professional Sergey Kondratenko, this platform opens up the potential for decentralized entry to numerous monetary providers.
The specialist notes that at present DeFi protocols provide the next monetary providers which can be supplied with out authorities supervision:
● Offering loans utilizing digital property as collateral, equivalent to within the MakerDAO system.
● Buying and selling cryptocurrencies with out centralized management, an instance of which is the PancakeSwap platform.
● Finishing up decentralized alternate operations of ERC-20 tokens (Ethereum normal) on the DeFi Swap platform.
● Implementation of alternate between numerous platforms inside the DeFi ecosystem, for instance, by means of the InstaDApp service.
● Creation of funding deposits utilizing the Convex Finance platform.
On the one hand, the absence of a regulator creates freedom for monetary transactions. However then again, it makes the DeFi system unstable and susceptible to community assaults.
Sergey Kondratenko is a acknowledged specialist in a variety of e-commerce providers with expertise for a few years. Now, Sergey is the proprietor and chief of a bunch of corporations engaged not solely in numerous segments of e-commerce, but additionally efficiently working in numerous jurisdictions, represented on all continents of the world. The principle aim is to drive new site visitors, create and ship a web-based expertise that can endear customers to the model, and switch guests into prospects whereas maximizing total profitability of the net enterprise.
Sergey Kondratenko: international issues of DeFi
The professional states that open information signifies a relentless improve within the complete quantity of funds positioned in DeFi protocols (TVL, Complete Worth Locked). In Could 2018, this determine was $150 million. Every subsequent yr, till 2021 inclusive, the quantity modified within the following vary: $500 million, $950 million, $236 billion.
Sergey Kondratenko notes that 2022 turned out to be a troublesome yr for the crypto trade. Throughout that interval, there was a major lower within the quantity of funds in DeFi protocols (TVL). This was adopted by long-term financial stagnation within the decentralized finance section.
As of January 1, 2023, the entire DeFi market measurement was $43.7 billion, representing a drop of roughly 80% from the all-time excessive (ATH). In April, this determine reached $60 billion. And 6 months later, TVL dropped under the preliminary stage.
In November, because the broader cryptocurrency market recovered, liquidity within the DeFi sector started to rise once more. Nevertheless, by the tip of 2023, the entire TVL of the section was estimated at $60 billion.
Together with value stagnation, 2023 was continuously accompanied by information of hacker assaults on DeFi platforms. Sergey Kondratenko, citing studies from DeFi Llama, studies that the entire harm suffered by customers of decentralized functions as a consequence of hacker assaults reached greater than $5.69 billion. The specialist provides to the truth that cross-chain bridges turned one of many primary targets of the attackers. complete losses on this subsegment exceeded $2.7 billion.
Lately, there was additionally a high-profile incident with the hacking of Heco Bridge and the disclosure of the HTX alternate scorching pockets. Harm is estimated at $110 million.
Within the fall of 2023, surges in hacker exercise had been additionally recorded. They efficiently carried out assaults on DeFi protocols. The results of such unlawful actions was monetary losses of $308 million in September and $331 million in November.
Sergey Kondratenko: the function of DeFi in potential cash laundering and terrorism financing
The specter of the usage of cryptocurrencies by terrorist organizations highlights the intense vulnerability of the present monetary system. In response to Sergey Kondratenko, such prison teams efficiently use digital property to lift vital funds. On the similar time, they bypass conventional banking methods, keep away from worldwide sanctions, and measures to fight cash laundering and the financing of terrorism.
This technique of financing poses a direct risk to international safety and stability.
The professional studies that within the two years earlier than the precise assault, cryptocurrency wallets related to Hamas and Palestinian Islamic Jihad acquired greater than $130 million in digital forex. These funds embrace vital quantities acquired shortly earlier than the assault occurred.
Sergey Kondratenko notes that such alarming information point out that cryptocurrency has change into an acceptable supply for financing terrorist teams. On the similar time, the professional assumes that the recognized figures signify solely part of the actual quantity of funding. This case demonstrates how uncontrolled buying and selling of cryptocurrencies is carried out by means of DeFi protocols. This results in international issues and even monetary crimes, which makes the monetary world take into consideration regulating the circulate of digital funds and DeFi providers.
A balanced method to DeFi regulation: improvements, challenges, and worldwide cooperation – Sergey Kondratenko
DeFi is distinguished by the absence of a central governing physique, which essentially distinguishes it from conventional monetary methods. Sergey Kondratenko emphasizes that decentralization poses vital challenges to compliance with anti-money laundering (AML) legal guidelines inside the DeFi market. The specialist suggests contemplating probably the most primary of them:
The technical and operational aspect of DeFi is characterised by decentralization and anonymity. This creates challenges for conventional anti-money laundering (AML) methods. The absence of a government makes it troublesome to implement normal procedures.
DeFi-specific improvements which can be of their early levels could also be hampered by over-regulation. The specialist expresses concern that too strict rules may decelerate the expansion and improvement of revolutionary monetary applied sciences.
The worldwide nature of cryptocurrencies and DeFi poses regulatory challenges in particular person international locations. Efficient worldwide efforts are wanted to manage this space.
– There’s additionally a priority that making use of conventional banking guidelines to DeFi may trigger market disruption, pushing some operations into the shadows. That is opposite to the aim of introducing guidelines and may result in the alternative impact,– Sergey Kondratenko feedback on one of many eventualities for the event of the state of affairs.
The professional is assured that to successfully regulate the actions of DeFi organizations, taking into consideration the issues and dangers which have arisen, a balanced and detailed method is required. This method, in accordance with Sergey Kondratenko, consists of the next parts:
- The worldwide cooperation:
● Improvement of world requirements and practices for efficient regulation of DeFi.
● Cooperation between international locations to resolve cross-border transactions and jurisdictional points.
- Normative base:
● Creating distinctive rules that can consider the specifics of DeFi and promote innovation.
● Help versatile and adaptive guidelines to facilitate the event of revolutionary monetary applied sciences.
- Public-private partnership:
● A collaborative effort between authorities companies, regulators, and DeFi representatives to develop efficient AML methods.
● Help in creating an atmosphere that can promote cooperation between events.
- Info coverage:
● Conducting coaching seminars for customers and DeFi market members on the dangers and wish for AML compliance.
● Consciousness of authorized necessities and tasks within the subject of decentralized finance.
- Know-how-based options:
● Leveraging cutting-edge applied sciences to create subtle DeFi monitoring and evaluation instruments.
● Growing expertise options that assist establish suspicious exercise with out compromising privateness or interfering with reliable transactions.
Discussions about implementing conventional AML requirements within the DeFi area embrace problems with safety, regulatory equity, and the steadiness between innovation and oversight. Sergey Kondratenko is satisfied that regardless of the relevance of regulating DeFi to counter the usage of cryptocurrencies by terrorist teams, additionally it is essential to dive deeply into the options of the decentralized construction of those monetary platforms. He’s assured that solely an built-in method will make it potential to discover a compromise between regulation and help for innovation and assure safety and stability in DeFi.
