According to Bloomberg, the number of billionaires and important figures who support bitcoin and other cryptocurrencies is growing. The entry of institutional investors into the crypto industry appears to have accelerated digital currency adoption as mainstream assets. Web3 and decentralized protocols are allowing a new digital world to emerge. However, discussing the new online economy without mentioning digital assets or cryptocurrencies is difficult.
To increase the market value of digital assets, trillions of dollars must be invested in the digital asset economy. The widespread adoption of cryptocurrency by institutional investors with large sums of money to invest adds value to the cryptocurrency sector and the web3 economy.
Cryptocurrencies, which are completely decentralized, have a legitimate appeal as an exciting new asset traded globally. If the decentralized economy is to be anything, let alone innovative, the cryptocurrency sector's market value must continue to rise.
To increase the influx of institutional investors in the DeFi space in the future, there must be an air of confidence surrounding cryptocurrency investments, as the DeFi space is notorious for rug pulls and other scams, which can sour prospective institutional investors' confidence. This article will look at how DeFi projects can adjust their strategy to make the next generation of DeFi projects more appealing to institutional investors.
Major Hindrances To Institutional Adoption of DeFi
According to a PWC report, nearly half of hedge fund managers with a combined AUM of $180 billion are considering investing in Bitcoin. Grayscale Bitcoin Trust has seen an influx of nearly $2 billion since October 2020, compared to outflows of $7 billion for gold-backed exchange-traded funds. This demonstrates a growing interest in the cryptocurrency space by wealthy investors, and it attests to the growth of the DeFi sector over the last decade. Despite the wave of optimism, it is important to note that institutional investment in the cryptocurrency space still has a long way to go, and there have been a number of issues that have raised concerns among institutional investors about considering other digital assets in addition to Bitcoin.
To begin with, there have been numerous issues with scams, particularly in the early DeFi days, during the era of ICOs, when investors lost their hard earned money to various projects such as Bitconnect. Furthermore, the unpredictability and massive price fluctuations have played a significant role in impeding institutional adoption of DeFi. To combat this, DeFi platforms that 'protect investors' funds, such as IDO launchpads, were introduced in order to boost investor confidence and provide credibility to various DeFi projects.
Introducing SkyLaunch - A multi-chain IDO Launchpad
SkyLaunch aims to accelerate institutional adoption of DeFi by putting safeguards in place to protect institutional investors' interests. SkyLaunch is a multi-chain IDO launchpad that aims to move away from a solely fundraising model and become more comprehensive by providing all necessary Pre IDO and Post IDO support, tools, and resources for projects listed on its platform. The unique features of SkyLaunch provide enormous value to institutional investors. Skylaunch only lists projects for institutional investors after rigorous due diligence procedures have been completed. Skylaunch also established a governance council comprised of blockchain experts to serve as an additional line of defense against bad projects and to ensure that only the best projects are listed in order to protect investors' interests. Skylaunch, in addition to performing due diligence, employs advanced technology to address some of the issues that retail investors face. It employs a transparent on-chain mining algorithm, resulting in more equitable token distributions and higher rewards for investors. To ensure that investors never miss out on exciting projects, an exciting "auto-pilot" feature is implemented. Smart locks, utility NFTs, and DAO governance are also important safeguards for investors.
As more institutional investors enter the crypto market, it contributes to the broader acceptance of digital assets by bringing greater stability to the space. Projects such as SkyLaunch, which facilitates the onboarding of institutional investors, are required in the DeFi space and would play an important role in assisting DeFI to displace traditional finance.