The Utility of FinCypher Collateralized Debt Obligations in the DeFi Space

Unmitigated Risks in the Crypto Industry

  • Lack of accountability: Unlike traditional banks, which can be sanctioned or shut down, there is nobody who can be held accountable or take responsibility when something goes wrong. This is because the applications in DeFi are built on decentralized systems, which distribute functions and power away from a central location or authority. There is, however, a difficulty holding any particular person or entity accountable for any technological failure in this market.
  • Cyber-risk: In 2020, the crypto industry was no stranger to cyber-attacks and cybersecurity breaches. Hackers made off with millions after hitting the KuCoin exchange in September, while a range of DeFi (decentralized finance) platforms Balancer, Akropolis, Opyn, etc. also received more than their fair share of drama throughout the year. It is predicted that attacks on DeFi platforms and protocols — particularly new ones will rise. The possibility of the cyber-risk creates a significant risk of the loses of the crypto assets due to the lack of high-security standards in the space.
  • Highly Volatile Interest Rates: Currently, still the interest rates offered for the borrowing by the DeFi platforms such as Avaa and Compound is highly volatile. The high volatility affects particularly the interest of investors who are looking for stable returns.
  • High volatility of the crypto prices: The market prices are highly volatile, which can impact the total value of the portfolio in a relatively short period of time.

Enabling New Opportunities to the Extend the Market Size of DeFi

New Opportunities for Investors of Utilization their Loan Positions

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