DeFi is a commonly thrown-around word in the crypto and investing space, especially in the past few years. But what does it mean? Well, DeFi simply stands for Decentralized Finance. Decentralized Finance is defined as a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains, most common being Ethereum. Recently, a protocol used by an asset management firm in the space of DeFi has raised a lot of money, it’s called Tranchess Protocol and it is a chess themed DeFi asset management platform.
The protocol has raised $1.5 million in a seed round led by Spartan Group and Three Arrows Capital. Tranchess is an ecosystem built for new DeFi apps that run smart contracts. The protocol seeks to provide a risk/return matrix from a single main fund, and according to Yahoo the protocol has started tracing bitcoin‘s movements and plans to add more assets further down the line.
The fund aims to serve a variety of clients with different risk appetites. The fund is just another example of how DeFi continues to grow as space, and although it’s not that large now, proponents of the system believe it will be at least as big if not bigger than the current banking industry. What do you think about decentralized finance? And do you think it will ever become that large?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.