Cross-Chain Lending: Exploring a Popular DeFi Use Case
In a recent podcast episode, Cointelegraph spoke with Aanchal Thakur, the COO of MultiChainZ, to delve into the world of decentralized finance (DeFi) lending. The conversation touched on the unique features of cross-chain lending platforms, the potential risks involved, and the growing adoption of decentralized autonomous governance in DeFi projects.
Lessons Learned from a Crypto Scam
Thakur shared her personal journey in the cryptocurrency industry, revealing that she had fallen victim to a crypto doubling scam early on. This experience taught her the importance of conducting thorough research and due diligence. Following this incident, she went on to work on various projects before joining MultiChainZ.
The Case for Cross-Chain Lending
Thakur made a compelling argument for the development of cross-chain lending platforms. She highlighted the fact that many individuals around the world lack access to funds, and by creating a lending and borrowing platform that spans multiple networks, users can tap into a wider range of liquidity sources.
Furthermore, Thakur emphasized the risks associated with relying solely on a single blockchain network. She stressed that decentralization can be better achieved by utilizing multiple networks, as demonstrated by recent incidents like Solana’s downtime that impacted user trust.
“If a blockchain is not working for even two hours, when Solana was down for a few hours, it impacted so many users. It impacted the trust of those users. So, we realized that it does not make sense to build a product on a particular blockchain.”
Bringing Institutions into Web3
Host Elisha Owusu Akyaw raised the topic of attracting institutional investors to the Web3 space through lending. Thakur explained that these investors are primarily concerned about risk and compliance. To attract major firms with significant capital, a higher security threshold is necessary. Additionally, Thakur acknowledged the importance of working within regulatory boundaries, as failing to do so could deter institutions from participating in the ecosystem.
Hot Take: The Future of Cross-Chain Lending
Cross-chain lending platforms have the potential to revolutionize the DeFi landscape by providing users with increased liquidity options and mitigating risks associated with relying on a single blockchain network. By embracing decentralized autonomous governance and collaborating with regulators, these platforms can attract institutional investors and foster the growth of Web3. As the industry continues to evolve, cross-chain lending is poised to play a pivotal role in shaping the future of decentralized finance.
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