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- Dubbed Open DeFi, the alliance is backed by the Chinese government.
- The alliance comprises leading firms, including dForce and Sequoia Capital, among others.
- Open DeFi aims to facilitate cross-border market growth, sustainability, and innovation.
Conflux Network, a permissionless blockchain firm, has rolled out a new DeFi-centered association that seeks to bring all major industry players across the globe together. The startup unveiled this news through an official announcement on September 3, noting that the alliance is dubbed Open DeFi. Through this association, the startup aims to connect Eastern and Western DeFi markets, a move that will unify China-based blockchain firms and global DeFi startups to pave way for cross-border market growth, sustainability, and innovation.
Reportedly, the Open DeFi alliance is backed by the Chinese government through the Shanghai Science and Technology committee. Apart from Conflux Network, Open DeFi comprises several industry players. These include dForce, a leading Chinese DeFi protocol, Sequoia Capital, Blockpower Capital, Antelop Holdings, DeBank, and MCDEX.
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The alliance members will reportedly split their efforts into three major categories. These are risk management, new liquidity strategies, and incubation and innovation. Firms in the risk management department will be tasked with ensuring smart contract and economic security for DeFi services. The liquidity team will see institutional investors and crypto exchanges come up with new pooling and trading strategies to increase liquidity. Regarding incubation and innovation, the association intends to partner on new DeFi offerings and join hands with other strategic partners.
DeFi’s rapid growth might have negative effects
This news comes as the DeFi sector continues rallying. For instance, the industry’s market cap increased from under £0.75 billion in January this year to £6.78 billion in late August. While the sector has been all bullish since its inception, industry experts have voiced concerns about its rapid growth. For instance, Waves founder, Sasha Ivanov noted that the sector’s popularity might miscarry, resulting in negative consequences. Ivanov went on to compare the current rally to the ICO craze that resulted in the 2017 crypto boom.
“DeFi is the future, but it’s going to be coming through a bubble part of the cycle now, which can harm its long-term development.”
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