Gaurav Arora of CoinDCX in talks with Aabha Bakaya

Gaurav Arora of CoinDCX – Aabha Bakaya, senior editor & anchor, Business Today TV and Gaurav Arora, SVP CoinDCX PRO, are talking about the relationship between CRYPTO and DeFiI.

Aabha questions Gaurav on the distinctions between DEFI and crypto. According to Gaurav, Blockchain is the enabling technology that makes it possible to conduct transactions decentralizedly. Crypto is one of the most well-known uses of DeFi, the general platform that enables lending, earning, stock transactions, etc.

Then, Aabha inquires about the possible dangers of DeFi on the Indian and international markets. According to Gaurav, by five to ten years, the financial world would have advanced by 150 years. Therefore, there may be technological concerns in the early phases. DeFi’s open source code makes it vulnerable to assaults, hacks, and other security flaws. On the other hand, thousands of contributors work to find bugs and improve the code, so over time this will result in a more robust and stronger code base.

The second danger is related to cost and scalability. For instance, Visa, one of the second-largest payment processors, can support thousands of transactions per second whereas Ethereum, the most popular decentralised financial institution, can support just 15.

Gaurav Arora of CoinDCX

Continuous effort is being done in this area to increase productivity; one example is the upcoming “Merge” event, when Ethereum is upgrading to Ethereum 2.0, where the cost of electricity will decrease by 99.9%.

The self-custody danger is the third one. Users in DeFi have complete control over the assets they can access with a private key. The drawback is that if the user lost the private key, they would never again be able to access their funds, and if someone else obtained it, they could take control of all of their assets. A better and more intelligent recovery mechanism is the answer.

The fourth risk category is regulatory risk. DeFi offers some degree of anonymity, which poses dangers for money laundering and exploitation. The solution to this issue is to associate an identity with the transactions while maintaining their anonymity.

Aabha continues by inquiring about DAO and its relationship to DeFi.

The acronym DAO stands for Decentralized Autonomous Organization, according to Gaurav. It can be thought of as the following development in office organisations. The DAO code’s strength resides in the fact that it cannot be cracked, making it the purest form of democracy. Every DAO decision is also open to audit.

Aabha continues by talking about the main issues with DeFi technology. Gaurav starts off by talking about the pricing issue because the price has been deviating from what was truly anticipated. The emphasis must be on eliminating inefficiencies, unlocking value, and distribution when it comes to regulatory ambiguity. Therefore, Gaurav suggests that the next wave of growth will come from actual utilities and use cases rather than just pure speculation.

Time-consuming research is required to fully understand how to govern this area, but progress is unquestionably being made.

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