DeFi Needs Institutional Grade Standards to Attract Large Investors

Decentralized finance (DeFi) has been rapidly growing, but it still faces a major hurdle in attracting large financial institutions: trust. Henry Zhang, CEO of DigiFT, believes that DeFi needs to become 'institutional grade' to convince these investors to participate.

According to Zhang, institutional grade means having clear legal definitions of what a token represents and how it links to underlying assets. It also requires governance frameworks, risk management systems, and disclosure protocols to ensure trust in tokenized assets.

Zhang argues that without these safeguards, large pools of capital will not participate in DeFi. He believes that the idea of building trust in crypto does not contradict the principles of blockchain technology, which allows for trustless systems where users rely on code rather than institutions.