As for dentralized finance (DeFi), he had this to say:<\/p>\n
\u201cWe\u2019re definitely pro DeFi. We\u2019ve listed dozens of DeFi tokens on Gemini. We\u2019re really very supportive. It\u2019s early days, right, and it\u2019s in the process of sort of building the building blocks within money legos and putting themselves together and re-architecting centralized finance.<\/em><\/p>\n \u201cThere\u2019s risk. It\u2019s not the most user-friendly experience. There\u2019s definitely risk. Some projects will fail spectacularly, and some of them will be incredibly successful. It\u2019s new, and that has to be sort of the lens at which you approach it.<\/em>\u201c<\/p>\n Last month, Joey Krug, Co-Chief Investment Officer at blockchain-focused investment firm\u00a0Pantera Capital Management LP, explained in his firm\u2019s most recent monthly newsletter why Ethereum (ETH) is undervalued.<\/p>\n In the\u00a0January 2021 issue\u00a0of Pantera Blockchain Letter, which was published on Thursday (January 14), Krug started by giving an introduction to Ethereum and its ecosystem:<\/p>\n \u201cEthereum is the leading asset in the cryptocurrency space for developers who want to write smart contracts and decentralized finance (DeFi) applications. It\u2019s the base money collateral for this new financial system. \u2026<\/em><\/p>\n \u201cWith Ethereum, anyone can participate in or even create a new financial market in a few clicks. You can take out a loan at 3am on a Saturday night if you want, and pay it back the following Sunday. Instead of needing an exchange or OTC desk, you can swap from one asset to another using sites like 1inch and Matcha, and often get a better price. And you can send someone digital dollars 24x7x365 in 30 to 60 seconds, and they actually receive it in that timeframe too\u2026<\/em><\/p>\n \u201c\u2026 now we\u2019re in the era of Ethereum actually being very useful and having found product market fit for people within crypto (2019\u201321). Over the course of this year, I believe this growth will continue and Ethereum will provide even more value for crypto users as a platform for decentralized exchanges (DEX\u2019s), lending protocols, synthetic asset trading protocols, etc\u2026<\/em>\u201c<\/p>\n As for today\u2019s price action, according to data by TradingView, at 8:20 UTC, the Ether price went above $1800 for the first time ever and by 09:13 UTC, it reached $1824, which is today\u2019s intraday high. <\/p>\n It is also worth mentioning that yeterday (February 8) was the first day of trading for CME Group\u2019s Ether futures. <\/p>\n Another important event \u2014 as far as Ethereum and DeFi is concerned \u2014 that took place yesterday was the release of a paper on DeFi by the Research Division of the Federal Reserve Bank of St. Louis.<\/p>\n This was the conclusion of their findings:<\/p>\n \u201cDeFi offers exciting opportunities and has the potential to create a truly open, transparent, and immutable financial infrastructure. Because DeFi consists of numerous highly interoperable protocols and applications, every individual can verify all transactions and data is readily available for users and researchers to analyze.<\/em><\/p>\n \u201cDeFi has unleashed a wave of innovation. On the one hand, developers are using smart contracts and the decentralized settlement layer to create trustless versions of traditional financial instruments. On the other hand, they are creating entirely new financial instruments that could not be realized without the underlying public blockchain.\u00a0Atomic swaps,\u00a0autonomous liquidity pools,\u00a0decentralized stablecoins, and\u00a0flash loans\u00a0are just a few of many examples that show the great potential of this ecosystem.<\/em><\/p>\n \u201cWhile this technology has great potential, there are certain risks involved. Smart contracts can have security issues that may allow for unintended usage, and scalability issues limit the number of users. Moreover, the term \u201cdecentralized\u201d is deceptive in some cases. Many protocols and applications use external data sources and special admin keys to manage the system, conduct smart contract upgrades, or even perform emergency shutdowns. While this does not necessarily constitute a problem, users should be aware that, in many cases, there is much trust involved. However, if these issues can be solved, DeFi may lead to a paradigm shift in the financial industry and potentially contribute toward a more robust, open, and transparent financial infrastructure.<\/em>\u201c<\/p>\n![](\"https:\/\/cryptoglobe.s3.eu-west-2.amazonaws.com\/2021\/02\/TV-Chart-ETHUSD-on-Bitstamp-One-Day-9-Feb-2021--1280x716.png\")
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