As someone who has navigated the corporate banking world for years, I can confidently say that the intersection of TradFi and DeFi is like watching two long-lost relatives finally reunite after a tumultuous past. Just as my grandparents’ reunion brought newfound joy to our family, this convergence promises an exciting future for finance.
Abdul Rafay Gadit switched his professional path from the conventional banking sector, often referred to as TradFi, to the innovative field of Decentralized Finance, commonly known as DeFi.
Traditional Finance (TradFi) is heavily regulated, prioritizing consumer protection, but it may be sluggish, expensive, and limited to individuals who have access to banking services. On the other hand, Decentralized Finance (DeFi) welcomes anyone with internet connectivity, offering speedier transactions and broader accessibility. However, DeFi also presents risks like bugs in smart contracts, potential hacking, and minimal regulation due to its decentralized nature.
According to Gadit, it seems like an important juncture where these two realms are starting to overlap or merge together. (Gadit tells crypto.news)
After devoting six years to corporate banking at Standard Chartered, Gadit initiated Zignaly (ZIG) in 2018. Since its launch, the platform has grown to accommodate more than half a million users and over 150 portfolio managers. Additionally, they are developing a blockchain system, named ZIGChain.
Delve into Gadit’s insights regarding the current wave of social trading trends, and understand how this innovative approach could link the worlds of Traditional Finance (TradFi) and Decentralized Finance (DeFi).
How have your experiences in TradFi influenced your approach to ZIGChain?
Gadit: What motivated me to switch from corporate banking to blockchain was a strong urge to innovate and disrupt the conventional financial systems I had been associated with for six years. My tenure at Standard Chartered provided me with an in-depth understanding of the flaws and constraints within traditional finance, particularly in terms of accessibility, transparency, and chances for wealth creation.
Blockchain introduced a groundbreaking concept: giving individuals the power to manage their assets, make decisions collectively without relying on any central authority, and join open, digital financial networks. Joining forces to establish Zignaly allowed me to utilize my banking expertise, with the primary goal of developing a platform that welcomes everyone, regardless of their background, to invest alongside skilled traders, thereby capitalizing on opportunities within the web3 sphere.
Our approach has been significantly shaped by my background in traditional finance. We strive to integrate the most beneficial practices from the banking sector – such as rigorous risk management, stringent compliance, and robust user protection – with the cutting-edge innovation and openness of blockchain technology. The aim is to establish an infrastructure that fosters wealth creation in a more inclusive, transparent, and straightforward manner for all users.
What is your long-term vision for ZIGChain?
Our ultimate goal is to construct a resilient and extensible Layer 1 blockchain, capable of supporting a fully decentralized system designed for wealth generation. This platform would facilitate collaboration among developers, fund managers, and users, enabling the development and use of advanced DeFi tools, applications, and infrastructure. By fostering financial inclusion and wealth creation, this ecosystem aims to empower its participants.
Our goal is to not only drive adoption but also establish ZIGChain as a cornerstone of the web3 financial landscape — where builders, fund managers, and users alike can thrive in a transparent, secure, and high-performance environment. With the backing of industry leaders and a clear focus on sustainability and innovation, we’re well-positioned to make this vision a reality.
ZIGChain launched a $100-million ecosystem development fund in August. Where will that capital go?
The $100 Million Ecosystem Fund, supported by DWF Labs, UDHC Finance, and Disrupt, is essential for bringing our vision to life. We aim to utilize these funds to entice leading developers and projects, providing them with the necessary tools and assistance to develop cutting-edge instruments specifically on ZIGChain. This investment will catalyze the development of our ecosystem by encouraging innovation, enhancing our infrastructure, and establishing incentives for crucial contributors.
What are the most significant challenges in managing such a large social investment platform?
One of the key challenges we’ve faced with Zignaly is the limited access to asset classes. As of now, fund managers on our platform can only invest in tokens listed on centralized exchanges, which restricts the investment opportunities available to our users. However, with ZIGChain, we’re opening the doors to a much broader range of assets, including DeFi, real-world assets, NFTs, perpetual contracts, and tokens across multiple chains. This flexibility not only offers fund managers more options but also creates more diverse and profitable investment strategies for our users, ultimately increasing yield potential.
In our experience, traditional financial systems, or CeFi, have faced challenges like mandatory KYC procedures and geographical access limitations, which may exclude global users and pose scalability issues. However, ZIGChain, as a decentralized blockchain, avoids many of these hurdles by offering a more open and expandable system. This means that users can participate freely without the stringent restrictions typical of centralized platforms, making ZIGChain available to a wider range of people and preparing us for increased demand.
On Zignaly, one challenge we’ve encountered is relying on CeFi traders. At present, our capabilities are confined to fund managers and traders within centralized exchanges. However, with the introduction of ZIGChain, we break free from these boundaries and welcome DeFi traders into the fold. This expansion brings forth unexplored DeFi strategies and products that were unavailable on Zignaly before. By venturing into the DeFi sector, we aim to boost yield possibilities for our users, enhance overall profitability, and diversify income sources for the business. Not only does this improve user experience, but it also positions ZIGChain as a more agile and versatile platform in the rapidly changing web3 environment.
Given your background in corporate banking, how do you see the intersection of TradFi and DeFi evolving?
With my experience rooted in corporate banking, I’ve developed a distinctive viewpoint on the promising overlap between conventional finance and decentralized finance. I firmly believe we’re standing at a critical juncture where these two realms are merging, offering vast possibilities for groundbreaking advancements and financial accessibility.
The traditional financial system (TradFi) has traditionally served as the foundation of the global economy, boasting robust systems for managing risk, ensuring compliance, and building trust. Nevertheless, it carries its own set of constraints such as limited access to wealth creation possibilities, steep entry barriers, and sluggish innovation. In contrast, Decentralized Finance (DeFi) promotes openness, inclusivity, and decentralization, empowering users with direct ownership over their assets and access to a wider variety of financial tools like staking, lending, and tokenized real-world assets.
Over time, I anticipate conventional establishments embracing Decentralized Finance (DeFi) techniques more and more, aiming to boost efficiency and enrich their client offerings. This embrace might span various aspects such as tokenized assets, decentralized lending platforms, and even automated financial processes through programmable smart contracts.
By constructing a harmonious environment that blends the robust security and regulatory standards of Traditional Finance (TradFi) with the groundbreaking ideas and openness of Decentralized Finance (DeFi), we can establish a more inclusive and adaptable financial structure. In this ideal future, users effortlessly transition between conventional and decentralized financial goods, opening up fresh avenues for wealth accumulation and financial autonomy on a worldwide level.
Does Zignaly compete with other social investing platforms?
At Zignaly, we don’t view ourselves as rivals with other social investment platforms; rather, our competition lies in striving to innovate and widen the scope of fund management for all. Our aim is to make wealth creation more accessible, so that people from any financial background can link up with skilled fund managers and explore a diverse variety of asset classes. Essentially, we’re working towards making wealth generation a democratic process.
On other platforms, you might find them confined to centralized systems or conventional investment options. However, we’re breaking new ground by merging Decentralized Finance (DeFi), Real-World Assets (RWAs), Non-Fungible Tokens (NFTs), and more within ZIGChain. Our goal is to shatter the barriers that have historically kept individuals from managing their wealth, creating an environment where financial expansion is no longer a privilege, but a universal right accessible to all.
Essentially, our toughest rival is our drive to innovate and reshape the realm of decentralized finance and investment, pushing boundaries beyond their current limits.
What trends do you foresee in social investing?
Over time, there’s been a significant increase in the desire for openness, strategies that focus on results, and a variety of investment options. In the realm of social investing, we notice a move towards decentralized systems and novel investment possibilities. This is particularly true as users grow more knowledgeable about the advantages of Decentralized Finance (DeFi) and digital assets represented by tokens.
Over the next few years, I anticipate a surge in the need for customized investment approaches, moving beyond simply selecting a portfolio manager based on their previous successes. Instead, users will have instant access to adaptable strategies that cater to unique risk tolerance levels, preferences, and objectives. Additionally, there’s a strong possibility of increased interaction with decentralized financial assets, providing an unparalleled opportunity for diversification.
How does one stay ahead of the web3 curve?
To stay ahead in the web3 space, we’re constantly innovating. With ZIGChain, we’re creating a platform that not only offers access to a much wider range of assets beyond centralized exchanges but also introduces features like automated, trustless smart contract-based fund management, which significantly enhances security and transparency. We’re also building our infrastructure to accommodate more DeFi portfolio managers, allowing them to bring strategies and tools to our users. This will not only improve profitability for our users but also attract a new generation of traders to the platform.
We aim to pioneer advancements in community-driven investment, maintaining a decentralized structure, expanding opportunities into various novel and varied asset categories, and consistently emphasizing on safety, clarity, and an intuitive user interface.
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2024-10-05 18:06