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November 2, 2021

DeFi:
The Financial Opportunity Institutional Investors Can't Afford To Ignore

 
DeFi, what is it and what does it do?
 
DeFi, short for Decentralised Finance, is an entire new economic ecosystem of financial assets and services that are run on decentralised networks, known as a blockchain. It does not rely on central financial intermediaries, such as brokerages, exchanges or banks and instead uses smart contracts on blockchains, the most common one being Ethereum.
 
The main purpose of DeFi platforms allows people and large institutional investors to lend or borrow funds from others, trade cryptocurrencies and earn in some cases large interest amount on their savings-like accounts.
 
Long gone are the days where you can park your savings in the bank and receive a decent return on your hard-earned money. Currently the big banks in Australia are making you a return of no more than 0.35% ROI pa on your savings. This has caused not only personal investors but the big institutions to look for alternative options that are going to far outperform what they are currently making, and the answer seems to lie in DeFi.
 
When it comes to investors, especially professional investors they are concerned in one thing and one thing only: returns. And when looking for an investment they are only concerned in an investment that is going to give them consistent high returns that outperform the current market. Professional investors are moving towards Digital Assets because they are doing just thing, far outperforming and other traditional investment on the market.
Let’s look at Bitcoin for example, Bitcoin (BTC) has been the top performing asset of the decade, far outperforming any other investment option on the market.
 
In a recent survey it was found that 62% of investors not already exposed to the digital asset market plan to invest within the next year. But it doesn’t end there, beyond Bitcoin (BTC) there is a whole new investment realm of DeFi, offering decentralised exchanges, lending platforms and high yield compounding options.
 
One way professional investors are making high returns through this new investment model is putting their money to work in a liquidity pool, which is used to power a decentralised exchange.
 
A decentralised exchange, or DEX’s, use these liquidity pools to enable trades that are completely 100% governed by a mathematical code, with no human oversight necessary. Each time a trade is made, a small fee is attached to that trade, which is then distributed to all the liquidity providers based on their personal share of the liquidity pool. Because as mentioned above, there is no need for human oversight, this means that the rewards paid out are much higher than what we have seen in traditional investments. Upwards of 10% ROI pa is considered normal, with some products even offering over 20
– 30% returns.
 
Because the DeFi system has proven to be more profitable with much high efficiency than traditional financial investment options, large professional investors are already starting to notice this and moving into the DeFi realm as an investment opportunity. Over the last year especially, according to a report from Chainalysis, the share of total DeFi transaction volume coming from large institutions has risen from around 10% in Q1 of 2020 to over 60% in Q2 of 2021
Mark Ten Caten, CEO of NGS Group has commented on the opportunities of the DeFi space for large, professional investors –
 

“The wheels are really starting to turn for the DeFi space, and there has already been a major increase in the amount of large professional investors getting involved in the space. We can only expect, as people become more comfortable with the digital asset space, that this number will continue to grow.
 
This new asset space, which has been largely untapped, and all of the great opportunities that come with it cannot be ignored, and you do not want to be one of the ones that is ultimately left behind.”

Mark Ten Caten Tweet
NGS Group specialises in Digital Assets as an up-and-coming investment style, we help facilitate thousands of blockchain transactions around the world every single day. Every time someone wishes to make to make a transaction (i.e. to buy something or send money), miners like us help to facilitate this transaction and are paid a small ‘service fee’ to do so.
 
The common analogy we use here, is like that of a bank ATM. We buy, own, and manage the machine, and every time someone uses our machines, we make a small fee from the transaction. Multiplying this analogy by thousands of machines, and millions of transactions, this is the simplest way to understand how we generate returns for our members.
 
As of 2021 NGS has helped over 750 members world-wide get involved in Digital Assets, with countless success stories of helping them to create life- changing wealth. With a proven track record of never paying out a member less than the minimum advertised return, 5 offices world-wide (including 2 in Australia), and 100 staff members internationally, NGS Group have established themselves as Australia’s leaders in Digital Asset Mining company.
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