December 10, 2020, 12:25PM EST
• 13 min read

Challenges for institutional DeFi adoption

Quick Take

  • The primary challenge for institutions to participate in DeFi is with risk management and KYC/AML requirements. DeFi introduces new challenges in addition to financial risk
  • Lending rates on centralized lending desks have been influenced by the demand to generate yield from liquidity mining
  • Centralized lending markets work between institutions and DeFi protocols to redirect risk to e.g., crypto funds who are willing to take on protocol risk

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