The year 2021 marks the official debut of a joint industry between centralized institutions and DeFi protocols. Various companies integrate decentralized finance offerings into their ecosystem to remain competitive. Huobi Global and Kava have set a bold example.
The Appeal of Kava
As one of the few cross-chain DeFi protocols in existence today, Kava makes it straightforward to benefit from decentralized finance without having to convert one's assets. Natively supported tokens include XRP, BNB and - with the help of Huobi DeFi Labs - HBTC. Initial support for this integration resulted in selling out all available space within the first five minutes.
The integration of Kava into Huobi Global is no random choice either. Both teams have been working together for a while, yet Huobi Global deems it essential to go beyond just listing new DeFi tokens on its exchange. Providing users with direct access to these new products and services is a significant step forward.
Unlike other DeFi platforms, Kava has gained the trust of centralized institutions, including cryptocurrency exchanges. Catering to this group of users and partners is crucial to promote the benefits of decentralized financial solutions. Its financial products suite provides lending, borrowing and earning opportunities to all users who hold cryptocurrency.
Huobi Global, as a centralized exchange, acknowledges the accelerating growth of DeFi. As fiat and digital currency management and distribution are changing toward the dawn of a decentralized economy, it is essential to help facilitate any industry growth. The integration of Kava helps support the building of underlying infrastructure for current and future DeFi applications.
An Essential Market Shift
Today, most cryptocurrency users keep their funds on a crypto exchange, such as Huobi Global. Providing these users with direct access to decentralized finance creates a new paradigm. Rather than leaving the exchange environment, these users will experience lending, borrowing and earning directly. By going down this path, Huobi continues to invest directly into the DeFi space, both technologically and from an accessibility point of view.
Kava Labs co-founder and CEO Brian Kerr adds:
"Here at Kava we have data that shows 93% of crypto users do not custody their own keys and do not participate in DeFi earning opportunities - this is due mostly to technical competence. What this tells us is that the key to adoption in the future is meeting the 93% not currently in DeFi where they are, and in a way they are comfortable with."
It is not unthinkable there will be further collaborations between centralized exchanges and DeFi protocols. Since the world's leading digital asset organizations are going forward with the integration, it is plausible to assume this trend will grow in momentum.
Lowering the barriers to making DeFi as accessible as possible is paramount. Rather than switching between platforms, everything should be within reach through a few mouse clicks. Creating a superior experience compared to the current clutter will pave the way for much broader adoption of cryptocurrencies and services involving these assets.
Conclusion
With major centralized exchanges integrating DeFi solutions directly, an important signal is being sent. It is no longer a matter of replacing centralized finance but rather borrowing some of its elements and combining those with DeFi offerings. Finding the middle ground between both worlds will help both industries thrive and cater to a new audience.
Centralized institutions, such as exchanges, will benefit from this approach too. As their list of available DeFi offerings continues to grow, they will likely note an increase in crypto-assets flowing through their systems. Integrating solutions such as Kava directly into an institutional platform is seemingly the right path forward.