Compliance has become the mainstream direction of DeFi
In the past few years, the global financial market has witnessed the rapid growth of DeFi. DeFi brings unprecedented convenience to users by providing financial services such as decentralized trading and lending without intermediaries. However, its anonymity and decentralized nature also pose challenges for regulation and security - the lack of transparency in DeFi projects, vulnerability to hacking, and compliance risks have become the focus of regulatory agencies.
For example, regulatory agencies such as the U.S. Securities and Exchange Commission (SEC) and the European Banking Authority (EBA) are actively exploring regulatory frameworks for cryptocurrencies. According to PwC's 2023 Global Cryptocurrency Regulation Report, the number of countries implementing cryptocurrency market regulation globally has increased by 25% in 2023. The tightening regulations impose more compliance requirements on DeFi, but also lay the foundation for the long-term healthy development of the cryptocurrency market.
In this context, compliance of DeFi projects has become a mainstream direction. Many DeFi projects have started actively embracing regulation. For example, Aave and Compound have launched institutional-oriented DeFi products with admission criteria, Uniswap restricts certain specific risk exposures on the front end, and Celestia blocks users from non-compliant countries and regions like the United States during the airdrop of its TIA token. These DeFi projects and cryptocurrency platforms choose to proactively adjust their products and services to meet regulatory requirements as much as possible.
In fact, compliance not only enhances the security and transparency of projects but also attracts more traditional financial participants to enter the market. By introducing measures such as KYC and AML, DeFi projects can comply with laws and regulations while maintaining their innovation and flexibility.
The Combination of CeFi and DeFi: The Rise of Permissioned DeFi
Permissioned DeFi is a financial model that combines the openness and innovation of decentralized finance (DeFi) with the permission mechanisms and regulatory compliance of traditional centralized finance (CeFi). This model aims to address some challenges in the pure DeFi model, such as compliance, security, and accessibility issues, by introducing a certain degree of centralized management and regulatory control while retaining the core advantages of DeFi, such as transparency, permissionless participation, and smart contract automation.
As the global financial market's demand for regulatory compliance increases, the permissioned DeFi model signifies an important development direction for cryptocurrencies and the blockchain field in the future. The practices of pioneers like NEOPIN not only demonstrate the potential of the permissioned DeFi model but also indicate the direction for the maturity and development of the entire cryptocurrency market.
Permissioned DeFi provides a way to balance innovation and compliance requirements. The compliance and security of permissioned DeFi can attract more mainstream users and institutional investors, accelerate the acceptance of cryptocurrencies and DeFi in the market, and contribute to the healthy development and maturity of the entire industry.
How does NEOPIN lead the development of permissioned DeFi?
NEOPIN is committed to building a cryptocurrency usage platform that complies with regulatory frameworks and fully utilizes the advantages of DeFi and CeFi, which is called "permissioned DeFi" by NEOPIN. Through this combination of advantages, NEOPIN aims to solve the problems faced by financial platforms that rely solely on CeFi or DeFi in the past and provide a platform that is stable, secure, regulatory compliant, transparent, and accessible.
NEOPIN's goal is to become a decentralized cryptocurrency bank based on DeFi, which requires NEOPIN to not only provide comprehensive DeFi services to users, including decentralized wallets, liquidity pools, lending, and liquidity staking, but also meet the global regulatory framework's requirements like traditional finance, enhance platform trustworthiness and stability, and provide low-barrier entry methods.
Compliance
NEOPIN is currently a member of the Abu Dhabi Investment Office's (ADIO) innovation program and has developed the world's first DeFi regulatory framework in collaboration with Abu Dhabi Global Markets (ADGM). By establishing such a regulatory framework, NEOPIN becomes the first DeFi protocol to apply such a regulatory framework globally.
Security
In terms of security, NEOPIN provides users with a trusted DeFi environment by enhancing the security layers of its DeFi products and wallets. Especially in terms of cross-chain bridge technology, NEOPIN adopts advanced security technologies such as dual KMS systems and a hybrid approach of internal bridge verification signatures to prevent internal and external malicious activities.
User-friendliness
NEOPIN improves user accessibility and convenience by expanding support for external wallets such as MetaMask, Kaikas, and DOSI Vault. In addition, NEOPIN promotes user interaction with various blockchain networks by introducing diverse liquidity pools and enhanced bridging capabilities, thereby increasing platform liquidity and user trading options.
Through these efforts, NEOPIN has not only set industry benchmarks in terms of compliance and security but also made significant contributions to improving user-friendliness, demonstrating its comprehensive strength as a leading decentralized cryptocurrency banking service and commitment to future development.
Summary
With the continuous evolution of the global financial regulatory environment, NEOPIN's proactive adaptation to regulatory changes enables it to move forward in a complex regulatory landscape, which is crucial for sustained growth and innovation.
Furthermore, based on the solid foundation of permissioned DeFi, NEOPIN utilizes its DeFi products and services to address concerns about security, compliance, and usability, attracting a broader user base, such as cryptocurrency newcomers and cautious institutional investors, and positioning the project for increased adoption and sustained growth.
NEOPIN's permissioned DeFi model provides a more inclusive, secure, and regulatory-compliant possibility for all DeFi projects in the current market. In the future, the success of more permissioned DeFi projects like NEOPIN will create a development path where cryptographic technology and traditional finance coexist and complement each other in the cryptocurrency industry.