SINGAPORE — (ACN Newswire) — Moonstake, the “Plug and Stake” partner of OIO Holdings Limited (listed on SGX), held a joint panel discussion with its partners Onchain Custodian and Ruby Capital, titled “Institutional Digital Asset Trends for 2021 — What else apart from DeFi”.
In this quickfire discussion, the expert panel consisting of Lawrence Lin, CEO of Moonstake, El Lee, co-founder and COO of Onchain Custodian, and Wang Pang Jun, director of Ruby Capital, addressed the
key trends going into 2021 after months of invocation and growth in the DeFi ecosystem in a volatile 2020.
The Market Is Positive On Digital Assets
As the global financial market faces an uphill climb out of Covid-19 induced economic downturn, digital assets like Cryptocurrencies have put up a stellar performance. There have been many indications pointing to an increase in adoption of cryptocurrency by the mainstream major players, such as the
likes of Paypal & Square accepting various cryptocurrencies into their system.
Locally, Singapore’s biggest bank DBS Bank is launching a crypto exchange called the “DBS Digital Exchange”. Standard Chartered Bank has also made its first foray into the digital asset exchange by partnering Zodia
Survey revealed that not only is there a higher penetration with crypto hedge and venture funds, but also in the financial advisor, high net worth individual and family office segments.
Grayscale’s Bitcoin Trust (ticker: GBTC), trades on the NASDAQ giving buyers exposure to Bitcoin while providing the traditional assurance of stock exchanges, is often touted as the de facto indicator of bitcoin’s market sentiment. GBTC market currently trades at 26.44% premium at the time of writing, showing the market demand for such products.
Investors are willing to pay a premium to gain exposure to Bitcoin without having to worry about the security around the digital assets. As for those investors who are more technology savvy, they may choose to manage the purchase and storage of Bitcoins directly.
There Are Risks To Consider
For those that are recently venturing into cryptocurrencies, the industry has many pitfalls that can be avoided simply by choosing to work with experienced partners.
“Institutions should try to approach the experts (to get into the crypto space). In this Webinar, we have a custodian solution, we have a venture fund who has been in this industry for a few years. For
myself, for Moonstake, we provide staking services for institutions. Let’s say if you are a company,
looking to be regulated in Singapore, and you want to focus on your main business objectives. You can always leave it on us as a vendor to give you technical advice and leverage on our staking as a service to provide more yield earning features to your clients,” says Lawrance Lin, CEO of Moonstake.
The rise of family offices in Asia and the younger demographics are adopting cryptocurrency as a new asset class. However, institutions that are looking to get into DeFi just for the potential yields and not Blockchain as a whole risk falling into cash grab ventures that look great on paper without a sustainable business model and use cases to back them up.
Such risks include not looking through the code to check for backdoor loops within the smart contracts. New users to this space have to evaluate Blockchain as a whole and all of their options and their risks before making an investment, not just focusing on the potential yields.
New Players Should Look To Partner With Expertise
“What is the participation of institutions in the crypto space? I think initially it still needs to rely on a centralized channel because there are few challenges in the current space, especially in DeFi. First of
all, security issues. You have seen many many hacks in the recent days. So which means they require a very high level of expertise on due diligence, on the codes and security audits to help institutions to
deposit funds into the underlying projects. As you see, the best example will be Moonstake and its experience in managing the wallet providers. Another different thing I am seeing recently is also the wallet provider and the wallet integration with a platform, as in the Moonstake model, has been more popular. They are opting integration with staking platforms to offer a one-stop staking service,” says Panjun Wang,” director of Ruby Capital.
The panel agreed unanimously that DeFi is a complex ecosystem with many factors coming into play that one has to consider when getting into it. Thus, institutions should seek out credible experts to
take away the daunting process of getting the right formula. Handing underlying assets to Moonstake’s one-stop staking platform, with Ruby Capital as its strategic advisor and Onchain Custodian as an independent custodian, is a much safer option than investing directly into a project
which makes bold, outlandish claims related to its financial returns with unvetted security measures.
Even Experts Get It Wrong
On the recent two Ethereum slashing incidents using ETH 2.0, users were being penalized (refer to 1* & 2*) DeFi and Blockchain is a rapidly growing and constantly changing market. Even experts can fall victim to scams or attacks by hackers. The CEO of a renown insurance company was the victim of a hacking incident and $8 million was lost (refer to 3*).
Finding the right expert to partner with is of paramount importance to new players. For example, working with an independent custodian to safeguard your cryptocurrencies would be ideal for both investors and the platforms that they are using.
Onchain Custodian uses the globally highest standard for security with a wallet secured by HSM certified FIPS 140-2 level 4 and has obtained insurance coverage for assets under custody.
“The keyword is TRUST in this ecosystem. Onchain Custodian can support exchanges and other platforms with a secured wallet infrastructure, to create a trusted and conducive environment for institutional investors, where Moonstake can be integrated to provide cryptocurrency staking services. In near future, custodians could be engaged by blockchain foundations and communities, as the central trust authority to build, audit smart contracts and to provide wallet infrastructure and functionalities to interact with the smart contracts,” says El Lee, co-founder and COO of OnchainvCustodian.
Here’s the video posted up on or YouTube page: https://youtu.be/Wkb-u4B12vc