Astra Protocol

Oct 4, 2021

2 min read

A Strong Position for DeFi

With China announcing further restrictions on cryptocurrencies, the market could see an even bigger shift towards DeFi. But the challenge remains that the SEC and other regulators will want DeFi protocols to play by the rules and fall in line with regulations. Fortunately, Astra offers DeFi protocols and users a way to comply with regulations without compromising their decentralized nature.

The recent inescapable crypto news is, of course, China declaring Bitcoin and other crypto transactions illegal. It isn’t the first time China has announced restrictions and prohibitions of digital currency. Since 2013, China has announced stricter regulations relating to cryptocurrencies but never conclusively banned them. Now it seems China is serious about its actions, citing the high carbon output from mining as a significant reason for the ban. The new laws have harmed the price of Bitcoin, and you’d be forgiven for thinking that this would also have a similar impact on DeFi — but this appears not to be the case. The Total Value Locked (TVL) as of the 4th of October was US$ 193.86 billion, which is around 10% higher than last week. Many DeFi protocols have had positive growth over the previous seven days too.

Some people in the industry, such as ETORO co-founder and CEO Yoni Assia, believe that China’s actions may well shift global crypto users “move towards DeFi”, which could be excellent for the market as a whole. DeFi has gone from strength to strength over the last year, but some hiccups have caused regulators to take notice. Many high-profile scams, hacks and other issues have meant DeFi protocols, including Coinbase and Uniswap, have come into the firing line for regulators. The SEC understandably wants to protect investors and users by ensuring protocols are legitimate and trustworthy.

At Astra Protocol, we understand that consumer and investor protection is vital to create a safe environment for everyone. That is why most big players recognize that regulations are inevitable and are generally a good thing. In the words of Binance CEO CZ, “crypto needs regulation”. Astra is the decentralized compliance platform that can perform all necessary compliance checks and KYC on behalf of other decentralized organizations. In this way, we can ensure that everyone stays within the rules whilst continuing to offer excellent products and returns. With Astra, NFTs, lending and borrowing, and other innovative platforms will all be able to continue their incredible growth.