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Replacing Intermediaries Doesn’t Directly Improve Finance

When it comes to financial products and solutions, almost everything comes with a catch, be it exceptional returns on investments or low financing rates. Decentralized finance (defi) is no exception.

Defi has gained immense popularity because it sought to remove traditional finance’s (tradfi) inherent problems and downsides. While there is no denying that the emergence of defi has indeed lowered access barriers to financial solutions, we can’t overlook the uncomfortable reality that defi is becoming, at least to an extent, the same as tradfi, with a ‘decentralized’ tag.

The Blurring Line Between Defi and Tradfi Lending

In the traditional system, anyone who wants to borrow funds from banks or private lenders must furnish their credit score. If the score meets the criteria, the loan is approved at a fair rate. If the credit score is low, the borrower might need to compromise for higher rates. In some cases, the lender may also ask the borrower to post collateral for the loan.

While defi exchanges central authorities with a peer-to-peer system, accessing products like defi lending requires borrowers to post substantial collateral, often higher than the total amount they want to borrow, called over-collateralization. Moreover, entering the defi market and using its financial products demands an understanding of blockchain technology and cryptocurrencies — knowledge possessed by a fraction of the global population.

Defi lending initially set out to facilitate “true decentralized lending” whereby anyone in need of capital could obtain a loan without any middlemen. Unfortunately, that’s not what today’s defi lending resembles. It has effectively evolved into another mechanism for existing digital asset holders to generate yields by putting what they already own to work. Today’s defi is not empowering the global unbanked.

As such, it seems that defi is more lender-oriented and not as inclusive as advertised. Take, for instance, the parabolic growth of the defi lending ecosystem in recent months. The leading defi lending platforms and protocols have accumulated a total value locked (TVL) of more than $60 billion.

Galactic Arena recently launched its Initial Ape Offering (IAO) on Ape Swap. The PVP-based NFT battle arena allows users to import NFTs, stake them, and battle against other players.

The integration will allow players to fight it out against other users’ apes. Additionally, gamers can also place crypto-based wagers on the game. Finally, with Galactic Arena, players can migrate and update NFTs.

Just a few days back, Thiel had described the high crypto prices as “the canary in the coal mine,” saying it is a sign that the “decrepit … regime is just about to blow up.” At the time, he also expressed his feeling of being “underinvested in it.”

This time as well, Thiel said he regrets not buying more Bitcoin earlier at cheaper prices.

Thiel, who co-founded PayPal and Palantir Technologies, criticized the Federal Reserve for not addressing inflation and failing to recognize its seriousness.

Huobi Group, the company operating one of the world’s largest cryptocurrency exchanges, is launching its own nonfungible token (NFT) marketplace, following in the steps of other major crypto exchanges.

Huobi has rolled out a trial for Huobi NFT, an NFT marketplace allowing users to buy and trade NFT artwork and collectibles in numerous sectors, such as games, art, animation and music, Huobi Group announced on Monday.

According to the announcement, the launch marks a milestone in the extension of Huobi’s metaverse strategy, a concept combining multiple technologies such as virtual reality to bring a 3D virtual environment featuring activities like online gaming and others.

As part of the strategy, Huobi in September launched a $10-million fund to invest in early-stage projects involved in GameFi, a mix of gaming-focused NFTs and decentralized finance. The NFT marketplace will also play a big role in the company’s global expansion strategy as it adds a new asset class to its portfolio of blockchain and cryptocurrency-focused products.

“Huobi has been working on projects in the GameFi and NFT markets, so the launch of the Huobi NFT marketplace has been in the works for some time. We look forward to introducing this project to our global community,” Huobi Group director of strategy Jeff Mei noted.

A spokesperson for Huobi Group told Cointelegraph that Huobi’s NFT platform is being trialed on Huobi's decentralized public chain, the Huobi Eco Chain, also known as Heco. The NFT platform is not integrated with the exchange's native cryptocurrency, Huobi token.

As Heco is compatible with the Ethereum Virtual Machine, the platform could potentially be integrated with other NFT platforms that run on the Ethereum blockchain. The firm doesn't have any specific plans on this yet, a spokesperson added.

The news comes shortly after social media giant Facebook officially changed its company name to Meta, marking its first major rebrand and increasing ambitions beyond social media. Apart from broad plans for ​​its metaverse, Facebook has also been struggling to launch its own cryptocurrency, now named Diem.

Related: Axie Infinity, Decentraland and ‘metaverse’ cryptos rally after Facebook rebrands to Meta

In trialing the NFT marketplace, Huobi joins a growing race of global crypto exchanges introducing NFT platforms. Coinbase, the largest crypto exchange in the United States, announced plans to launch its own NFT platform in mid-October. Crypto exchange FTX previously introduced its NFT marketplace for U.S. customers in September.

Binance has temporarily disabled all withdrawals from the platform due to technical issues. According to the Twitter announcement, the team is already working on the problem.

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At press time, the technical reason has not been specified. The issue may be tied to the problem with backlogs caused by network congestion.

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Currently, most exchanges are facing large funds outflows, which creates a significant load on the exchange's engine and servers. A more detailed report on the problem is yet to be released.

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