The Huobi Group, the firm behind the world’s second-largest cryptocurrency exchange (as ranked by CoinMarketCap), has launched a new division focused on decentralized finance (DeFi) investment, incubation, and research.
DeFi refers to non-custodial crypto products, like synthetic stocks, lending protocols, decentralized exchanges and decentralized stablecoins.
Huobi DeFi Labs will begin with “tens of millions of dollars” in investment funds, according to a press release, and aims to help push forward the growing DeFi market.
The Singapore-based company has added Sharlyn Wu as its new Chief Investment Officer to lead the DeFi division. Wu most recently led blockchain investment as the Managing Director at China Merchant Bank International (CMBI), and prior to that spent a decade at UBS.
“Over the past two years, we have witnessed the birth and exponential growth of DeFi,” said Wu, in a release. “The width, depth, and speed of innovations are unparalleled in human history. It is exciting to see the power of permissionless economy unleashed at global scale. However, there are still many problems to be solved at theoretical and technical level.”
Wu further pointed to such benefits to DeFi as transparency and efficiency compared to the current finance system, along with the elimination of human influence (and error) on decisions. “Crypto is a perfect system for finance,” she suggested in the release.
“There is also a lot of investor education to do in order to bring crypto and DeFi to mainstream users,” she added. “As DeFi is still in its infancy, it needs collective efforts from the global community to build and grow the space together.”
Huobi DeFi Labs, which will start with a team of four research and investment professionals, has yet to announce any investments or startups that it will incubate. According to CoinDesk, CMBI invested in wallet startup Bitpie and public blockchain network Nervos under Wu’s leadership.
Huobi’s entry and planned investment into DeFi comes at a time in which the market is ballooning at a startling rate, setting new benchmarks every few days or so. Earlier this week, the DeFi market cap was nearing $9 billion… after hitting $8 billion late last week.
Tokens such as Chainlink, Band, and Nest are currently leading the DeFi charge, and Uniswap has seen a 15-fold traffic surge during the current boom. However, there is growing fear that this rapid expansion is actually fueling a bubble akin to 2017’s ICO bubble—and could prove to be rather painful if it bursts.