Huobi exchange creates a DeFi division named Huobi Labs with Sharlyn Wu at its head.
In a recent press release, Huobi announced that its new division, Huobi Labs, will be responsible for “research, investment, incubation and ecosystem creation in the DeFi space”.
Its mission is to build a crypto network for users and developers of DeFi (decentralized finance), in order to disseminate better financial instruments to both centralized and decentralized finance. The fund will be managed by the Huobi Group, which will invest tens of millions of dollars to launch the project.
The new group will be headed by Sharlyn Wu, as an investment manager, who has years of experience working and trading on Wall Street, UBS and China Merchant Bank International.
Wu sees great potential in DeFi and shows great admiration for the idea, but admits that it is not without flaws. DeFi has been one of the biggest growth areas in 2020, although some say that growth in this space has become unsustainable.
“Over the last two years, we have seen the birth and exponential growth of DeFi. The breadth, depth and speed of innovation are unprecedented in human history. It is exciting to see the power of the unlicensed economy growing worldwide. However, there are still many problems to be solved at the theoretical and technical level”.
Huobi’s leaders believe that investors lack the education needed to push for the mass adoption of crypto and DeFi. The global community must therefore come together to support the initiative, with Huobi Labs as a catalyst.
What is DeFi and what does it do?
DeFi is designed to replicate the functions of traditional financial instruments. Users can borrow, lend and invest as they do with a traditional financial institution, such as a bank, but without any other intermediary.
Most DeFi platforms run on the Ethereum blockchain; all data on the network is encrypted and distributed, hence the “De” of DeFi. Thanks to intelligent contracts, all actions can be facilitated autonomously, which reduces the costs related to financial engineering.
Thanks to automation, there is no need for a professional “to examine the risk parameters, he will say that this model without trust deserves better pricing because it removes the risks and uncertainties caused by human behaviour”, according to Huobi’s press release.