Privacy protection: the future of DeFi

On April 22, MakerDAO, known as DeFi's “ central bank '', completed its first real asset loan in DeFi (decentralized finance) in partnership with the Centrifuge financial supply chain project. The Centrifuge helped New Silver, a loan pool, create a real estate repayment and transfer pool in the Centrifuge Tinlake protocol. They financed their first loan with MakerDAO as a loan. This is an important step for DeFi. With the help of DeFi, real-world financial institutions can work around the clock with smart contracts without trust issues, offer low interest rates on loans, and access instant liquidity with minimal capital costs. . This opens the door to a trillion-dollar new market for DeFi. DeFi is widely recognized as the second large-scale blockchain application to attract the attention of mainstream financial institutions. Bank of America previously released a report suggesting that Ethereum is more bullish than Bitcoin due to the existence of DeFi. However, in its current form, DeFi is not yet ready for traditional financing. Let's take the example of Ethereum, the most accepted project in the DeFi ecosystem. There are still many disadvantages, such as high transaction costs, inefficient performance and lack of privacy protection. Protecting privacy becomes an obstacle to the development of DeFi Privacy protection is a big bottleneck, but it also presents a good opportunity for DeFi. Traditional investors, institutions and banks attach great importance to the protection of privacy. It is hard to imagine they will place their assets on a fully open platform. Confidentiality can lead to more widespread adoption of DeFi loans and faster establishment of chain loans. Existing DeFi loans are usually very high collateral because there is not enough information about users. If privacy can be protected, users can provide sensitive information such as financial information.

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