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    Chainlink Co-Founder Sergey Nazarov Describes A Path For Decentralization As Demand For DeFi Rises

    On the heels of the release of the Chainlink 2.0 whitepaper, Chainlink Co-Founder Sergey Nazarov appeared on Yahoo Finance’s Crypto Corner with host Zack Guzman to discuss the growth of decentralized finance (DeFi) and a path for centralized banks and financial institutions to gradually offer more DeFi products that satisfy consumer demand. 

    In less than a year, DeFi has grown from around $1 billion total value locked (TVL) to nearly $60 billion TVL. “Some of these projects already are making traditional banking look obsolete,” Guzman said. 

    Nazarov described DeFi as a superior alternative to centralized finance that’s growing alongside the cryptocurrency market. With over $2 trillion currently in cryptocurrency format, $60 billion invested in DeFi is only scratching the surface. Nazarov said DeFi has “much, much further to go. Even going to $600 billion is a pretty clear next step.” 

    He predicted that more people will get involved in cryptocurrency for the primary purpose of participating in DeFi because the advantages are so compelling. For example, while centralized banks pay interest around or below 1%, DeFi pays 7% to 8% interest on the same dollar with less risk and more transparency. The only limiting factor, Nazarov said, is whether or not people know about DeFi. 

    As far as on-ramps for people who haven’t yet dipped their toes into cryptocurrency, Nazarov said many centralized financial companies that currently offer cryptocurrency products are working to further decentralize their infrastructure in order to provide a cryptographic guarantee to the people who put money into their systems.

    “What I’m seeing them doing is gradually decentralizing their infrastructure and there being a greater and greater demand,” Nazarov said. “Their user base is wanting them to create that transparency that they get from DeFi. So I think the majority of them will move into a decentralized financial product format in a relatively short time frame, because their users will want that from them.”

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