Photograph by Will Crooks
ARK Invest founder and CEO Cathie Wood predicts that the collapse of the FTX crypto exchange will be a boon for DeFi.
In an interview with Yahoo! Finance founder and CEO of ARK Invest Cathie Wood said that the collapse of FTX and other similar crypto firms will boost decentralized finance (DeFi) networks. This will give a strong impetus to investors to only use decentralized crypto exchanges that have always completed their transactions.
“We do believe DeFi will actually get a boost coming out of this because it’s so obvious now – decentralized and transparent is the way to go.
Those networks didn't skip a beat. All of their transactions were completed, and there are all kinds of metrics saying they’re getting stronger now.”
Wood said that decentralized networks will become increasingly important in the financial services industry following the bankruptcy of FTX, crypto lender Celsius and digital asset hedge fund Three Arrows Capital (3AC).
“I think what we’re learning because of FTX is how much more important fully transparent decentralized networks will be to financial services going forward.
FTX, Celsius, 3AC were all closed networks. Opaque systems. You couldn't see what was going on.”
Wood points out that decentralized network users were able to close their trading positions and withdraw funds without issue after cryptocurrency prices plummeted amid the aftermath of the collapse of centralized cryptocurrency companies.
“And what happened, as they [centralized crypto firms] were going down, the people who were on the fully transparent distributed networks were able to get out scot-free.
They saw that was going what was going on. There were margin calls for those who were over-leveraged.
But the system worked. It didn't skip a beat. Those other companies went out of business.”
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.
