DeFi can breathe new life into traditional assets

cointelegraph.com:

In his monthly crypto tech column, Israeli serial entrepreneur Ariel Shapira covers emerging technologies within the crypto, decentralized finance and blockchain space, as well as their roles in shaping the economy of the 21st century.

Traditional finance experts are warming up to the idea of crypto, but outlandish headlines of record-breaking hacks and overhyped projects don’t necessarily reverse its bad rap. Unfortunately, we’ve seen the total value locked in decentralized finance (DeFi) recently nosedive, which isn’t exactly helpful in changing skeptic’s minds.

While crypto is much more than its lows, those in the centralized finance (CeFi) space aren’t necessarily jumping to accept this idea at face value. To alleviate their qualms, projects should integrate tried and true CeFi qualities with more novel practices. This will allow neophytes to dip their toes in the DeFi world as a trial run — and expand the usability of the financial instruments to a whole new level.

Many worry about crypto’s volatility,specifically fearing that it is not backed by anything tangible like gold and believing that crypto will lose value over time. This likely comes from the comfort and familiarity of fiat, which technically isn’t backed by anything tangible either since the end of the gold standard, but has the backing of a trusted centralized entity.

These fears perfectly encapsulate how the cross section of DeFi’s and CeFi’s respective strengths can ease investor uncertainty to usher in a new class of people into the crypto sphere.

Tokenization of commodities enables blockchain-based ownership of a physical asset, which is essentially just a decentralized version of an already-existing practice in traditional finance. Tokenized precious