Chainlink co-founder: If regulation is improved, DeFi is expected to occupy 50% of the global market share.

Recently, Sergey Nazarov, co-founder of Chainlink, pointed out that although DeFi (Decentralized Finance) is closer to mainstream application than public perception, it still faces more real-world obstacles to truly achieving a scale comparable to traditional finance.

He believes that the current adoption rate of DeFi is only about 30%, and a clear regulatory framework will be a key turning point in driving it towards a 50% global market share.

Current market trends show that DeFi lending protocols have experienced strong growth this year, with the total value locked rising from $53 billion at the beginning of the year to over $127 billion, an increase of 72%.

The legal classification of smart contracts, the regulatory structure of liquidity, and how to implement KYC (Know Your Customer) and AML (Anti-Money Laundering) rules in a permissionless system remain challenges that regulators urgently need to address.

In addition, the breaking of the regulatory deadlock is expected to create a global ripple effect. Nazarov pointed out that as multiple economies tend to coordinate with the U.S. financial system, the progress of clearer regulations in the U.S. may trigger imitation by other countries, paving the way for traditional institutions such as banks and funds to enter Decentralized Finance.

He further predicts that when institutions have compliant channels to allocate client funds to Decentralized Finance, its penetration rate is expected to reach 70%, and by 2030, it will achieve parity with traditional finance in the share of institutional capital markets.

Currently, institutional funds are beginning to show signs of entering the market. With the continuous expansion of stablecoins and tokenized assets, a more solid capital foundation has also been established for Decentralized Finance.

However, to attract large institutions such as pension funds and insurance companies to participate fully, the market still needs to provide more comprehensive custody solutions, clearer legal frameworks, and stronger security assurances.

Overall, Nazarov's vision, although grand, truly reflects the firm belief of industry leaders in the dual driving force of "clear rules + market momentum" propelling DeFi into the mainstream.

Whether this belief can be realized ultimately depends on the decision-making wisdom of regulatory agencies, the process of institutional adoption of tokenization, and whether the blockchain network itself can achieve verification of security and stability in large-scale application scenarios.

#Decentralized Finance