With the development of DeFi, is it possible for a new BlackRock or Vanguard fund to emerge in the crypto industry?

As of 2022, global assets under management (AUM) are estimated at $126 trillion. Since the global wealth in financial markets is $329.1 trillion, approximately 38.31T of all wealth is managed by the global asset management industry.

However, the current scale of managed crypto assets is only a few tens of billions of US dollars.

Maybe it accounts for about 3% of the size of crypto assets?

Traditional asset management relies heavily on trust

The asset management industry, like many other financial sub-industries,Trust is the core foundation.

The so-called asset management means that investors give their money to professional asset management companies, and then these companies manage the money on behalf of investors. The money can be invested in stocks/real estate/bonds, etc., and then management fees and performance shares are charged.

In traditional asset management business, investors need to go through a series of complicated contracts, compliance audits and other measures before transferring money to asset management companies. These measures, at least in form, give customers a relatively largeSafetyFeeling: Money isSafetyYes, still under control.

In the traditional asset management industry, big-name asset management companies with a long history always have great advantages over emerging companies in terms of fundraising and brand image.

However, there have been big cases like Madoff in the market, but overall, giants like BlackRock and Bridgewater (there were rumors a few days ago) are still trusted by investors.

Crypto asset management has a bad track record

Asset management is such a large industry that the crypto community will certainly not let it go.

Yearn, which was very popular in the past few years, claims that customers can obtain an annualized return of up to 1200%.

Investors can conduct various activities such as yield mining/liquidity mining/staking, and can also engage in variouscontractLeverage, all of which can becontractAutomatically execute...

However, most of the time it has become a game of seeing who can run faster.

It's not just the asset management industry that lacks trust, there's a lack of trust in all walks of life in the crypto community.

From the ancient MtGox to the earth-shaking FTX and Terra in the past two years, we can see that the current crypto industry is still a mixed bag. (There are obviously more fish than dragons, for more cases, seeFeel the SEC's enforcement of the crypto industry)

The original intention of DeFi is to create a financial landscape that is free from intermediaries and useBlockchainintelligentcontract的力量，赋予用户对其资产的完全控制权。

However, the encryption circle, which originally relied on "technology to ensure trust", is actually full of distrust. To outsiders, it can even be equated with "fraud group".

In the circle,“Not your keys, not your coins”It is even regarded as an investment motto by many professional investors.

Apart from a few asset losses caused by technical loopholes, the vast majority of losses are actually caused by centralized institutionsdefiA pit dug under the guise of (decentralized finance).

Traditional and encrypted are accelerating integration

Over the past few years, DeFi asset management has actually undergone a major transformation.

Initially focused on maximizing returns on individual assets, the emphasis has now shifted to creating robust and risk-resistant pools of assets that meet the needs of traditional users.

Traditional asset management giants, led by BlackRock, are also investing in the crypto industry, and Grayscale has launched a Bitcoin Trust Fund early on. (For more information, seeIn addition to BlackRock, what plans do other financial giants have?)

If nothing unexpected happens, after the Bitcoin spot ETF is approved, there will be a large number of otherTokenETFs will also be approved one after another. By then, with the help of the channel capabilities of traditional financial institutions, a large share of crypto assets will be controlled by asset management institutions.

However, the ETFs launched by these traditional institutions are still centralized financial products. However, when investors review the underlying assets of these ETFs, they will definitely trust the records of the custodial addresses more than the audit reports of so-called professional institutions.

However, to achieve true integration, there must be breakthroughs on the settlement side.

BlockchainThe biggest difference between trading and traditional trading is:

On-chain transactions are settled in real time, while traditional transactions must be settled through authoritative institutions.

Authorities are also stepping up their adoption of distributed ledger technology (seeIs this a conspiracy of the United States? A detailed explanation of the tokenization plan of the Federal Reserve and Swift), to make up for the technical shortcomings. If the settlement end can also be confirmed on the chain, and there are a large number ofTokenIf assets are digitalized, the boundaries between traditional asset management and on-chain and encrypted asset management may be very blurred in the future.

The crypto world has its own cultural characteristics

The crypto world is full of stories of getting rich overnight. Compared with other markets,cryptocurrencyInvestors have different mindsets and cultures.

As a traditional investment tycoon, Buffett is known as the "stock god" for his average annualized return of more than 10%.cryptocurrencyInvestors and enthusiasts will be satisfied at least only when they double their investment.

The preference for high yield among investors further complicates matters because it conflicts with the long-term engagement that is essential to asset management.

(To be honest, I entered link and cfg at the bottom, and now it's a bit overwhelmed that they keep doubling up.Dogim dog inscription protrudes! Up to 50 times in one night! Have you participated?Once you get on board, you will have a full understanding of the mentality of crypto investors)

Thanks to various smart contracts, automated profit strategies, and the endless emergence of new ecological gameplay, the cryptosphere has actually built a casino that is more fun than Wall Street. In addition to profits and novelty, people are attracted to the cryptosphere because it is interesting and has its own culture.

If some bigwigs get involved, it will trigger a collective carnival in the crypto circle, and it will become a force to resist financial hegemony.

In a way:

The issuance model of U.S. Treasury bonds is not fundamentally different from liquidity pledge;

The operating model of modern banks is far less transparent and reliable than that of stablecoin issuers;

The printing mechanism of sovereign currencies has been despised by Bitcoin bosses for many years. . .

With something like Dogecoin, it started out as a joke, but as more people played it, it became a cultural belief.

Even the founder of Doggo didn't expect it to develop to this point.

It can be considered a decentralized version of "Occupy Wall Street".

Non-custodial, permissionless, and DeFi asset management seems to be more in line with the tone of the crypto circle.

If it is run by a KOL with a good reputation, it may lead the next paradigm shift towards the democratization of financial markets. (This seems to be MakerDao?)

This shift will allow a broad range of investors around the world to access global financial markets.

The Yearn project currently manages approximately US$300 million in assets, and still adopts the principle of requiring permission when issuing funds. Perhaps in the short term this is the development direction of Web3 asset management.

Is “non-custodial fund” the key to future breakthrough?

Non-custodial means that at any time during a transaction or service, the platform or a third party does not have custody or ownership of the funds or assets. The entire process usually occurs through smart contracts.

This is in contrast to a custodial service, which takes possession of a user's funds or assets for safekeeping, management, etc.

Hosting services are currently being restored andSafetyIt has advantages in terms of allowing reputable centralized services tostealstealor malicious activities, since most of them are insured.

非托管服务具有智能合约风险，其中可以利用漏洞或容易出错的代码来steal窃资金。此外，如果用户失去了私钥或进入账户权限，他们通常几乎无法取回他们的资金。

If asset management companies can manage users' funds through technical means without having to take custody of them, many regulatory issues can actually be resolved.

For example, smart contracts can implement investment strategies through oracles or other preset logic and ensure that the profits generated for depositors who follow the asset management company's strategy will be automatically and appropriately distributed to both parties.

As self-sovereign identity (SSI) becomes more popular among regulatorsXiaobai Navigation，成熟的管理者甚至可以创建只有现有客户才能访问的本地策略；通过这种方式，他们可以从cryptocurrency的所有好处中获益，而不会增加监管风险敞口。

Decentralized in practiceexchange1inch and Uniswap, lending services such as Maker and Compound, as well as the aforementioned yearn and the well-known project solv all adopt non-custodial solutions.

However, in the asset management industry, the biggest obstacle to non-custodial solutions currently comes from supervision:

In the 1940s, the United States passed the Investment Company Act, which stipulated that fund managers could not manage their own funds and had to seek qualified third-party custodians that met SEC regulations.

The final solution may be for a custodian approved by the SEC to launch a non-custodial solution, or for non-custodial technology to be recognized according to certain standards.

However, let’s leave the regulatory game to the American tech giants first.

Perhaps influenced by this, crypto asset management now looks like this:

Compared with the scale of traditional asset management, the smaller the current market size, the more opportunities (pitfalls) there will be in the future?

The article comes from the Internet:Will asset management with a scale of over one hundred trillion be revolutionized by DeFi?

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