Bank Of America released a new report on cryptocurrencies on Wednesday.
In the report, it is stated that the correction movements in 2022 are positive for the market and cause the focus of investors to shift from speculative movements to projects with real-world functionality.
Addressing the situation of DeFi in the table in which real-world functionality comes to the fore, the bank stated that this functionality is not evident.
The report stated that there are a number of barriers to new entry to DeFi, and underlined that regulatory barriers, poor user interfaces and limited functionality are obstacles to becoming mainstream in the short term.
The report, written by analysts Alkesh Shah and Andrew Moss, included the following statements for DeFi:
“The inability to identify users, access credit scores, meet AML/KYC requirements, regulatory challenges, use cases, and overcollateralized debt products are headwinds to mainstream.”
It was stated that Soulbound Tokens and NFTs contribute to the functionality of DeFi, but these tokens also need to mature for a while due to their very short history.
“For a positive user experience, it is necessary to develop DeFi applications. This increases adoption and use. Increased adoption and usage, if designed correctly, will result in increased revenues and local token value. That way, it can be reinvested in development.”
Bank of America analysts stated that DeFi applications are still immature and we are in the early stages of development that can take place in the next 30 years.
According to analysts, the interaction between traditional finance products and DeFi products will increase in the next 30 years, and user logins and experience will increase with the development of DeFi applications.
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