CEO of Mapleblock Capital, Vijay Garg, presents at Xend Finance DeFi Hackathon 2021 on "Bridging Decentralized Finance To The Real World" and what a Venture Capitalist looks for when investing in DeFi projects, bridging liquidity, bridging users, asset tokenization, and more.

1. Bridging Decentralized Finance
to the
Real World

2. Table of contents
❑ Transformation of Business Financial System
❑ Bridging Liquidity
> Assets Tokenization
> Institutional DeFi Onboarding
❑ Bridging Users
> DeFi Mass Adoption/Education
> On-chain Ownership Verification

3. Transformation of Business Financial System
• Traditional Actors vs DEFI and merger of both
• Where do we stand?
• Defi has the potential to outperform traditional finance
• Role of DEFI in SMEs

4. Bridging liquidity

5. Assets Tokenization
● What is assets tokenization?
● Type of tokenized assets
● What can be tokenized?
● Benefits of tokenization
Tokenization can open secondary market opportunities for trading and more importantly liquidity flowing into DeFi.
Opportunities:
- Faster transfers of ownership
- Open and verifiable public information of an asset
- Improved stakeholder management

6. Assets Tokenization - Ownership verification
Another interesting bridge opportunity between real-world assets and blockchain lies in creating evidence of
ownership on-chain. This has many use cases mostly in the collectible market, where rare items and art where
counterfeit items is a major problem. This is also useful incase a collectible of value is stolen, and can be
publicly reduced to zero value
For items with very high value, on-chain ownership opens up avenues for fractionalization and flow of value
from real-world art into DeFi

7. Assets Tokenization - Ownership verification
Creating NFT versions of items not only has appeal for users but for the brands themselves. Brands especially in
luxury category can be instrumental in driving adoption
- Brands get to maintain exclusivity of their products and no longer have to worry about counterfeits
- Added layers of technology has massive appeal for the younger generation who are attracted to cutting
edge technology
Eg. Funko Pops, a popular collectible toy brand launched a series of physical collectibles that come with their
own NFT. Several luxury fashion brands have also shown interest including Dolce and Gabana

8. Asset Tokenization - Challenges
- Navigating regulatory hurdles and compliances for these assets
- DeFi is still under growing stages, & infrastructure for supporting the volume of value flow is not robust
enough to support these markets
- Determining collateral value of these assets can be challenging

9. Institutional DeFi
The biggest opportunity for growth in DeFi and increasing TVL under DeFi projects lies in onboarding institutional
players. DeFi market must build regulated bridges with the traditional financials market in order to ensure stable
growth.
Challenges:
- Requirement of complex infrastructure that is both secure and compliant
- Lending and borrowing is highly inflexible often built around over collateralized loans
DeFi is built around DeFi tokens, which are unstable and in price discovery. Most of these assets do not generate real
cashflows and thus, DeFi protocols always have a default risks for being crypto only. Some projects the biggest
example being AAVE, are building liquidity pools with controlled inlets, outlets that can meet the requirements of
institutional DeFi including KYC and restricted participation.

10. Bridging Users

11. DeFi mass adoption
The second key to bridging DeFi to the real world is to focus on mainstream adoption. Financial literacy is a
growing movement amongst the younger generation. This is a good catalyst for DeFi to reach a mainstream
level of adoption.
DeFi Education:
- One of the biggest hurdles aside from the cost of operating a DeFi protocol is the lack of know-how
around safely navigating between wallets, liquidity pools, staking and other crypto native buzzwords.
- The problem is intensified as abstraction increases and market volatility scares away interested users.

12. Navigating Regulations

13. Thank you