Huobi introduces DeFi fund — appoints senior banker to lead

Mega exchange, Huobi, is creating a DeFi division named Huobi Labs with Sharlyn Wu as its head

In a recent release, Huobi announced that its new division, Huobi Labs, will be responsible for, “research, investment, and incubation and ecosystem building in DeFi space”.

Its mission is to build a crypto network for DeFi (decentralised finance) users and developers, to spread better financial instruments to both centralised and decentralised finance. The fund will be managed by the Huobi Group, which will invest tens of millions of dollars to initiate the project.

The new group will be led by Sharlyn Wu acting as Chief Investment Officer, who has years of experience from working and trading on Wall Street, UBS and China Merchant Bank International.

Wu sees great potential in DeFi and shows great admiration for the idea, but he does admit that it is not without flaws. DeFi has been one of the biggest growth areas in 2020, even with some saying that growth in the space has become unsustainable.

Wu stated:

“Over the past two years, we have witnessed the birth and exponential growth of DeFi. The width, depth and speed of innovations are unparalleled in human history. It is exciting to see the power of permissionless economy unleashed at global scale. However, there are still many problems to be solved at theoretical and technical level.”

Executives at Huobi believe that investors lack the education needed to push for the mass adoption of crypto and DeFi. Therefore, it needs the global community to come together to support the initiative, with Huobi Labs as the catalyst.

What is DeFi and what does it do?

DeFi is built to replicate the functions of traditional financial instruments. Users can borrow, lend and invest like they can with a typical financial institution, such as a bank — but without any other intermediary.

Most DeFi platforms run on the Ethereum blockchain; all the data on the network is encrypted and distributed, hence the “De” in DeFi. Using smart contracts, all actions can be autonomously facilitated, which cuts down on the costs involved with financial engineering.

Through automation, there is no need for a professional to, “look at the risk parameters, they will tell that this trust-less model deserves better pricing because it removes the risks and uncertainties caused by human behaviors,” according to the release from Huobi.