Decentralised finance (“DeFi”) projects aim to replicate basic financial services such as lending and trading using software programs known as blockchains, cutting out traditional middlemen. Backers of DeFi projects are confident that, in the long term, the applications stand a good chance of rewiring the financial system. Grey areaBut traditional venture capital firms, including Sequoia Capital, have largely avoided investing directly in DeFi projects, partly because of concerns about how they would be treated by regulators, according to people familiar with their thinking. Paradigm and Polychain Capital, two large investors in DeFi projects, have both received investments from Sequoia. While DeFi groups often begin as companies that raise traditional venture capital, the real payout comes when the projects issue large pools of tokens.

Source: The Irish Times June 10, 2021 04:07 UTC