The Chicago DeFi Alliance (CDA) announced that it will launch a Grant Program for Decentralized Finance (DeFi) project developers this month.
The alliance was formed in April 2020 by Chicago-based finance companies. It includes the fintech firms Jump Trading, Cumberland DRW, CMT Digital and Volt Capital. Alameda Research, FTX, Electric Capital, Dragonfly Capital, Hashed and Delphi Digital have recently joined the alliance. The CDA was created to enable DeFi projects to work effectively with financial companies, traders, and OTC platforms, and to help decentralized startups create products tailored to the needs of liquidity providers.
Volt Capital co-founder Imran Khan and CDA partner Qiao Wang said the program will run for about eight weeks and will be modeled on the startup accelerator Y Combinator. CDA has already received over 100 applications from early stage startups, but only seven projects will be selected from all candidates. Each development team participating in the initiative will receive $ 120,000 in funding. CDA plans to run two such programs this year.
“Commissions are high, liquidity is low, and the user interface needs to be improved. All this may seem frivolous. But history knows many examples when successful technologies were created from a mere trifle. DeFi has all the basic parameters to be a viable alternative to the traditional financial system, ”said CDA partner Chao Wang.
However, despite the rapid development of the industry, some experts believe that the prospects for DeFi are not at all so bright. For example, Quantstamp CEO Richard Ma is confident that security concerns could hinder further growth of DeFi. He suggests focusing on real-time tracking of vulnerabilities, increasing transparency and implementing insurance schemes. In addition, the founder of the Waves Association, Alexander Ivanov, believes that the excessive excitement around DeFi can damage the long-term development of the industry.