The belief that the unexpected and complete collapse of FTX will bring significant benefit to DeFi, one of the most important sectors in the cryptocurrency industry, was expressed by ARK Invest founder and CEO Cathie Wood.
As she said in an interview, the demise of FTX and other centrally managed cryptocurrency companies will benefit decentralized finance (DeFi) networks.
“We believe that DeFi will really get a boost from this because it is so obvious now, decentralisation and transparency is the solution. These networks haven’t stopped at all. All their transactions are being completed and there are all kinds of metrics that say they’re getting stronger now.”
DeFi networks will become increasingly important
According to Wood, decentralized networks (DeFi) will become increasingly important in the financial services industry following the failures of FTX, Celsius and Three Arrows Capital (3AC).
“I think what we learned because of FTX is how much more important fully transparent decentralised networks will be for financial services in the future. FTX, Celsius, 3AC were all closed networks. Opaque systems. You couldn’t see what was happening,” Wood said.
According to Wood, users of decentralized networks were able to exit their trading positions and withdraw without problems after cryptocurrency prices plummeted amid the fallout from the collapse of cryptocurrency centralized operations.
“As centrally managed cryptocurrency companies collapsed, people who were on the fully transparent distributed networks were able to exit without problems. They saw what was happening. There were margin calls for those who were over-leveraged.”
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