OKEx & # 39; s Lennix Lai: Passive Revenue in Crypto is the New Solution to Earn


First, there have been rental charges. Then pursuits got here. As fashionable civilization evolves, individuals are at all times discovering new methods to generate profits with out really producing and even doing a lot. This idea is thought at this time as & # 39; passive revenue & # 39 ;. Technological progress has additionally elevated the importance of passive revenue.

At this time, folks can declare YouTube advert income, dropshipping and even on-line programs as their favourite strategy to earn passive revenue. Lennix Lai, director of monetary markets at OKEx, believes there’s one other methodology so as to add to this ever-extensive listing: crypto strike. He was a keynote speaker on the Blockchain Financial system 2020 convention in Turkey, the place he defined why crypto is a perfect strategy to earn passive revenue. He additionally informed Cointelegraph what the advantages can be of a extra mature blockchain-based monetary system.

Cointelegraph: What do you suppose is the following logical step for blockchain and crypto?

Lennix Lai: The rising variety of cryptocurrency pockets customers is creating a complete new ecosystem. First, there might be regulators and central banks. Persons are coming into this new ecosystem by first storing their digital asset wallets on their cell phone or laptop.

Then the ecosystem begins constructing decentralized purposes, DeFi initiatives or stablecoins. In the mean time we’ve got about 35 million cryptocurrency customers. However after stablecoins issued by the central financial institution, we'll discuss billions of customers.

We step into the following era. I believe the following era is now underway with stablecoins issued by the nationwide financial institution. I might say it would develop cryptocurrency consumer base about 10 occasions or extra.

CT: Evidently the following era of blockchain is "blockchain for everybody", not simply corporations or exchanges?

LL: Bitcoin is the primary use case to make use of the blockchain idea. With out Bitcoin, blockchain is just a decentralized database. It’s merely a database language. We simply wish to retailer data domestically. However including the cryptography factor to this decentralized database has resulted within the creation of Bitcoin. (…) However nonetheless, it was a really "geeky" mission, actually targeted on heavy believers and visionaries.

For the following era of blockchain, we should first maintain the great thing about blockchain, unchanging, scalable, open to all, tremendous low entry stage by way of transaction prices, tremendous excessive effectivity. Subsequent, we have to deal with the technical problems with blockchain by way of safety, scalability and decentralization.

On the similar time, we should additionally take account of governments and regulators. They will need to have a superior supervisory authority that may see the transactions throughout the blockchain. That's why we anticipate governments and regulators to be a part of this decentralized ecosystem that we construct with OKChain.

CT: How do you utilize crypto for a passive revenue idea?

LL: The mix of cryptocurrency and DeFi creates another means for customers to earn passive curiosity that was beforehand not attainable. As a result of historically you’ll have to deposit with the financial institution or reserve a custodian to save lots of curiosity. You should purchase bonds and you may borrow somebody with some curiosity. However that could be a restricted means and it contains many analysis standards. Generally getting a mortgage is difficult, particularly for small and medium-sized companies.

Initially, Crypto introduces a means with out permission for passive curiosity. Everybody can borrow and borrow safely throughout the protocol in line with the design of a sensible contract. You possibly can borrow and borrow with out the financial institution in between.

This considerably erodes the barrier to entry, particularly the non-bankless inhabitants of the world, which has no entry to the standard banking system. Proper now we’ve got a couple of fifth or a sixth of the world's inhabitants with none financial institution assist. They can’t open a checking account in any respect for varied causes.

However proper now we’re speaking a couple of protocol that may serve even a rural inhabitants all over the world, and not using a financial institution. That could be very thrilling as a result of we are able to now create a imaginative and prescient that claims that your cell phone turns into your financial institution. With out financial institution accounts. You are able to do all the things you usually can with a financial institution by means of your cell phone with a cryptocurrency pockets. You possibly can pay, obtain cash, earn curiosity and make an funding – all decentralized.

CT: Do you suppose passive revenue through the use of crypto might be a preferred strategy to earn sooner or later?

LL: Strike is a singular passive revenue profile that would by no means be obtainable within the conventional banking market. There isn’t a vital product in banking and finance. As a result of what strike does is principally: you deposit your token in a sure protocol. That token will then assist to make sure the steadiness of your complete community.

By betting, you grow to be a part of the community's shareholders / validators / protectors. You might be a part of the community itself.

The curiosity yield is presently a lot larger than with conventional banking. So it may be a very popular subject. As a result of one of many main advantages of adopting crypto, along with simply transferring and defending belongings, is incomes passive curiosity.

CT: Do you may have every other plans to make crypto obtainable to a a lot bigger viewers?

LL: We should first make crypto easy. In the mean time, all of the expertise you hear, similar to blockchain, sensible contracts or non-public keys, remains to be tremendous difficult. A lot of the blockchain business is made up of high-end builders. And the world of merchants wants very advanced derivatives that we provide at OKEx.

However in case you are speaking a couple of mass viewers, we’ve got to make it quite simple. We’re not speaking about non-public keys or every other tough idea. We intention to launch a brand new product that any common consumer can join in, purchase a cryptocurrency with their native forex and earn passive curiosity by staking cash.

CT: The extra blockchain-based financing evolves, the extra it resembles the standard monetary sector that all of us like to hate. How is the "blockchain financial system" completely different from the present centralized monetary system?

LL: That's an awesome query. Can we now put all the things on the blockchain that’s within the central system? I don’t suppose so. First, the centralized system presently works fairly effectively. It may be gradual at occasions, it is probably not very environment friendly. However the magnitude is so nice, with volumes of trillions of {dollars}. It’s presently a strong monetary system.

The elevated regulation additionally makes the standard market far more environment friendly than earlier than. Lots of the laws we’re speaking about are about management, about disclosure. For instance, the financial institution should disclose their stability sheets and the safety agency should disclose buyer entry, the fund supervisor should disclose the purchase and promote orders, and so forth.

When you concentrate on the blockchain idea, you don't want a supervisor to play this function as all the things could be executed on a technological foundation. It’s unchanging. It’s clear. Everybody can see it, along with supervisors. Each motion and transaction is registered within the chain. In abstract, we are able to serve precisely the identical regulatory objective with a fraction of the prices that regulators presently spend.

So with blockchain expertise, the price of sustaining a wholesome monetary system can be a lot smaller and serve the identical objective and objective. Due to this fact, I consider that the standard monetary world will ultimately use blockchain expertise to scale back prices and enhance effectivity, particularly by way of regulatory processes and cross-border transactions.

The interview has been shortened and edited for readability.

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