Huobi Labs announces DeFi fund

DeFi has emerged as one of 2020's fastest-growing corners of crypto, and Huobi's leadership sees an opportunity to shape its development. The exchange plans to deploy tens of millions of dollars through the new group, aiming to improve financial tools available across both traditional and decentralized systems.

Wu spent years trading on Wall Street and at UBS and China Merchant Bank International before joining Huobi. He acknowledges both the promise and the pitfalls in DeFi's rapid rise. "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," he said.

The exchange aims to build a network connecting developers and users who want access to financial tools without traditional intermediaries. Most of these platforms operate on Ethereum, where all activity records are encrypted and distributed across the network. Smart contracts eliminate the 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," Huobi said.

This automation cuts costs compared to what traditional finance requires. The company views investor education as the missing piece for widespread adoption of crypto. Huobi Labs, the exchange hopes, can serve as a gathering point for the global community to develop DeFi infrastructure and knowledge together.