Traditional investors curious about the world of decentralized finance (DeFi) could have an accessible bridge between the two solitudes in the near future.
DeFi Technologies (NEO: DEFI) (GR: RMJR) (OTC: DEFTF) and Swiss-based Neuronomics AG signed a joint venture to build and develop artificial intelligence-based exchange traded products, including actively managed certificates and other asset-backed tokens.
The JV has Neuronomics taking the lead in managing, strategizing and optimizing the investment approach for the products using its algorithmic trading strategies. Meanwhile, DeFi Technologies will focus on getting the products listed on over-the-counter (OTC) trading markets or official stock exchanges.
DeFi will also handle responsibilities like sales, pricing, marketing and ensuring regulatory compliance.
The new proposed products will use advanced AI-influenced algorithmic trading strategies, including exchange-traded notes, exchange-traded products, actively managed certificates, securities, decentralized finance protocols and tokens.
“Our partnership with Neuronomics propels us further in our mission to innovate and transform the financial landscape,” said Olivier Roussy Newton, Chief Executive Officer of DeFi Technologies.
“By integrating Neuronomics’ superior algorithmic trading strategies into our product development, we can truly push the boundaries of decentralized finance and traditional capital markets, thereby creating a new wave of cutting-edge financial products.”
The two companies will form a joint steering committee (JSC) to oversee the company’s day to day operations. The JSC will be responsible for approval of third-party services for product development, as well as product distribution.
Shares of DeFi Technologies dipped 3.7 per cent to $0.13 on Wednesday on the NEO exchange.
A few companies offer bridges to DeFi
At its core, DeFi is a financial ecosystem built on blockchain technology, aiming to eliminate traditional intermediaries like banks and brokers.
Instead, it offers a peer-to-peer and decentralized approach to financial services, allowing individuals to access a wide range of financial products and services, such as lending, borrowing, trading and yield farming, directly through smart contracts and decentralized applications (DApps).
There are, however, a handful of companies and banks involved in combining the benefits of both worlds.
Vancouver-based tech company Wellfield Technologies Inc (TSXV: WFLD) operates through two principle subsidiaries called Seamless and Coinmama. Its Seamless Logic Software Limited focuses on the development of decentralized protocols specifically tailored for the Ethereum and Bitcoin blockchains.
Coinmama allows for monetary transfer from bank account to blockchain. It offers direct access to blockchain-powered services, eliminating the necessity for cryptocurrency exchanges or centralized custody. The platform also combines reliable digital identity and credentialing services with seamless digital asset transactions within a single non-custodial wallet.
Additionally, numerous collaborations and partnerships have arisen between DeFi projects and conventional banks, highlighting the advantages of such cooperation. These partnerships offer an opportunity for traditional banks to harness the capabilities of DeFi, all within a regulatory framework and with access to risk management expertise.
A few banks involved include BNY Mellon (NYSE: BK), which launched its Digital Asset Custody Platform in 2022, and Swiss-regulated SEBA Bank, which serves as a reliable intermediary for institutions to interact with digital assets.