Concordium and Verum Capital AG are collaborating to launch the first lab focused on developing regulated decentralized finance products: the Concordium DeFi Lab. The lab will establish a funding vehicle and allocate for $100 M in $CCD in the form of grants and investments through its community endowment program. The Concordium DeFi Lab offers everyone a one-of-a-kind opportunity to participate in the future of regulated decentralized finance.
Context for the Concordium DeFi Lab:
Over 30% of the financially-included population are currently aware of Cryptocurrencies.
As of Q2 2021, it was estimated that there were more than 300 million cryptocurrency users across the world. The average crypto ownership rate by country is now 3.9% and more than 18,000 businesses worldwide now accept some form of cryptocurrency as payment. Decentralized Finance (DeFi) represents the primary opportunity for individual investors to use their cryptocurrency holdings for financial gain. As of Q4 2021, the total value locked in the DeFi space is USD 195 B.
There is no doubt that crypto is here to stay.
Despite the incredible growth and increasingly widespread use of cryptocurrency, its primary application area, DeFi remains isolated from consumer protections. Regulators across the globe are already playing catchup, struggling to apply the supervision designed to improve traditional financial systems to this fast-growing space. There are general concerns about how to regulate this space in order to further facilitate its growth. Concordium DeFi Lab intends to alleviate these concerns and foster DeFi products that can deliver and even increase consumer protections.
The Concordium (Reg)DeFi Lab:
The Concordium Lab for regulated DeFi products will prove that the next generation of financial products, built on the back of decentralized networks, can deliver consumer protection and fulfill user needs
The Concordium (Reg)DeFi Lab will consist of three streams.
1. Thought Leadership:
Stream 1 will consist of practical research to show how new functionality from smart contracts, embedded ID, and cryptographic signatures can be created to support compliance and regulatory needs. It will deliver input to national and regional regulators as they seek to transcribe global directives into precise national law.
Stream 2 will focus on developing products as proof-of-concept. Proof-of-concepts will provide valuable precedents within the DeFi space that evidence the capability of various protocols to allow for regulatory fulfillment and oversight. It is where Concordium DeFi Labs will connect the words to actions.
3. Commercially Viable Products:
Stream 3 will accelerate the development of incubated concepts such that they become commercially viable products with a clear roadmap and market launch strategy. The priority of all commercially viable products will be regulatory compatibility and minimised centralisation.
The (Reg)DeFi Lab will move projects through these three streams to incubate and accelerate the most promising ideas in the DeFi space. Areas of specific interest for the lab include NFTs and new digital asset classes, Decentralized Autonomous Organizations (DAOs), and Decentralised Exchanges (DEXs). The lab, which is open to collaboration with any organization and sector, has already received various soft commitments from global players in the public and private sector.
According to Concordium CEO, Lone Fønss Schrøder: “Concordium is the first blockchain in the world to have an embedded identity layer at the protocol level. As such, it is well positioned to empower regulatory-approved applications and solutions intended for enterprise clients. Our specific interest in bridging the gap between the DeFi space and regulated financial solutions will come together in the (REG)DeFi Lab. With the support of Verum Capital, who have experience delivering projects with enterprise clients from all sectors and building new solutions for the DeFi space, we are confident that the lab will be a step toward a fully inclusive financial future.”
According to Verum Capital CEO, Matthias Weissl: “Verum Capital has worked closely with Concordium since its inception. The network offers tremendous benefits for applications that require identity verification and KYC processes. In the DeFi space we see legitimate protocols requiring this more and more. Our venture-building team is currently working with clients in the DeFi space and traditional industry to bring the benefits of DeFi to their users. The DeFi Lab represents a unique moment in the evolution of the DeFi space, bringing together powerful technology, deep insight, and experience, with strong teams that have solid ideas in order to drive adoption and make the space more accessible.”
A framework for proposing projects and applying for grant funding will be made available in the near future. Concordium has allocated as much as $100M worth of Concordium´s cryptocurrency, the CCD, to fund successful grant projects, such is our commitment. It will also offer exclusive access to technology and resources.
Launching the (Reg)DeFi Lab:
Together, Concordium and Verum Capital will combine their cutting-edge technology and extensive industry experience to launch the (Reg)DeFi Lab. The lab will be based in Zurich, Switzerland, a centre of global finance, and provide projects with a full spectrum of support. Technology and legal resources will be highly emphasized as projects pursue the agenda of the lab to create regulated DeFi products.