CME Group Futures Ether is coming on February 8, but there is another reason to hope for a better future for Ethereum. It doesn't come from the institutional which are more present through the time, but from the GameStop nightmare: retailers.
As Wall Street is observing the retail frenzy, Main Street hopes it is not the last one as some financial analysts think another coup like this one could be possible. U.S. Congress agrees with Wall Street: there is a need to regulate the retailers. One of the first one to go higher is Sen. Elizabeth Warren, who wants more regulation and is pushing the U.S. SEC to investigate the frenzy behind Robinhood traders.
However, this article is not a criticism of U.S. Congress policy nor an opinion on the issue.
Why talking about GameStop and Ethereum? The response is simple: DeFi. Decentralized Finance is an area ruled by smart contracts therefore by code. DeFi is an Ethereum revolution which pushed a summer bubble with use cases such as Sushiswap 🍣. DeFi is not just this use case: from flash loans to excessive gas fees.
With Robinhood and its service, retailers felt safe to invest, but, under scrutiny and a likely investigation, DeFi could become this safe heaven. For instance, Terra proposes an app called Mirror where there are tokenized stocks such as Alphabet, Facebook and Amazon. Compound, Aave and Maker propose lending and borrowing with high yields and better than traditional banks.
DeFi has become a mature market on the crypto space, but it is a primitive one for institutions. BlockFi, a centralized lending and borrowing crypto service, is proposing services to institutions.
It's true. This primitive market is not regulated at all, but it could be in the near future as Ethereum is going on the institutional market. Furthermore, another blockchain, Cardano, is working with Swiss authorities to create a regulated blockchain. Cardano could be a start as the blockchain has the goal to attract many developers to create smart contracts. Cardano is a challenger of Ethereum with Polkadot.
To conclude, DeFi is at peace with a loophole for its users, being not regulated yet doesn't mean it won't be. However, DeFi remains an alternative to Robinhood and its consequences. Retailers could feel safer to trade tokenized stocks or to do yields farming. But Sushiswap, such as Bitmex, show regulators could have its neck on it sooner or later.