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Balancer, Head of Growth: Defi will replace traditional finance and Bitcoin will remain the major reserve asset in the crypto market

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Jeremy Musighi, Balancer's head of growth, thinks DEFI is definitely the future of finance, but the biggest challenge now is the talent shortage.

Balancer growth chief: DEFI will replace a lot of traditional financial services

Interviewee: Jerblockquotey Musighi, head of growth at Balancer

Interview and post: George Georgiev, Cryptopotato analyst

Compile: Babbitt

Cryptopotato spoke with Jerblockquotey Musighi, head of growth at Balancer, about the bull market in 2021, Ethereum 2.0, and DEFI as the future of finance.

Balancer was one of the pioneers in the DEFI field and is a core building block of its infrastructure. The agreement enables efficient trading by pooling crowdsourced liquidity from investors' portfolios, while also determining the best price.

Data from Token Terminal shows that in the past year, the platform in terms of locking in total value peaked at more than $360 billion before the latest overall market decline in May. Its TVL has increased 450% in just five months since January 2021.

Balancer 增长主管：DeFi 将取代传统金融，比特币仍是加密市场主要储备资产

This is also due to a significant increase in user engagement in the broader DEFI market, which has seen spikes in user numbers and other metrics for many protocols.

During the Bitcoin 2021 conference in Miami, Cryptopotato had a chance to talk with Jerblockquotey Musighi, Balancer's head of growth. We discussed the past, present, and future of Defi and Balancer, as well as other interesting and important topics in the industry.

A bull run in 2021: Bitcoin has been leading the development of the cryptocurrency market

Defi saw massive growth in 2021. At one point, the total value of deals locked up across the industry peaked at more than $80bn -- a fivefold increase since January.

We asked Musighi if he thought the overall bull market was the main reason behind it, or if it was just an organic transition.

"I think the market will realize how big an impact Defi is going to be, and it's going to continue to exist, and I think it brings further awareness and education about how Defi has replaced a lot of our traditional financial services and products."

Musighi believes this is part of the reason behind the bull market. However, Musighi also recognizes that this is a cycle.

"Investors recognized DEFI's opportunity and poured a lot of money into it because they knew how much growth it was going to have. That's one of the things that drove the bull market. At the same time, the bull market and the rise in prices brought more attention from other outsiders and other people who had not been involved, and they got involved."

However, he argues that bitcoin has been leading the cryptocurrency market, which "has always manifested itself as investors tend to rotate their investments from one vertical to another."

Balancer's head of growth also said that "Bitcoin is still being used as the primary reserve asset for cryptocurrencies".

Balancer 增长主管：DeFi 将取代传统金融，比特币仍是加密市场主要储备资产

Balancer: "The Most Customizable AMM"

Another thing we're curious about is why Balancer lags behind other protocols like Uniswap in terms of TVL.

Musighi told us that the product fit and the pull of the Defi agreement are due to a number of factors.

"What is clear about Balancer is that it has the best technology in the field and it is also the most flexible and customizable automated market maker (AMM) available. Balancer is native to DEFI because it is very flexible and can be used in so many ways that it is almost a general-purpose technology."

However, Balancer has its own drawbacks. During its short history, the deal was run almost entirely by "brilliant technical people," and it didn't have many marketing people. "In fact, for a long time, we didn't even have any marketing people," says Musighi.

This is where the project has a lot of room to grow, and where the team is now putting a lot of effort. According to Musighi, this will be one of the factors that will help Balancer grow.

But there is more. Musighi asserts that both Balancer Labs and the community have learned a lot from the "brutal growth" of the Balancer V1.

According to him, this contributed to the successful launch of V2, which brought significant improvements in terms of gas efficiency, user experience, and capabilities to address critical market needs, and stood out as an ideal solution to meet many of the requirements of using AMM as a liquidity provider, trader, and developer.

At the same time, he also noted that for safety reasons, the liquidity transition from Balancer V1 to V2 is under way and will be completed in six to eight weeks.

Binance Smart Chain (BSC) and Ethereum

Many decentralized AMMs, such as Balancer and its biggest competitors Uniswap and Sushiswap, depend to some extent on the blockchain they have built.

Ethereum, the most commonly used blockchain, is thought to be suffering from network congestion, causing fees to skyrocket and transaction speeds to slow. One proposed solution being studied is Ethereum 2.0, at which point we will likely see a transition from POW based consensus algorithms to POS algorithms.

"I'm very optimistic about this -- Ethereum 2.0 is really important and we have a lot of confidence in it. At the same time, we always want to cater to the best interests of users now, not just in the future."

In other words, Musighi says there are other options for expansion beyond Ethereum 2.0 -- such as Layer 2 solutions, Ethereum side chains, or even other layers, or taking more cross-chain compatibility strategies. Notably, Balancer is also available on Polygon, a second layer solution, with the goal of reducing high gas costs.

"These are all things that we're thinking deeply about right now, and very thoughtfully, because we want to understand where we think we might go in the future and how we can best cater to the market."

Among other things, we discussed one of the hottest trends of 2021, Binance Smart Chain (BSC). Musighi doesn't see it as a competitor to Ethereum, and instead, "it actually helps reduce congestion on Ethereum by taking some of the transactions off the main chain."

The future and long term will favor "the most open and decentralized solutions," he said, so other, more centralized blockchains can't compete with the bigger picture.

"If they did, they would see a massive migration of users, projects, liquidity and trading volumes from Ethereum, which has never happened. This tells us that even though it has flaws, even though it has areas to grow, it still offers so much value."

DEFI has a shortage of talent

Jerblockquotey believes DEFI is definitely the future of finance.

"I think society is becoming less and less skeptical of that idea, and of course that's one of the reasons we're seeing these great bull markets."

However, when asked about its biggest challenges, Jerblockquotey says one of them is "bringing diverse talent into the industry to make the Defi product more fully accepted and robust."

"I think one of the challenges that DEFI is facing today is a talent shortage, because there aren't enough people who have a deep understanding of cryptocurrencies but have non-technical skills, or even technical skill requirements, ranging from engineering to design to marketing and branding."

In addition, he talks about the competition between DEFI and CEFI, admitting that CEFI "players have a lot of users -- [because] they have these user relationships". He also mentioned front-end touchpoints with users of digital financial services.

This, he says, presents a huge opportunity for the Defi protocols, which can be seamlessly integrated on the back end as they clearly have technological advantages, but "Defi is still at a disadvantage in terms of user experience design, user acquisition and mass market adoption".