As per Chainlink co-founder Sergey Nazarov, decentralized finance may be a few years down the line for global adoption. He, however, cautioned that DeFi is still encountering significant regulatory and institutional hurdles which will need to be cleared before it can scale up securely.
Nazarov mentioned that DeFi – which is a blockchain-based peer-to-peer financial setup that could perhaps see as high as 50% global penetration, once clarity around its reliability and operational guidelines is provided by governments.
“I think we’re about 30% of the way there. A lot of governments follow what the US does because they want to be compatible with the US financial system.”
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Other players in the industry corroborate this viewpoint. In February, Curve Finance founder Michael Egorov pointed out that the main impediments to widespread DeFi adoption are the uncertainties surrounding regulations, legal frameworks, and compliance with KYC and AML standards. He also brought up the need for liquidity, transaction transparency, and the prevailing technical security risks as challenges.
Institutional Capital Seen as the Key to Full DeFi Adoption
Nazarov believes DeFi could reach about 70% global adoption once there is a clear and efficient framework that allows institutions to deploy both their own capital and client funds into decentralized systems. He argued that true mainstream status will only arrive when DeFi becomes large enough for its capital base to be compared directly with the money flowing through traditional finance.
He expects this shift to become visible by 2030, with adoption charts showing how much institutional and client capital has moved into blockchain-based platforms versus traditional financial systems. Even if those early percentages are small, he said they would mark the beginning of long-term momentum. As the share of institutional capital in DeFi grows, the industry would move from an early-adopter phase into full mainstream acceptance.
