Mark Cuban: DeFi could be the ‘next great growth engine’ for the US

Quick Take

  • Mark Cuban wrote a blog post on the potential of the decentralized finance industry.
  • He argued that the U.S. needs to embrace it, rather than continuing to restrict it.

Mark Cuban, billionaire investor and owner of the National Basketball Association’s Dallas Mavericks, said yesterday that the U.S. government and regulators need to start getting behind crypto innovations, such as the decentralized finance (DeFi) industry. Otherwise, he argued, the U.S. will “lose the next great growth engine that this country needs.”

His thoughts came in a blog post entitled “The Brilliance of Yield Farming, Liquidity Providing and Valuing Crypto Projects.” 

At the end of the post, Cuban discussed the broader potential of the DeFi industry. He noted that DeFi projects are, by their very nature, decentralized and not located in the U.S. The entrepreneur then partly put the blame on regulators for pushing innovation out of the country.

“This is not only because of the ethos of Decentralized Autonomous Organizations (DAOS), but also because of the ABSOLUTE STUPIDITY of our regulators forcing some of the most impactful and innovative entrepreneurs of this generation to foreign countries to run their businesses,” he said.

Cuban predicted that in 10 to 20 years we will look back at this period of time and observe that world-changing companies were built. “Among those companies, [it’s] already a certainty that De-Fi and other crypto organizations will be at or near the top of the list,” he said, before warning that if politicians choose to continue to dampen innovation, this growth potential could be wasted.

Investing in DeFi projects

The post also went more deeply into his recent thoughts about DeFi, particularly focusing on certain projects he has invested in, including Ethereum scaling solution Polygon and lending protocol Aave.

Cuban said that the main differences between traditional businesses and decentralized ones is that the DeFi firms don’t need to raise as much money to begin with — or focus on maximizing profits.

“That is not to say that every crypto blockchain or DeFi project will work. They won’t,” Cuban said, adding, “Crypto is brutally competitive. But in crypto vs traditional, centralized businesses, all other things being equal, I’m taking crypto every time.”

When it comes to choosing which tokens to invest in, Cuban said that he looks at factors including current revenue, growth rates, how likely projects will keep a competitive advantage and the strength of the community behind the project — the latter presumably explaining his fondness for Dogecoin.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Related Reading

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

TRON USDC now available

Delivering on a vision for an interoperable global standard for dollar digital currency, Circle and TRON have partnered to make USD Coin (USDC) available on the TRON blockchain, which has grown to more than 56 million accounts and nearly 2.5 billion transactions since its founding just four years ago. TRON is home to a broad ecosystem for digital assets in Asia and around the world, and the TRON community can now benefit from easy access to the world's fastest-growing, regulated dollar digital currency. 
Read Full Story
Sponsored Post

Layer-1 Platforms: A Framework for Comparison

The Block Research was commissioned by Algorand to create Layer-1 Platforms: A Framework for comparison, which provides a “look under the hood” at seven platforms: Algorand, Avalanche, Binance Smart Chain, Cosmos, Ethereum/Ethereum 2.0, Polkadot, and Solana. We assess their technical design, related ecosystem data, and qualitative factors such as key ecosystem members to get an understanding of how they differ. Having done this analysis, we draw some insights for what the future of the broader smart contract landscape could look like for years to come. 
Read Full Story
Aug 11, 2021, 5:18PM UTC