Shifting gears: Driving enterprise DeFi adoption through tokenization

While it makes sense that DeFi - a space characterized by terms such as "Yield farming" and "Meme tokens" - has captured the majority of the cryptocurrency sector's attention, the concept is also beginning to catch on within the enterprise world.

Stefan Schmidt, chief technology officer of Unibright - an enterprise blockchain development company - told Cointelegraph that DeFi concepts can be applied within the enterprise sector where financial assets can be represented by programmable tokens: "In general, the definition of DeFi still isn't clear outside of the enterprise sector." However, according to him, DeFi is "Anything finance related that can be tokenized."

Although enterprise DeFi is still in development, Schmidt mentioned that this will start gaining traction very soon, as these concepts will be implemented within enterprise IT tech stacks in 2021.

In the meantime, the first step that will set the stage for enterprise DeFi will be facilitating agreements between organizations sharing data.

Kyle Thomas, CEO of Provide, told Cointelegraph that the Baseline Protocol is indeed the lynchpin that will facilitate the age of corporate data-sharing to enable enterprise DeFi.

"All of Unibright's DeFi offerings will be customized for enterprise needs," said Marten Jung, CEO of Unibright.

Paul Brody, global innovation lead for blockchain at Ernst & Young, told Cointelegraph that eventually there will be an evolution where enterprise users will follow the path of consumers, adding: "They will start with coordination of business agreements, but they will then add payments. As the privacy tools from Baseline Protocol get more widespread usage, I think we will then see the adoption of DeFi by enterprises."

Brody further mentioned that early enterprise DeFi use cases will be represented by enterprises selling financial assets such as receivables to third parties in bidding models.

Data privacy standards and permissioned data are also challenges that need to be overcome in order for enterprises to start preparing to adopt DeFi techniques.

Interestingly, while Ethereum 2.0 has also been predicted to drive enterprise DeFi, both Thomas and Schmidt think that it will not have a significant impact on the progress of the Baseline Protocol.