Crypto financial market

Unlike traditional financial markets, crypto financial markets are decentralised. This means that financial services based on cryptocurrencies can be provided without the intervention of centralized institutions such as governments or financial institutions.

The main advantage of such a decentralized financial system is the ability to prove ownership of assets without relying on a third party. In addition, while centralised systems are relatively vulnerable to hacking, blockchains have the advantage that the movement of information and value is recorded, verified, and archived by all participants in the network, making it impossible to tamper with unless the network of many participants is hacked simultaneously. However, despite these strengths, there are still problems that need to be complemented and are as follows.

1. Value uncertainty and price volatility due to the lack of intrinsic value of cryptocurrency

Currently, most cryptocurrencies do not have intrinsic value, which makes it difficult to measure the value of cryptocurrencies, and there is no standard for a fair price. For this reason, the price of cryptocurrencies is highly volatile, and investors are exposed to unpredictable and rapid price changes.

In addition, decentralised financial services such as DeFi, which are based on cryptocurrencies, are subject to the risks of value uncertainty and price volatility, which have been highlighted by recent events such as the Terra and Luna cases and the FTX bankruptcy.

1. Difficulties in expanding market size

Although the virtual asset financial market has been attracting attention recently, it is still relatively small compared to the traditional financial market, and there are difficulties in expanding the market size. In order to further expand this market, various products that can attract large capital from the traditional financial market are needed. Recently, a virtual asset financial market based on US Treasury bonds, the world's largest, has emerged, leading to explosive growth in market size.