The DeFi market desperately needs to connect with real-world assets

DeFi right now is only a niche trend with a gigantic potential to start a revolution in the business loan market.

In order to grow out of diapers, DeFi desperately needs to be connected with real-world assets and exist in an environment where it can be used by real businesses, corporate clients, etc.

Putting my personal views and beliefs aside, the lack of connection to real-world assets damages the DeFi space in a number of ways.

With all issues in mind, the DeFi space requires an infrastructure that can bridge the gap between real-world assets and the DeFi ecosystem, allowing anyone to use real-world assets as collateral to borrow money from protocols.

The first, most obvious problem is that DeFi borrowing requires collateral in the form of digital assets.

Currently, there is no ready-to-go infrastructure to use real-world assets as collateral in DeFi protocols.

The next problem is heavily tied in with the whole structure of the DeFi market now: Borrowers are able to attract funds from DeFi protocols strictly in crypto, and the same occurs to interest payments.

I believe that the DeFi market desperately needs to build a regulated bridge with the traditional financial market in order to ensure stable growth.

Connection with fiat cash flows mixed with fixed periodic income will allow investors in DeFi to benefit both from income generated by the collateral that lies inside the protocol and interest payments paid by borrowers.

In order to achieve that, the DeFi market requires complex infrastructural solutions that will ensure compliance with current regulation for corporate institutions, allowing them to access funds and repay loans in fiat.