TradFi and DeFi are like 'two worlds converging: Zignaly CFO

Abdul Rafay Gadit made a move that is still rarely made in the banking world: he jumped from traditional finance, or TradFi, to decentralized finance, or DeFi.

TradFi is highly regulated and places an emphasis on protecting consumers. However, it can be slow, expensive and restricted to those moving money with access to banking services. With DeFi, anyone with internet access can participate. And while it's generally faster and more accessible, it comes with risks like smart contract bugs, hacking, and little to no regulation.

“I think we are at a crucial moment where the two worlds are starting to converge,” Gadit tells crypto.news.

After spending six years in corporate banking at Standard Chartered, Gadit launched Zignaly (ZIG) in 2018. Since then, the platform has amassed more than 500,000 users and more than 150 portfolio managers. It also has a decentralized blockchain called ZIGChain in the works.

Read on for Gadit's thoughts on the latest trends in social trading and how you can bridge the gap between TradFi and DeFi.

How have your experiences at TradFi influenced your approach to ZIGChain?

Gadita: My transition from corporate banking to blockchain was driven by a desire to innovate and challenge the traditional financial systems I had been a part of for six years. Working at Standard Chartered gave me deep insight into the inefficiencies and limitations of traditional finance, especially when it comes to accessibility, transparency and opportunities for wealth generation.

Blockchain introduced an entirely new paradigm, one that allows people to control their assets, make decentralized decisions, and participate in open financial ecosystems. Co-founding Zignaly allowed me to put my banking experience to use, focusing on creating a platform where everyone, regardless of experience, could invest alongside experienced traders and benefit from web3 opportunities.

My experiences in traditional finance significantly influenced our approach. Our goal was to take best practices from the banking world (such as risk management, compliance, and user protection) and merge them with the innovation and openness of blockchain. Our goal was to create an infrastructure that would allow the generation of wealth in a more democratized, transparent and accessible way for all users.

What is your long-term vision for ZIGChain?

Our long-term vision is to create a robust and scalable Layer 1 blockchain that powers a truly decentralized wealth generation ecosystem: a platform where builders, fund managers and users can collaborate to create and use tools, dApps and infrastructure Next generation DeFi. that promote financial inclusion and wealth creation.

Our goal is to not only drive adoption, but also establish ZIGChain as a cornerstone of the web3 financial landscape, where builders, fund managers and users alike can thrive in a transparent, secure and high-performing environment. With the support of industry leaders and a clear focus on sustainability and innovation, we are well positioned to make this vision a reality.

ZIG chain launched a $100 million ecosystem development fund in August. Where will that capital go?

The $100 million Ecosystem Fund, backed by DWF Labs, UDHC Finance and Disrupt, is critical to realizing our vision. We plan to use these funds to attract top-tier developers and projects, offering them the resources and support needed to build innovative tools natively on ZIGChain. This funding will help accelerate the growth of our ecosystem by fostering innovation, expanding our infrastructure, and creating incentives for key participants.

What are the biggest challenges in managing such a large social investment platform?

One of the key challenges we have faced with Zignaly is limited access to asset classes. As of now, fund managers on our platform can only invest in tokens listed on centralized exchanges, which restricts the investment opportunities available to our users. However, with ZIGChain, we are opening the doors to a much wider range of assets, including DeFi, real-world assets, nfts, perpetual contracts, and tokens on multiple chains. This flexibility not only offers fund managers more options, but also creates more diverse and profitable investment strategies for our users, ultimately increasing return potential.

We have also encountered limitations within centralized finance, or CeFi, such as mandatory KYC processes and restricted access based on users' nationality. These requirements can limit global user participation and create scalability issues. ZIGChain, being a decentralized blockchain, circumvents many of these barriers. It enables a more inclusive and scalable system that allows users to participate without the strict restrictions often imposed by centralized platforms. This makes ZIGChain accessible to a broader audience, ensuring we can scale the platform to meet growing demand.

Another limitation we have faced at Zignaly is the merchants' dependence on CeFi. Currently, we are limited to fund managers and traders within centralized exchanges, but with ZIGChain, we unlock a whole new realm of DeFi traders. This opens access to innovative DeFi strategies and products that were previously unavailable on Zignaly. By leveraging the DeFi space, we can significantly improve yield potential for our users, increase overall profitability, and diversify revenue streams for the business. This not only improves the user experience, but positions ZIGChain as a more dynamic and adaptable platform in the ever-evolving web3 landscape.

Given your background in corporate banking, how do you see the intersection of TradFi and DeFi evolving?

My experience in corporate banking has given me a unique perspective on the potential synergy between traditional finance and decentralized finance. I believe we are at a crucial moment where the two worlds are beginning to converge, and this intersection presents immense opportunities for innovation and financial inclusion.

TradFi has long been the backbone of the global economy, with frameworks in place for risk management, compliance and trust. However, it also has limitations: restricted access to wealth-generation opportunities, high barriers to entry, and slow innovation. DeFi, on the other hand, offers openness, inclusion and decentralization, giving users direct control over their assets and access to a wider range of financial products such as staking, loans and real-world tokenized assets.

As this synergy evolves, I see traditional institutions increasingly integrating DeFi solutions to improve efficiency and offer new services to their customers. This could include everything from tokenized assets and decentralized lending to programmable smart contracts to automate complex financial processes.

By building an ecosystem that combines the security and regulatory rigor of TradFi with the innovation and transparency of DeFi, we can create a more accessible and flexible financial system. I envision a future where users move seamlessly between traditional and decentralized financial products, unlocking new opportunities for wealth creation and financial empowerment on a global scale.

Does Zignaly compete with other social investing platforms?

At Zignaly we do not see ourselves in direct competition with other social investment platforms. Instead, we focus on competing with our vision to continually evolve and expand access to fund management for all. Our goal is to democratize wealth generation, ensuring that anyone, regardless of their financial background, can connect with professional fund managers and access a wide range of asset classes.

While other platforms may be limited to centralized systems or traditional investment assets, we are pushing the boundaries by integrating DeFi, RWA, nft, and more through ZIGChain. Our mission is to break down the barriers that have long excluded people from managing their wealth and open a world of opportunity where access to financial growth is no longer a privilege, but a right for all.

So, in essence, our biggest competition is our own ambition to redefine what is possible in the world of decentralized finance and fund management.

What trends do you foresee in social investment?

Over the years, we have seen strong demand for transparency, performance-driven strategies and diversified asset classes. The key trend we are seeing in social investing is a shift towards decentralized platforms and more innovative investment opportunities, especially as users become increasingly aware of the benefits of DeFi and tokenized assets.

In the coming years, I foresee a growing demand for personalized investment strategies, where users will not only follow a portfolio manager based on their past performance, but will have access to dynamic real-time strategies tailored to risk profiles, preferences and conditions of each individual. goals. We also expect greater integration with decentralized asset classes that offer users an unprecedented level of diversification.

How to stay ahead of the web3 curve?

To stay ahead in the web3 space, we are constantly innovating. With ZIGChain, we are creating a platform that not only offers access to a much wider range of assets beyond centralized exchanges, but also introduces features such as automated and trustless fund management based on smart contracts, which significantly improves the security and transparency. We are also building our infrastructure to accommodate more DeFi portfolio managers, allowing them to provide strategies and tools to our users. This will not only improve profitability for our users but will also attract a new generation of traders to the platform.

Our goal is to lead the way in the evolution of social investing by staying decentralized, offering access to new and diverse asset classes, and continuing to prioritize security, transparency, and user experience.