The venture capital arm of Thailand’s oldest bank, Siam Commercial, is preparing to make a huge investment in the DeFi altcoin sector despite the recent weakness of the cryptocurrency market.
Despite the Terra collapse, major companies are investing in the DeFi altcoin market
According to a report by Bloomberg, SCB 10X said it has invested an undisclosed amount in DeFi altcoin project Compound (COMP). Compound offers 4% return on deposit with its corporate-grade products. It is the eighth largest DeFi platform with a total value of $3.19 billion in locked (TVL).
Compound is also among the few cryptocurrencies with a debt rating. It also managed to secure additional funds from a number of investment companies during the year. SCB’s investment in Compound comes just weeks after a price boom in Terra, once the second largest blockchain in DeFi.
SCB 10X rise in DeFi
SCB 10X’s Chief Investment Officer Mukaya Panich said on Twitter that the partnership comes after 11 months of collaboration with Compound. The venture capital firm will develop risk monitoring tools to help monitor parameters on Compound, similar to a bank. Through Compound, it will also explore incorporating DeFi yielding products into Siam Commercial’s products.
Panich continues its bullish on DeFi despite the Terra collapse. Speaking to Bloomberg, Panich said the collapse would likely invite tighter regulation over DeFi, making the space more tempting for institutional investors.
Despite increasing crypto adoption, most major trading companies are still hesitant towards DeFi. The lack of regulation over the space, coupled with the need to hold crypto directly, are probably the two main factors influencing this. But that trend could change with the advent of products like Compound’s treasures.
2022 has been a year of the DeFi market meltdown
However, DeFi is experiencing a huge depreciation in 2022. According to Llama data, which we quoted as Kriptokoin.com, the collapse of Terra wiped out approximately $ 80 billion in value from the market. TVL in the market fell more than half to $93 billion, from a high of over $200 billion earlier this year.
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