From perceiving the fundamental value of DeFi for a particular use case to government support, here's what DeFi startups in India need
Chainalysis published its fourth annual Global Crypto Adoption Index in September 2023, tracking grassroots crypto adoption across borders. India ranked at the top, which might seem surprising to many, considering there is no concrete crypto regulation just yet. However, it seems the common man has spoken, and crypto and web3 have a bright future in India.
DeFi is one of the key areas of focus for Indian startups today; over 300 such entities are active in the space with varying degrees of success. A startup with an innovative idea may still speculate about the viability of DeFi-focused companies in India. Gaurav Arora, leading DeFi initiatives at CoinDCX, recently spoke on the potential of decentralised finance in the nation, highlighting key considerations.
While the regular Indian user may be more receptive to DeFi, crypto, and the broad web3 space than users from other parts of the world, there’s more to it- what unique opportunities does DeFI bring? Which pain points can be best addressed with decentralisation? Does the Indian government back up this degree of innovation?
Arora believes beyond the money-making opportunity, the real value in web3 can be perceived by up and coming startups if they ponder how the features of web3 (like decentralisation and composability) can apply to their use case: “...what they should focus on is the open nature of web3. Can it add value to them? Can it solve their problems? Can it give them a competitive edge? Is there an opportunity?”
Looking past just the demand for web3 solutions, startups in India may need to see the fundamental value in web3 to succeed. Here’s how Arora sums up one of the key features that can prove advantageous: “I think the first most important part is what's called composability. If a particular web3 protocol exists, somebody else can use that to build something on top of it. Then a third person can come use the second one and build something on top. So they can make an unlimited number of combinations because they can keep connecting all of these blocks.”