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Jump Capital principal says improving capital efficiency is key for industry

Aislinn Keely

Peter Johnson, principal at Jump Capital, thinks lack of capital efficiency is one of crypto's biggest pain points, and says improving it in the space is key. This means finding traders safer and more efficient ways to settle, he said on this week's episode of The Scoop.

"It means credit and it means having buying power across various exchanges without having to pre-fund at all those exchanges," he said. "It means settlement solutions that are more efficient and safe."

Areas of the market Johnson sees as working on these problems fall into the more centralized realm, although Johnson did say he felt the DeFi world represented the possibilities of technology, driving the market forward. However, he said, the solutions have not yet reached a critical mass where they'll entice users away from the centralized. According to Johnson, for users to make a jump to something new, solutions often have to be 10 times better, and DeFi solutions are not there yet.

On the centralized side of progress, Johnson pointed to BitGo as an example of a firm working on capital efficiency solutions. OmniX also represents a step forward by allowing trading across various exchanges, according to Johnson. 

"Then kind of the next logical step beyond that is how do you not need to pre-fund all those exchanges when you're trading across them," he said.