Once the history books have been written about cryptocurrency, 2020 will be remembered as the year of explosive growth in the popularity of decentralized finance.
A prime example of how to grow this often misunderstood little room is DeFi Pulse. In early January, the total cost of the banned DeFi protocols was $ 675 million. The records have continued to plummet since then – and at some point in December, that number reached $ 15 billion. That’s a 2,100% increase in less than 12 months.
Although there are signs of a bubble, cryptocurrencies such as Binance CEO Changpeng Zhao have said they expect DeFi to remain and that there is “significant upside potential” in this fast-growing region.
However, critics argue that DeFi should evolve and mature as we enter 2021. This year, endless ramifications have also prevailed – and a series of projects have emerged with nearly identical (and often food-related) titles. Flexibility lacks flexibility as traders switch from protocol to protocol in search of the best profits, and the sudden creation of new platforms by agile developers has led to serious security issues that sometimes lead to tens of millions of dollars vanishing. Thin air.
In fact, Cointelegraph recently reported new research from computer company BraveNewCoin that warned of 18 serious “non-financial” risks in the DeFi sector. Scalability prevailed in this list – network congestion led to high gas costs and failed transactions, resulting in protocols not working.
The dangers do not end there. Security vulnerabilities in smart contracts can be exploited with flash credits, and oracle protocols can cause inaccurate pricing data, and interconnection can mean that many protocols must trust others to operate, and there is a risk that centralization also enters the industry. .
Get long-term benefits
It’s worth noting that many critics are excited about how DeFi has provided secure, trusted, and unauthorized transactions in a way that the central platforms just can’t match. However, their argument is that DeFi is lagging behind in its current form, which means that the infrastructure needed to make real change is not yet ready.
Similarities were drawn to the stock market in the 1980s and 1990s, when orders were called by phone and traders were unsure of the exact time or cost of being executed.
In some cases, DeFi’s protocols have been compared to a leading electric vehicle manufacturer that showcases cutting-edge battery technology … regardless of tires.
Industry officials said the industry needs a solid bridge that connects DeFi to the traditional economic world and helps it bypass the experimental arena. This will provide the technological flexibility needed to prevent disruptive exploitation, stimulate the active use of space, and create the infrastructure needed to conduct large transactions safely, cheaply and instantly with little or no latency.
Move away from agriculture and mining
Newcomers to the market, such as iob.fi DAO, believe that in the not-too-distant future, discussion about DeFi will move from mining, agriculture and term loans to “real, sustainable and stable returns”.
The platform describes itself as the first token and effectively managed pools protected by DeFi – an environment in which traders can access cryptocurrencies, stocks, commodities, and indices in one place … all from the Web3 wallet.
According to iob.fi DAO, this can be beneficial as most asset classes have different price cycles. While Bitcoin may be in a one-week surplus, it may trade sideways next week when Wall Street takes over.
Iob.fi DAO reports that a bridge will be created between professional Wall Street firms and cryptocurrencies through Prodefy, a suite of tools designed to connect high-performance traditional trading systems with DeFi platforms that support Web3 in 2021. Web3 has been used and described as critical because it is targeted Towards the future and can be easily upgraded with the advent of more advanced technologies.
Iob.fi DAO says Prodefy will be crucial in achieving adoption because merchants in the city don’t need to drastically change trading systems or create new ones. This will break down barriers between the two markets – as institutional interest in cryptocurrencies continues to grow, and a number of companies are buying tens of thousands of bitcoins to hold.