Interest in the decentralized financial industry has risen in the past two months as new platforms have been launched rapidly in recent months that promise to change the way we manage money, trade, make money, and have fun.
Much of this growth has been supported by the explosive growth of DeFi lending platforms such as MakerDAO and Aave, which together currently account for more than 40% of the DeFi market. But a wave of new DeFi products targeting nearly all the traditional and digital industries is now spreading and expanding DeFi’s benefits to informal consumers and cryptocurrencies.
In 2020, DeFi’s projects and products can be described as basic protocols or new capabilities built on top of these protocols; Or they can be considered as improvements or improvements to existing products and services.
Step 1. Define the rules for the transaction
As the industry is still in its infancy, most new ventures fall into the ‘protocol’ category – in fact, they are cooking methods that allow entrepreneurs and innovative companies to launch their own products and services because they can be integrated into complex platforms that offer new features.
These protocols define what can be done with DeFi, including the types of digital assets that can be issued, managed, or used, and how platforms built around the protocol can communicate with each other. In this case, it could be interactions between various commodities such as Wrapped Bitcoin (WBTC), Wrapped Ether (WETH), Stacked Currencies, and popular crypto project tokens like Basic Attention Token (BAT), Chainlink, and Curve (CRV), among others. Use to create new collections (or recipes).
The interaction of many different DeFi platforms has led to a rapid growth in the industry as users stack the benefits of each platform on top of one another to create increasingly innovative new applications of the technology.
For anyone building their own DeFi initiative, this usually means either working on multiple plug-and-play solutions to create something new, or introducing a new protocol into the mix in hopes of adding other values. In defining the transactional rules for this protocol, developers must consider the intended use case and find the right balance between diversity, security, and utility. Typically in the DeFi room, developers consider how their assets (components) fit into the ecosystem and whether they can provide additional value to owners beyond what is currently available.
If DeFi is soup, blockchain protocols and transaction rules are the way to cook and the assets are the ingredients. By changing the set of protocols (cooking methods) and origins (ingredients), a diverse set of products can be shaped, giving rise to the diverse DeFi ecosystem we see today.
Step 2. Development of the asset (s)
To expand the DeFi industry and attract a new wave of users, we need more raw materials. Without a doubt, one of the most promising raw materials will be the symbols that represent sports rights and the origins of the sports industry. With over 3.5 billion sports fans around the world, most of them between the ages of 18 and 49, this is a great opportunity to expand the DeFi industry by offering added value to sports fans.
For people looking to develop the disruptive DeFi product that forms the interface between sport and blockchain technology, sport will be the essence of the recipe.
The global sports industry is a $ 500 billion market, ready for disruptions in innovative blockchain products, new products, and new experiences. Companies are already starting to create basic protocols that can address these violations.
Some platforms allow fans to participate in the decision-making processes of their favorite sports teams by purchasing and using fan codes for the specific sports team. Depending on the team, these fan tokens can also give owners access to various rewards, such as unique experiences and exclusive items not available anywhere else. This can help fans engage constructively with their favorite sports stars and clubs, while creating a unique online economy using fan codes.
But DeFi has the potential to expand even further. With DeFi, users can participate in a fully decentralized fictional league, collect and exchange non-exchangeable tokens that represent players and teams, and enter into untrusted game contracts where players pit their teams against each other and bet on the outcome. Participants of the system do not have to believe in the correct payment of the bet, because everything is completely transparent and unreliable.