Gwendolyn Regina is the investment director bnb chain,
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Decentralized Finance (DeFi) is the largest and most innovative crypto vertical in the last two years. DeFi uses smart contract platforms as a foundation to develop a network of interconnected layers for decentralized financial services.
DeFi TVL (Total Value Locked) reached on-chain 256 billion dollars In December 2021. The past few months have been difficult for the cryptocurrency market, which has dropped to $73 billion. Market losses can create new opportunities. Innovation involves repeated failure until breakthrough structures are created. There are many options in the next generation of DeFi protocols. Let’s explore these opportunities.
CeDeFi
Assets are the foundation of any economic system including DeFi. stable coins Cryptocurrencies are driving decentralized finance by overcoming the high volatility of the market. Its invention made non-volatile account units important for lending, borrowing, and predicting interest payments.
DeFi protocols should use stablecoins as an asset because they provide higher trust and lower volatility, making them ideal for decentralized financial products.
Need to capture more opportunities in synthetic and real-world assets (RWA)
blockchain There are innovative protocols for building Synthetix and RWAs, but few blockchains. Shortage Synthetix and the RWA protocol for the DeFi ecosystem.
Investors can benefit from synthetic asset without owning the underlying asset. They let investors invest in crypto commodity classes that are out of reach due to product structure and features. DeFi protocols can use synthetic assets for blockchain composition. Synthetix improves the efficiency of DeFi by offering investors access and liquidity in crypto assets.
Most DeFi protocols overhauled the cryptocurrency due to its volatility. Real world assets (RWAs) lack this feature. RWA is a non-volatile DeFi-TradFi bridge. RWA’s protocol will attract retail and institutional blockchain investors.
DEX and Lending – strong engines for the DeFi landscape
The core DeFi layer allows all of the above assets to be used as loan collateral or exchanged for other assets. lending protocol Capture nearly half of DeFi deposits, allowing users to pledge assets as collateral. The ability of certain protocols to attract TVL ensures an inflow of liquidity to promote crypto lending.
automated market maker (AMM) There should be a difference in exchange protocols for volatile and stable assets. Stable AMMs reduce slippage to increase stablecoin trading efficiency. High-layer asset circulation and optionality rely on the deep liquidity of the AMM and the low slippage of the StableSwap protocol.
unused capacity in derivatives
derivativeIndexing and options are part of advanced DeFi. These DeFi products are important, but they do not advance the blockchain. More options and derivatives are needed. solana proved it in the options market Ethereum With the right protocols, you can capture a huge market share. New derivatives and options are needed.
Options are used for basic financial strategies such as hedging and can be attractive in volatile markets. Options protocols are essential to institutions, making them an important tool for blockchain. Retail users are unfamiliar Greek, on the money either american option, so they rarely use options. The blockchain requires the Options Vault Protocol to offer automated options strategies for delegated users.
produce aggregators
The aggregation layer comes next. Supply-side protocols pool capital and distribute it to other protocols.
The new protocol can help ecosystem players compete with and win ‘battles’ with top blockchain market share leaders.
Payments – the window for DeFi to power the world’s economy
Aggregation layer takes priority payment protocol. Millions of people in underbanked countries do not have credit cards or bank accounts. Blockchain can provide secure, decentralized, non-discriminatory payment services to millions of people. Decentralised, blockchain-based payment services that do not discriminate.
Crypto payment gateways are needed to reach the masses so that e-commerce can be powered by crypto assets. Only a few stablecoins provide the right vehicle for building an ecosystem to compete with fiat currencies.
The Path To Trustworthy DeFi Infrastructure: Security, Compliance and Insurance
Must have blockchain protocol Safe across all layers. To avoid systemic risks spread across the chain as in well-known projects. For DeFi to scale, investors and users must feel secure. This requires risk-aware protocols.
Risk management, compliance and insurance foster trust. Many blockchains lack contract audit protocols. Some mechanisms can help, but we also need protocols. Insurance and stress testing must be prioritized for blockchain to differentiate itself as a secure, trustworthy technology. Based on the market share, there is scope to develop the dominant protocols. These projects will help the ecosystem navigate these uncertain times and create a new DeFi paradigm. There is a need for more security, risk mitigation and trust.
conclusion
The assets of the DeFi landscape and the DeFi base layer can also strengthen. AMM requires large liquidity, stable swaps, lending, and a stable currency to scale to the upper layers, where the gaps reside. Derivatives, indexing, prediction markets and payment solutions should be top priorities. Security, insurance and compliance protocols are also important for blockchain.
Now is the time to help innovative protocols achieve their goals and promote large-scale crypto adoption.
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learn more:
, What DeFi Offers Beyond Lending for Crypto Speculation
, Top 7 Decentralized Derivatives Trading Platforms
, Incorporating the Pros and Cons of Web2 into Web3
, Japanese Regulator Suggests It’s Preparing to Police DeFi
, Uniswap Decentralized Exchange New Privacy Policy Says Platform Will Collect User Data – Here’s What’s Included
, Founder Vitalik Buterin Reveals 5 Features That Get Him Most Excited About Ethereum — The Last One Might Surprise You
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