To be sure, blockchain rose to the world stage on the back of Bitcoin's remarkable performance. However, blockchain technology is gaining its significance, especially after the cryptocurrency ecosystem nearly collapsed in 2018. Today, the technology anchors around three primary use cases: staking, custody, and DeFi. Decentralized Finance (DeFi) is particularly interesting because of the waves it is making.
To be sure, blockchain rose to the world stage on the back of Bitcoin's remarkable performance. However, blockchain technology is gaining its significance, especially after the cryptocurrency ecosystem nearly collapsed in 2018. Today, the technology anchors around three primary use cases: staking, custody, and DeFi.
Decentralized Finance (DeFi) is particularly interesting because of the waves it is making. DeFi protocols such as Compound are taking the world by storm as more people realize how the ecosystem could revolutionize the global financial ecosystem. Just last month, Compound topped MakerDAO as the most valuable DeFi lending project.
Overall, the DeFi ecosystem’s trajectory is steepening upwards as more value is locked in DeFi projects. To put this in context, consider the value locked in DeFi projects in the last 30 days. In the period, the total value locked (TVL) in DeFi jumped 119% to settle at $2.279 billion. If this growth cannot convince one to onboard the DeFi ecosystem, then nothing will.
Source: DeFi Pulse
Admittedly, there is a wave of DeFi protocols, but most are still in the abstract realm. Few protocols such as MakerDAO and Compound have been able to go live and to attract investors. These software pieces are coming up with solutions to problems that have plagued the legacy financial system for ages.
DeFi lending protocols enable users to access credit cheaply. On the other hand, lenders can earn high-interest rates on their investment. Importantly, the majority – if not all – of the DeFi developers agree that the protocols will right most of the ills of centralized finance (CeFi). There is a need for an alternative to traditional finance from the foregoing, one that serves all participants in good faith.DeFi lending protocols are more popular today because they enable everyone to supply cryptocurrencies and stablecoins and to earn interest on them. This another avenue for holders of the digital currencies to earn income other than trading them on exchanges
According to a report, DeFi is the fuel that will propel the financial innovations of the future. The innovations already began with the complete transformation of existing commercial products such as lending. This trustless ecosystem enables finance to reach the unbanked and the under-banked in a previously impossible way.
The blockchain industry started twelve years ago with the release of Bitcoin. That was a shock, a huge slap for the traditional financial system. However, from another angle, it was a Big Bang of a Decentralized finance universe.
DeFi projects are changing the way we’re interacting with digital funds. We’re taking real money and transforming them into digital assets that can be used in blockchain-powered applications. Anyway, as much as we want to think that the cryptocurrency world is one that is separated from the actual real-world, it is not. Otherwise, why are you checking the USD price of your tokens?
DeFi is booming, but while industry records are smashed, questions about Ethereum’s ability to shoulder the burden mount. The burgeoning DeFi sector is putting increasing pressure on the Ethereum network, with the problem growing so acute that Vitalik Buterin recently described gas prices as something “we now have to spend years painfully fixing”.
The amount that Bitcoin has grown in recent years is staggering. In around a decade or so, it has gone from a relatively unknown asset to an incredibly popular and valuable cryptocurrency that has made front-page headlines across the world. It has shown a lot of promise and potential in both finance and tech.
P2P lending has the potential to turn into a huge source of revenue for you, so why leave it untapped? The conventional banking model has serious limitations, so it is time to deploy technology like blockchain to simplify things for a large number of lenders and borrowers, and in the process, make some money (a lot of it in fact) for yourselves as well.