I’d like to highlight that the 2021 march toward decentralized finance (DeFi) mass adoption has made significant strides. Just look at the numbers: The total value locked in DeFi has grown from around $20 billion a year ago to above $230 billion at the time of writing. But the even better news is that it is still the beginning — people have just started to realize the benefits of decentralized technologies, the true potential of blockchain that changes the world.
To gain more insight on the matter, I reached out to different experts from the blockchain industry, asking: “After 2020 was named the year of DeFi, did we already see mass adoption of decentralized finance in 2021? What could help it gain even more adoption going into 2022?”
Alex is the chief strategy officer of Offshift, a decentralized application dedicated to privacy-centric storage and exchange.
“We certainly did not. We did, however, see a lot of very interesting and thought-provoking innovation and experimentation in the DeFi space. One of the biggest barriers holding back real adoption in the DeFi space is gas fees. Between off-chain scalability solutions and Ethereum 2.0, there is a lot of work going on behind the scenes. But we should be careful not to confuse CeFi adoption with DeFi adoption.”
Andrew is the CEO of Koinos Group, an engineering-first company led by battle-hardened blockchain veterans with unrivaled experience as core developers and architects of the BitShares and Steem blockchains.
“I definitely think that we saw another order-of-magnitude increase in the size of the space, but that is a far cry from mass adoption. Mass adoption, for me, means that everyone and their mother is using blockchain-based applications in their day-to-day lives without ever even realizing it.”
Chris is the chief product officer at Phantom Wallet, a Solana wallet built for DeFi and NFTs.
“We saw a decrease in DeFi usage this year, replaced by an increase in interest in NFTs. DeFi made sense for early adopters that were savvy and moving large amounts of money around, but I don’t think that this is what the masses are interested in at the moment.
It’s going to be other use cases like NFTs and gaming that are going to help drive adoption at scale.
You will see basic investing and people trying to earn some yield, but more of the advanced derivatives, yield farmers and trading are going to be fairly niche, just as it is in traditional fintech.”
Dean is the co-founder and CEO of Agoric, an open-source development company launching interoperable JavaScript smart contracts.
“There were several moves late in the year to make DeFi visible outside of the crypto market. I do expect this to crack open the retail market in 2022. Especially, we know TradFi funds are finding ways to participate in DeFi. A key enabler for that will be regulated insurance for the correct execution of smart contracts. We expect that to start showing up in 2022.
More specifically, staking provided the primary rewards when proof-of-stake protocols first came out. But DeFi summer was driven by non-staking yield instruments. Since then, many teams have been integrating the two, so I expect various forms of staking to make a comeback with hybrid models in which staked assets can be used for leverage in other yield opportunities (e.g., liquid staking, ‘superfluid’ staking, etc.).
In terms of further regulation of the sector, I expect to see some DeFi-specific regulatory action next year. The big question is whether it adds useful clarity to help innovators get to market safely and quickly while protecting the public or whether it is greedy or poorly structured (like in the U.S. and elsewhere) such that it just drives innovation offshore. So far, the DeFi sector has successfully pushed back on a few poorly structured regulatory efforts. I’m hopeful that will continue while helping regulators address key areas usefully.”
Filipe is the DeFi architect at Ankr, a scalable protocol built to offer multichain infrastructure for plug-and-play DeFi solutions and multichain staking for DeFi.
“The future will be multichain, and being able to switch between different networks seamlessly will play a huge role in adoption. Why? Because new DeFi users on Ethereum quickly realize that swaps are very expensive, especially for small trades. Wallets and platforms that can aggregate bridges and liquidity will make a real difference for DeFi investors, as it will enable them to pick which pools to invest in without the high fees, and it won’t matter which network they are on, be it […]
source From DeFi year to decade: Is mass adoption here? Experts Answer, Part 2
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