Still an industry in the early stages of development, DeFi is one of the main “hotspots” in the crypto sphere, especially since it comes with a brand new, decentralized, and efficient way to structure a financial system. Even though many critics point towards the fact that crypto lending via DeFi projects is contributing to increased speculation in the market, there are many other benefits associated with this sector, some of them that will unfold in the longer run.
The emergence of a multi-chain future
Because the traditional financial system is outdated as compared to DeFi, experts believe Decentralized Finance can advance due to its unrestricted protocols. At the same time, a multi-chain future will come with several other benefits including the removal of the “middle man”, increased transparency, and larger democratization in the finance field.
The main focus right now is on how to predict the Bitcoin price, yet there are multiple fundamental changes to occur if the cryptocurrency and blockchain industry can continue to grow. Investments are pouring in, driving innovation and new incentives for corporates and retails to embrace the benefits of the DeFi sector.
DeFi projects on the rise again
Crypto volatility had indeed been low for the past several days once again, yet that’s not the case when it comes to DeFi tokens. Chainlink continues its meteoric rise and had managed to surpass $32 by the time of writing. Massive funds are been put into other leading DeFi projects, some of them being lending platforms, generating even more demand for Ether, the second-largest crypto in the world.
Considering most of the DeFi projects are built on the Ethereum blockchain, valuations are on the rise alongside blockchain fees. Last summer is was assumed there was a DeFi bubble and now that the market broke above the previous all-time highs, new upside potential had been unlocked.
Financial decentralization – the only way forward?
A centralized financial system ruled by central banks and public regulators had been around for decades. Even though it is assumed to be at the core of the market-based economy, the technological developments enabled new ways for the industry to function.
Both Bitcoin and altcoins are performing well and a crypto market downturn had yet to materialize. Regardless, in the longer run, the way cryptocurrencies are structured can serve as a new model for how money is being created and transacted in a society heavily reliant on technology.