Decentralized Finance

Since the launch of Decentralized Applications (DApps), data and asset security have always been the critical factor affecting DApps. Endless asset security incidents continue to attack the entire industry. Improving the system security of blockchain applications and protecting assets has become a significant challenge faced by every DApp development and operation team.

Decentralized Finance (DeFi) is regarded as one of the most promising markets in the blockchain industry. The demand for efficient financial services on a decentralized network is on the rise. The optimistic expectation for this technology’s potential can be seen in the appreciating valuations of tokens native to DeFi protocols.

The DeFi system enables users to carry out many activities that would traditionally be done in the banking industry. Users can now create deposits, earn interest, as well as lend and borrow. However, transitioning these possibilities to a decentralized network has resulted in greater accessibility and transparency. Those who may have encountered great hurdles in the traditional financial system can now meet their DeFi system demands.

As the DeFi market develops, digital assets built on the blockchain have become a top asset class worldwide. Users can efficiently and transparently check the issuers, holders, transaction details, and digital assets’ contract execution results. The standardization (for instance, ERC20) brings about the composability of digital assets. Financial products available through a decentralized financial platform can be deployed easily in other financial applications. DeFi has opened an innovative market through which transactions can be implemented by traders and financial service providers in any part of the world.

These advantages have led to the rapid expansion of the DeFi market, especially in insurance, funds, lending, and trading. By December 2019, the whole DeFi ecosystem’s lock value is USD 650 million. This is 148% higher than the USD 262 million in January 2019. Also, 2.7% of the total circulating ETH is locked in DeFi services. Since 2020 started, the value locked into the DeFi market has risen to about 250%. Two years after maintaining minimal risk-taking, investors now seem to be willing to allocate capital to blockchain technology’s most compelling use case. Several individuals and institutions have encountered restricted or nonexistent access to efficient financial services. However, blockchain has gone beyond just “banking the unbanked”. There are upcoming protocols on the Ethereum network that easily enable users to borrow, loan, alongside transfer and trade value.

However, although there seem to be limitless possibilities across various protocols, the protocols are disconnected in a way that makes navigating them challenging. Creating an excellent integrated user experience will ensure a new wave of DeFi adoption. The crypto masses are becoming more interested in the Defi market. There have been cases of volatile Ether price movement, bugs exploited on Ethereum protocols, and strong analysis of altcoins’ value proposition. Nevertheless, DeFi infrastructure has been growing at a fast pace, becoming more robust.

The DeFi industry features a number of lending protocols, such as Aave, Compound, InstaDapp, and Maker. Interest rates available for lending on such platforms generally exceed 5%, making them an attractive alternative to traditional finance’s near-zero interest rates.

Also, protocols featuring liquidity pools have become popular in the DeFi market. These liquidity pools enable decentralized trading for their users. Individuals who have locked their capital into such pools can earn a share out of the trading fees. There are protocols like Balancer, Uniswap, and Curve, holding the dominant share of this segment’s value. Rates above 5% are generally typical among these liquidity pools.

Crypto staking is also becoming a popular means of earning a return on capital. Users in some networks and protocols can lock their tokens. They play a crucial role in providing consensus on a distributed network. Although distinct from the DeFi system, staking is another activity that has recorded phenomenal growth and sparking interest. There is over USD 10 billion locked in staking on the Cosmos, Tezos, and Polkadot protocols.

DefiBids makes buying cryptocurrencies and DeFi pleasurable and profitable for anyone interested. This unique and revolutionary DeFi online auction enables anyone to bid on packages of ERC-20 tokens and NFTs at much discounted rates compared to market value. The DeFi market has experienced snowballing growth owing to the healthy investor ROIs and market hype. Therefore, DeFi is one of the fastest-growing sectors in the blockchain. With Defibids, you can now bid on a number of DeFis.