Latest DeFi trends in 2021


Technological advancements have taken the world by storm and the year 2021 has witnessed breakthroughs that would otherwise have taken years to progress. The pandemic may have taken a toll on our daily way of life, but it has certainly fueled technology and innovation. Just as the pandemic gave a boost to technological advancements, digital currency trading is no exception.

The current generation is prone to digital currencies like Bitcoin, Ripple XRP, Ethereum, Stable Coin, etc. Therefore, the year 2021 can be considered as the year of decentralized finance (DeFi), especially for the blockchain sector. DeFi applications and DeFi platforms abandoned traditional financial systems and ushered in a whole new way of trading digital currencies.

As the rest of the planet grasped the fear of a pandemic, Blockchain acquired a DeFi bug. Cryptocurrency enthusiasts were angry with FOMO-ing for the mining industry’s liquidity, regular borrowing, and protocol funding. In short, DeFi Trends dominated the discourse for much of the year, and in non-traditional financial institutions during COVID-19, notable development was observed.

In February 2021, the total blocked volumes (TVL) exceeded $ 1 billion. This is the dollar value of assets entered into in DeFi deals and completed at over $ 13 billion in fiscal years.

Despite such rapidity DeFi growth, upcoming DeFi projects remain a very young industry with a lot of room for innovation.

If this is true then what DeFi google trends worth watching in 2021?

Let’s explore some of the best DeFi 2021 projects:

However, before continuing to explore, top DeFi Trends, let’s answer the most basic question about DeFi:

What is DeFi?

Decentralized finance, in its simplest form, makes financial assets available to everyone on a decentralized public blockchain network instead of going through intermediaries such as banks or brokers. Unlike a bank or brokerage account, DeFi does not require a government issued ID, social security number, or proof of address. Instead, DeFi primarily refers to a system that allows buyers, sellers, lenders, and borrowers to engage with peers or a rigorous software-based middleman rather than a company facilitating transactions or fintech application development agency.

Challenge growing?

Decentralized finance is still in its first phase of growth. As of March 2021, DeFi contracts had a combined value of over $ 41 billion. While the overall amount of DeFi may seem substantial, it should be noted that many DeFi coins do not offer enough liquidity or volume to trade in the cryptocurrency markets. In addition, there are infrastructure malfunctions and hacks in the DeFi platforms. The rapidly evolving DeFi apps are also rife with scams. For this type of legislation, the duration of DeFi transactions is borderless. For example, who is guilty of cross-border financial crime, DeFi protocols and applications?

The DeFi regulation focuses on smart contracts. Besides Bitcoin’s success, DeFi is the best example of the “code is the law” theory, in which the law is a set of rules written and enforced by an immutable code. The smart contract algorithm understands the buildings and conditions of use necessary to complete transactions between two parties. However, due to a large number of circumstances, Defi platforms can fail.

For example, what if a system crashes because of an incorrect entry? Or if a compiler (responsible for building and running the code) gets it wrong. Who is responsible for these changes? These issues and many more must be addressed before DeFi becomes a mass-market mainstream system.

Now that we know what is DeFi and why is it so popular, let’s take a look at some of the latest trends in the DeFi world:

DeFi Trends

Trend 1 – Cash extraction

The biggest fad that quickly evolved was liquid mining, also known as yield farming. This incentive pushes investors in crypto assets to secure a decentralized network for their currencies. Unfortunately, this provides the required liquidity and inadvertently starts the protocol. Liquid mining is a DeFi Trend which may never be erased.

A recent example of liquidity extraction is the Compound Finance Protocol, a DeFi application that allows any user to withdraw assets or offer liquidity in any of their liquidity pools as long as they have an ethereum wallet. Users earn rewards according to the basics of tp Compound. Last year, Compound launched its governance token named COMP and since then cash mining has become an unbeatable DeFi trend. Anyone who buys or lends using the COMP token is rewarded according to the new protocol. This year, with the development of better DeFi platforms, automated production farmers such as liquid extraction has been further revolutionized.

Trend 2 – Ethereum may be the next big thing


Ethereum is usually a part of the conversation whenever decentralized funding and the latest DeFi 2022 trends are discussed. Ethereum better supported DeFi in 2021 is expected to follow a similar path. The idea that DeFi is for everyone’s loyalty when it just circulates prices from $ 5 to over $ 30.

Cross-chain technology has become one of the newer forms of the DeFi trend in 2021 because it allows the transmission of information between different blockchain networks, facilitating interoperability for users. Matic, an Indian blockchain scalability platform also referred to as the “Internet of Ethereum Blockchain” is a vital effort to evenly distribute the load of the DeFi industry across multiple blockchains. It’s a perfect example of cross-chain technology and the solution to some of Ethereum’s current issues, including high fees, poor user experience, and lower transactions per second (TPS). MATIC seeks to build an ethereum compatible system decentralized blockchain multi-chain ecosystem and help merchants trade better.

Trend 3 – Stablecoins are the top DeFi trend

Stablecoins - the best challenge trend

Another industry where DeFi is emerging at a rapid pace is stablecoin activity. Stablecoin was added to $ 20 billion in one year, and stablecoin supplies topped $ 26 billion. With around 79% market dominance, Tether USDT is the largest participant. The US dollar continues to dominate in a stable market, with Circle USDC being one of the other most important figures. However, it is predicted that steadfast coins full of fat may start to eat up market share as the industry matures and government stimulus packages materialize.

Trend 4 – Monetize the gaming industry

game industry monetization

More than 2 billion people remain engaged in gambling worldwide and spend approximately $ 159 billion annually. With more and more people dedicating hours to this form of entertainment, the blockchain gaming industry will experience huge Growth of DeFi.

Blockchain game is based on the simple concept of players performing certain tasks to mine tokens. Now, when the industry is monetized, DeFi protocols will be required to ensure in-game portability. Last year, BitSport, the crypto gaming platform created a way for crypto owners to sponsor tournaments of games. Such tournaments and more gaming platforms are also expected to increase this year and become one of the best DeFi projects for 2021. By monetizing the gaming industry, DeFi will certainly set an engaging new trend for traders.

In summary

With advances in blockchain security, 2021 will undoubtedly be the most exemplary year for decentralized finance. By expanding its blockchain community, DeFi secures its presence. In light of the trends outlined above for the nascent industry, 2022 could turn out to be a more important year.

There are several reasons why DeFi fans and crypto enthusiasts continue to engage in major DeFi 2022 trends and are eager to invest in the next DeFi projects.

Are you ready for such a change? If you think you are ready to soak up the changes in your business ideas and use the blockchain application development technology to engage customers, you can refer to appinventiv, a trustworthy and reliable site fintech application development company in the United States. A financial services consultancy it would help you expand your decentralized journey.

blockchain application development

Frequently Asked Questions

1. Why is DeFi popular in 2021, 2022?

The pandemic has paved the way for digital commerce and cryptocurrencies to gain an edge in the market. The year 2021 has witnessed DeFi trends one could only imagine. Liquidity Mining, Blockchain Gaming, Ethereum trading, and more have kept digital traders engaged. It has been estimated that these google DeFi trends will continue to witness DeFi growth in 2021 as well as 2022.

2. Is DeFi growing?

It can still be said that DeFi is in its infancy and is still under development by the fintech software developers. DeFi applications and DeFi platforms still need a lot of improvement to become more robust and reliable for users.

Chirag Bhardwaj

Chirag Bhardwaj

Blockchain Evangelist

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