As a rollercoaster year for the crypto world draws to a close, it is fair to say that 2021 was the year of DeFi. Decentralized finance or DeFi refers to the financial applications run by smart contracts on a blockchain, typically a permissionless (ie public) chain. DeFi differs from traditional finance not so much in terms of the types of service it seeks to provide, but rather in how it performs them. DeFi at a basic level, digitises and automates the contracting processes, which improvse efficiency by reducing costly and inefficient intermediation layers.
And the public have taken to DeFi in a big way. Having took off in 2020, DeFi grew at an unprecedented rate this year with $93 billion worth of DeFi assets in the crypto market as of June 2021, up from only $4 billion incredibly just three years ago. So what is that is attracting so much investment and will it continue in 2022?
DeFi Provides Choice
A big draw to the DeFi world is choice. People now have not just viable alternatives to traditional finance but also far more choice. Nowadays, a decentralized cryptocurrency exchange such as Tytanid will offer more than just the exchanging of digital currencies. With the ease in connecting to crypto wallets and compatibility with thousands of other digital coins, anyone with a phone and internet connection can trade crypto in a myriad of different ways, including binary options.
NFTs have been the star of the DeFi world. As of 15 November 2021, the aggregated sales value over 30 days amounted to approximately USD162 million dollars. The concept of digital ownership is here to stay and will only gain in value as 2022 progresses.
DeFi gives people the choice in everyday financial actions like savings or staking as it is known in the DeFi world, Thanks to Ethereum 2.0’s proof-of-stake campaign and institution investors’ interest in internet bonds, the staking industry is now an $18 billion behemoth and showing no signs of abating.
People’s choices have been improved with advancements in blockchain technology, making scalability and cost-effectiveness even more of an appealing option than ever before.
So, with the likes of Solana, Cardano and BSC joining Ethereum in leading the DeFi world, we can expect even more growth in 2022 and the years ahead.
