Forbes: Will the DEFI cycle appear in this cryptocurrency bull market?

Original title:Will there be a defi cycle in this crypto bull run?

Original Author: Sean Lee

Original compilation: vernacular blockchain

As the encrypted market enters a new round of bull market, the question that people are most concerned about is whether decentralized finance (DEFI) will become the focus again. Although the DEFI boom in 2020 has promoted the development of the entire blockchain ecology, the cycle of this round may adopt a more mature and rational way to emphasize practicality and long -term sustainability.

1. Why DEFI is more important than ever

Defi has surpassed its experimental origin and has become the cornerstone of blockchain innovation. By using smart contracts and decentralized infrastructure, it provides democratic financial service channels for millions of users around the world.

DEFI is no longer a marginal experiment, but a verified disruptive technology. In 2021, about 1.4 billion people around the world did not have a bank account, and another 1 billion people belonged to people with insufficient banking services. DEFI provides a way to financially tolerance, and users can bypass traditional financial intermediaries. Today, stabilization coins have become the pillar of the market, and DEFI uses the platform, decentralized trading platform (DEX), and pledge agreement to completely change the way of capital flow.

2. The current bull market

To evaluate the possibility of the DEFI cycle, we need to analyze the current market dynamics. Among the premium bull markets, Bitcoin and large asset prices have risen again, with a total market value of more than $ 3 trillion. However, the growth of DEFI does not only depend on the optimism of the market. Key indicators that need to be followed:

1) Market liquidity

The rise in the total locking value (TVL) on the DEFI platform indicates that the user's confidence is enhanced. The latest data shows that TVL has risen steadily and is currently more than $ 75 billion.

2) Interest of institution

Organs such as Blackrock and Goldman Sachs are exploring DEFI infrastructure, which indicates that the trend of mainstream adoption is forming.

3) User growth

The wallet activities in the DEFI agreement increased by 30%month -on -month, reflecting the continuous improvement of user participation.

3. The rise of DEFI innovative

The growth of DEFI 's total locking value (TVL) has spawned a number of new innovation solutions in the market. Among the emerging players who developed the next stage, Nudge stood out. The company introduced a new basic mechanism in the DEFI ecosystem: programmable incentive payment, called "NUDGES".

The Nudge method is called "re -assigning the original" and represents the transformation of resource utilization on the Defi platform. Users can get rewards by re -assigning assets, and the agreement obtains measured and scalable users to obtain and reserve tools. This concept surpasses the traditional Token reward, providing a more targeted and more effective mechanism for the growth of the ecosystem.

Maier added: "The inspiration of the promotion mechanism comes from many agreements to the same batch of users and capital. By allowing users to make a profit through re -distribution of resources, we have created a new incentive mechanism to make their actions and a wider ecosystem of ecosystems systematic systems. The success of success is consistent "

Other emerging companies include Convex Finance and Tokemak. Convex Finance is based on Curve Finance. By simplifying rewards and increasing incentive measures, it has added income opportunities to liquidity providers and CURVE pledges. On the other hand, tokemak acts as a decentralized liquidity provider to optimize the capital deployment of the entire ecosystem through its unique liquid reactor.

Although the DEFI solution centered on retail (such as NUDGE) aims to make individual users more likely to obtain financial instruments, there is another type of DEFI application focusing on institutions' public utilities, which brings up between traditional finance and decentralized systems. gap. For example, the Project Guardian of Singapore explores the potential of decentralized financial infrastructure by testing the token bonds and deposits to explore the potential of decentralized financial infrastructure by testing the token bonds and deposits. With the support of the Singapore Financial Administration (MAS), it aims to combine the token assets with the liquidity pool of licenses to provide a safe and scalable blueprint for institutions.

4. The role of supervision

One of the key factors affecting DEFI in the future is supervision. As governments from all over the world strive to meet the challenges of regulatory decentralization systems, the impact of new policies on DEFI cannot be underestimated. Regulatory clarification may promote DEFI to the mainstream or inhibit its growth.

Recent development has shown that the industry is giving good or bad. EU's crypto asset market (MICA) regulations aim to create a comprehensive framework for encrypted assets (including DEFI Agreement). Although this provides a path for legalization, critics believe that too strict requirements may hinder innovation.

In the United States, the US Securities and Exchange Commission (SEC) has strengthened the review of the DEFI platform, emphasizing the necessity of complying with the existing securities law. This has prompted many projects to consider adopting a decentralized autonomous organization (DAO) structure to cope with regulatory obstacles. "Although supervision is necessary, it must be balanced to promote innovation," Maier said.

In order to better understand the consideration of supervision, I recommend reading the "Key Elements of the Effective DEFI Framework" issued by the Cryptocurrency Innovation Committee. I am one of the co -authors of the book. Here, we outline the principles of formulating policies to encourage innovation and ensure consumer protection and financial stability.

5. What can be promoted this DEFI cycle?

In this bull market, there are several factors that may cause the DEFI cycle:

1) Interest of institution : With the exploring blockchain technology of traditional financial institutions, DEFI can act as a bridge between centralized and decentralized systems.

2) Layer 2 expansion solution : emerging participants in this field are making DEFI easier to access and cost -effective, which may promote users to adopt.

3) Token of real world assets : integrating real world assets into the DEFI platform can attract wider audiences and improve practicality.

Maier added: "The next DEFI cycle will give priority to practicality rather than hype."

6. Conclusion

Although the uncertainty of regulatory and market sentiment still exists, the fundamentals of Defi are still strong. With the leadership of innovative platforms such as Nudge and the continuous progress of blockchain technology, DEFI is expected to recover in this bull market. The next few months is essential for determining whether the DEFI can overcome the challenge and regain its position as the driving force of the encryption ecosystem.