Against the popularity of NFTs spawned by BAYC and Punks, is there still an export breakthrough for DeFi?

March 20 News One of the most important news   in the crypto industry this month is undoubtedly that BAYC parent company Yuga Labs announced the acquisition of Larva Labs’ NFT series CryptoPunks and Meebits, and will soon grant CryptoPunks and Meebits holders with BAYC and BAYC. MAYC holders have the same commercial rights. Not only that, but statistics show that as of January this year, the total sales on the NFT chain has exceeded $28 billion, a record high.

However, in the context of such a hot NFT market, the overall performance of the cryptocurrency market has continued to be sluggish, and investor returns have been dismal. The “strongest king” Bitcoin is no longer in the limelight. It once plummeted below $33,000 at the end of January. Although it rebounded slightly, it is still hovering in the $40,000 range. However, in such a highly volatile “bear market” at this stage, the DeFi protocol, as the “outstanding star” in the cryptocurrency market, has performed well. Those investors who are unwilling to leave the market completely adopt corresponding strategies through DeFi protocols, and can still obtain considerable returns during the bear market-this can not help but make many investors start to turn their attention to the field of decentralized finance again, and try to use DeFi is the breakthrough. Some established DeFi projects are trying to attract investors’ attention again through innovation. They continue to expand scalability and flexibility by upgrading their versions by introducing new features such as cross-chain asset liquidity, community contribution tools, Gas optimization models, and high-efficiency models. Not only that, but some rising stars are also bucking the trend and gradually stand out from the track.

Some of these rising stars are innovative savings protocols that balance interest rates by coordinating block rewards from multiple different PoS consensus blockchains, ultimately achieving stable yield storage rates. This approach can provide fintech companies, crypto world natives, and regular investors with stable, high-yielding rates for DeFi. As the market’s demand for high annualized wealth management continues to rise, such DeFi protocols can provide high annualized returns and convenient operations, thus attracting the attention of many investors and trading platforms, and several exchanges have launched Such financial products and services.

There are also some DeFi protocols that have adopted an automated market maker model, such as using a dual-token system to reduce the selling pressure of the protocol’s native tokens, while allowing users to become the owners of the protocol. In addition, there are some DeFi protocols that utilize algorithms to maintain the stability of the native token, allowing users to liquidate their positions or otherwise repay their outstanding debts at any time, but such protocols do not require early repayment or liquidation, and the system is When the income is returned, the debt generated by the user is effectively reduced, and the potential liquidation risk of the collateral is eliminated at the same time. If investors repeat the above operations, they can basically obtain a certain compound interest, which has certain development potential in the field of DeFi “money Lego”.

Indeed, this “little bear market” has brought a certain impact to many investors. But from the current point of view, investors mainly fund institutions and large listed companies will not withdraw from the market in the short term. Not only that, institutional investors are also gradually increasing; and at the regulatory level, the US Securities and Exchange Commission has approved A futures-based bitcoin exchange-traded fund is in place, and a spot bitcoin exchange-traded fund is also expected to be listed within the year. Therefore, from the overall point of view, the “little bear market” encountered by the DeFi market this time is different from the overall decline in 2018, and has limited impact on long-term development. 

In the long run, although the DeFi market environment is relatively sluggish today, it may just be the industry preparing for the next bigger rally. As an important part of the encryption ecology, as long as the DeFi market follows the trend and makes timely changes to provide users with valuable products and services, it will still have great development prospects, and will promote a longer-term and more benign digital economy. developing.

Although the crypto asset market has been in a downward trend since the beginning of 2022, many people are worried about the future development of the DeFi market. However, some leading DeFi protocols do not seem to have given up hope and continue to push the industry forward by releasing new products. Not only that, but the rising stars of the DeFi track are not to be outdone, and have brought us a lot of surprises through innovation. All indications are that DeFi seems to be making a comeback. Of course, whether the DeFi market can finally revive the “Summer” glory of 2020, perhaps only time will tell us the answer.