There is no doubt that NFTs will receive the most attention in the crypto space in 2021.
While some market watchers foresaw its rise in popularity and usage not long ago, its rapid adoption among traditional and crypto-native players has surprised most of us.
The hype surrounding punks, apes, and rock has even overshadowed the booming DeFi industry.
However, I expect DeFi will be in the spotlight again in 2022, with a second “DeFi summer” like 2020.
There are two main reasons :
1) Yield opportunities may be more sought after, especially envisioned in a sideways or bear market.
2) and the establishment of a standardized version of this is DeFi, I call RDeFi.
Attractive Earnings Opportunity
Since the “DeFi Summer” of 2020, many new and innovative projects have emerged, while established projects have further developed their products.
One trend we’ve seen in 2021, especially in the first half, is different types of earnings generation.
Because DeFi offers very attractive yield opportunities, ranging from 3-5% for conservative products to 30-40% for more aggressive stablecoins, depending on investor risk appetite .
Many new crypto entrants who entered the space during the recent bull run will start exploring DeFi.
For some, this will be the “traditional” path from Bitcoin to Ethereum to DeFi.
For others, it will be from NFTs to Ethereum and then DeFi.
No matter how you get into DeFi, the result is the same: DeFi adoption increases , which could lead to a DeFi 2.0 summer.
Avoid high gas fees
Although ETH2.0 upgrade is planned for the first half of this year, but I believe the Ethernet Square in most of the year there will still be dealing with very high costs of network use .
This won’t stop DeFi adoption, but it will push investors to use more layer 2 scaling solutions.
Examples include Arbitrum, Polygon or Optimism, and other smart contract platforms such as Polkadot, Solana, Avalanche or Terra.
I’m very excited about Polkadot’s DeFi platform, Acala , which recently became one of the first projects to get parachain slots on Polkadot .
Also, it will be interesting to see Solana getting a lot of NFT shares from Ethereum due to lower network fees.
Its high TPS and scalability allow for DeFi applications that are not possible with Ethereum.
The emergence of “RDeFi”
It is believed that in 2022 we will see the emergence of RDeFi (Regulated DeFi).
This may sound contradictory to some, but I think this is the next evolution of DeFi.
I expect, except we all know and love DeFi, there will be a parallel DeFi field, there is a regulatory package subject to compliance with financial regulatory requirements of traditional dress .
Such RDeFi can only be accessed through the same “KYC” process used by traditional investment vehicles and must meet the same anti-money laundering standards.
We’ve already seen early examples of RDeFi projects in 2021, with lending protocols Aave and Compound both offering compliant versions of their platforms, AaveArc and Compound Treasury, respectively.
This trend is likely to continue, I expect other types of DeFi projects, such as DEXs, to offer regulated versions of the platform as well, and I wouldn’t be surprised to see a UniswapPro version next year.
I would also like to see more projects that are regulatory compliant from the start, such as Swarm Markets, which received regulatory approval from German regulator BaFin earlier this year and operates as the first regulated DEX.
Additionally, I expect large exchanges like Coinbase or Kraken to provide their investors with access to DeFi applications through regulated gateways.
Since the burden of self-custody and private key management is avoided by using centralized exchanges , they can provide a DeFi platform without having to download a web wallet or interact directly with dApps.
Such products will bring further adoption and liquidity to the space.
While some crypto experts will argue that DeFi applications with KYC requirements go against the spirit of decentralized finance, I prefer to define DeFi as an owner-operator economic model rather than being provided by for-profit entities Serve.
The conditions of access to services do not change the economic model. The products offered by RDefi develop a new customer base for these platforms, with which regulated financial institutions will not be able to interact.
Additionally, regulation can increase customer protection and hold platforms accountable , which may also be preferred by those who are not restricted by regulated services.
I believe this development will help the field mature. RDeFi will play a key role in further increasing the liquidity of DeFi platforms, in fact it is the only way for regulated institutions to enter the space.
While I expect NFTs to continue to attract interest, especially in relation to the metaverse and blockchain- based games , I believe the DeFi space will regain some traction.
DeFi has matured over the past year and it remains a very innovative field. High yields will continue to attract investors, while RDeFi will take Defi to another level, increasing adoption and liquidity.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/looking-ahead-to-2022-the-new-defi-2-0-summer-and-the-emergence-of-rdefi/
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