Bitcoin is unstoppable, and so is DeFi.
As the cryptocurrency industry slowly broke records, the decentralized finance [DeFi] realm also hit new milestones.
On the 7th of October, the total value locked in the deFi industry hit $21.86 billion, according to DeFi Pulse stats. After growing at a formidable pace all throughout last year, the industry has seen strong interest in 2021 as well. The latest figure hinted that its adoption and utility could be permeating as the main trends in the months to come.
Maker at $4.1 billion, Aave at $2.83 billion, and Uniswap at $2.68 respectively continued to be the top three protocols in the leaderboard. Maker has more than 19% market dominance while the price of its token, MKR has surged to the highest levels in more than two years. At the time of writing, it was valued at $1,078 after an appreciation of 36.83% over the last 24-hours.
What’s in Store?
Decentralized Finance realm saw billions of dollars being poured into its projects. Just recently, ShapeShift, the Colorado-based non-custodial exchange revealed its plans of directing orders through deFi applications to dismiss know-your-customer [KYC] regulations.
The cryptocurrency platform intends to steadily get rid of its own centralized trading activity [which includes its KYC policy] in favor of a decentralized alternative as it plans to become fully DEX-based for customers.
This was a positive development for the ecosystem which has been branded as a bubble by many. As institutions continue to enter the Bitcoin ecosystem, the industry could gain more up steam and see institutional money and professional traders wanting exposure to the space.
The one thing that could still hurt the decentralized finance sector was the regulation part. The financial utopia that the industry aims to offer has met with several setbacks. Billions of funds have been lost in 2020 alone as the space saw multiple breaches and security hacks. The damage to its reputation can only be solved by comprehensive and effective security auditing.
Will DeFi Replace CeFi?
The industry is still quite nascent and while it has become increasingly relevant to people, there is still ample room for change and improvement. Several models and practices of its centralized counterpart can be deployed to the decentralized structure to increase efficiency while shielding it from malicious entities.
Hence, it would be too early to say whether the space can replace CeFI, However, 2021 could definitely see several DeFi-CeFi synergies.