DeFi Is In Hype: What’s The Next Big Thing?

In just three years, DeFi has gone from being non-existent to the hottest trend within the cryptocurrency market. The market cap for the top 100 DeFi tokens currently stands at an all-time high of $15 billion. Also, the number of tokens has crossed the 1,000 mark. The total value locked (TVL) on Ethereum also stands at over $10 billion, ten times what it was just a few months ago. It’s just in February DeFi proponents were celebrating the TVL breaking past the $1 billion mark.

Then in June, Compound launched its governance token COMP that allowed individuals to earn interest through yield farming, and the DeFi sector exploded. Yield farming allows one to earn rewards by staking tokens on a protocol to provide liquidity.

DeFi tokens exist on blockchains that support smart contracts, which allow for the creation of dApps. Ethereum being the first platform to bring the technology around, has been the biggest beneficiary, with most DeFi projects based on its protocol. This has boosted Ethereum investment on platforms like PrimeXBT, where users of all experience levels can easily design and customize layouts to best fit their trading style when trading the asset using CFDs, meaning they don’t have to own the asset and profit if its price rises or even falls.

Why is DeFi Booming?

There are many reasons why most of us are witnessing this explosive growth within the DeFi sector. First of all, there is growing acceptability of what this technology is capable of, like giving access to finance and other critical services to the average person. These services would be out of their reach under normal circumstances. With DeFi, it’s easy to access loans without a credit score or even KYC. Then there is autonomy through decentralization, allowing individuals to control their finances and other aspects of their lives. And this is crucial given that today there are over 1.7 billion adults around the world that remain unbanked.

Additionally, DeFi protocols allowing people to stake tokens and earn rewards have sparked a kind of craze reminiscent of the ICO boom. Everybody wants to get in on the action and make hay while the sun shines. It’s these benefits and many more that are fueling the growth within the sector.

Consequently, the list of projects within the DeFi sector keeps growing. Some of today’s applications include those for staking, payments, lending and borrowing, alternative savings, decentralized exchanges, analytics, derivatives, insurance, KYC and identity, and many more serving different industries.

Now, What is Next?

The big question now is, what is the next big thing after the DeFi boom is over? The answer to this question can be found in analyzing how the blockchain industry has evolved. In less than a decade, blockchain and cryptocurrencies have gone from something only known by a few tech geeks to a world phenomenon threatening to change every aspect of our lives. Bitcoin was the first protocol which was meant to allow for cashless transactions over a decentralized network. Then Ethereum came along and added smart contracts that allowed for the creation of decentralized applications. And the evolution is still ongoing as people try to develop better products that can serve the masses.

It is believed after DeFi; the next step is platforms that combine the best parts of DeFi with centralized systems to offer more compressive products that cater to a large audience. And this is already starting to happen. DeFi, as it exists today, is limited by several factors, including scalability, liquidity, and usability issues. Thus, it’s not suitable to serve the masses, making it difficult for mainstream adoption.

That’s why a platform like MinePlex is offering a CrossFi solution; one that combines banking and blockchain to create applications that solve problems the average person experiences. The project is offering a mobile crypto bank that will allow individuals to use cryptocurrencies easily on their phones for everyday transactions like paying bills, buying groceries, paying for parking tickets, and so on.

Since the project is trying to take blockchain to the masses, scalability is critical. That’s why its solution is based on Liquid Proof of Stake (LPoS) architecture, which is secure and highly scalable, allowing users to enjoy operating speed, decentralization, and simplicity.

PlasmaPay is another project trying to take DeFi to the masses. It has a sophisticated distributed ledger protocol where people can develop robust financial tools that combine the best of centralized and decentralized systems and offer them as beneficial products for the masses.

The potential for blockchain is immense, and many know this. Its benefits are apparent to all. But several challenges need to be solved before it can truly go mainstream. The advancements seen within blockchain have come from a desire to solve some of these issues. After all, necessity is the mother of invention. Now the race is on to take the tech to the masses. And projects combining DeFi and centralized finance systems have already begun popping up

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