A static situation has taken over the cryptocurrency world, with Bitcoin being close to $30,000 for a while and Ethereum being able to pass the $2,000 mark for a short time. We can view the same situation even with DeFi, where no change has occurred. Different projects temporarily swap TVL because of derivative changes. A week later, the same amount of money goes back into the first project.
The same situation is present even on different platforms, such as Uniswap, a growing network of DeFi apps as well as one of the niche’s defining projects. Uniswap is currently struggling to register a blip ever since it released its latest version.
Following this track of stillness will clearly end up meaning that the sector’s good days are clearly over, but does that mean that DeFi has no future, or what is next for decentralized finance?
First things first, let us break down the situation based on the gathered data.
Based on DeFi Llama, the niche still has about $45 billion spread across different projects. That is a significant drop from its all-time high of $178 billion, which occurred in November 2021; however, there are also fewer projects (ahem, Terra) at this point.
Nowadays, almost all of this value is derived from liquid staking. With two of the ten largest projects in this category being Lido Finance (with a valuation of $14.5 billion) and Coinbase’s staked Ethereum (with a valuation of $2.27 billion), Since Ethereum was able to successfully switch to a proof-of-stake consensus network, which is what gave rise to the term “real yield,” both have seen a significant rise in popularity.
Instead of various DeFi projects (again, Terra) playing shell games, the return you get from staking ETH is about as legit as it gets—at least for cryptocurrencies.
There are three routes that will lead to the DAO Treasury balances reaching $100 billion.
Cryptocurrencies and non-fungible tokens (NFTs) of smart contract connections by developers on a daily basis. Those individuals who stake their ETH with the aim of maintaining the network’s integrity provide an outstanding service to the community and are properly compensated for their diligent endeavors.
One route, one possibility into the future: broken down into two parts, the future of decentralized finance (DeFi) and the interest in generating higher yields First, the future of DeFi, specifically the development of DeFi products that are influenced by the concept of “real yield,” implies that these products are designed to generate actual profits or returns. Second, interest in generating higher yields, which is a more complex project called Eigenlayer, It suggests that this project is taking advantage of the current trend.
Another route, another possibility into the future: Products sold by DeFi that were constructed on top of and around the rise of the real yield meme. In a previous edition of Decrypting Defi, the Eigenlayer project was disassembled, and it is also riding this wave. This project is significantly more complicated.
There is also talk among various institutional players about the possibility of developing even more products in an effort to cut another one or two percentage points off of that real yield. People should be sure to keep a close eye on that trend as it continues to develop.
The last route, possibility into the future, is the manner in which an additional type of yield, namely that of real-world assets, is supercharging projects such as MakerDAO and, more specifically, its native stablecoin DAI.
All centralized businesses are alike, but each DAO is decentralized in its own way.
The DAI Savings Rate (DSR), which used to be only 1%, is now almost 4% for people who put stablecoin into the contract. This increase is made possible in part by the money made from traditional finance (tradfi) deals that the community has already agreed to.
In June of last year, the Maker community voted to buy $500 million worth of short-term U.S. Treasuries and bonds from BlackRock. Profits from these and other deals like them are now being shared with people who own DAI.
Even though these two futures may not be as exciting as high-yield farming or the food coins that were popular in the past, they still offer opportunities. Even though it’s not a lot of money, it’s considered honest work, as fans used to say in the summer of 2020.