DeFi (short for Decentralized Finance) is an alternative form of finance that does not rely on the traditional centralized financial services initiated from financial institutions or intermediaries such as banks or exchanges that use outdated legacy systems. Instead, DeFi utilizes smart contracts built on the blockchain. DeFi brings a whole system of security and opportunity to most financial services that are available today — savings, payments, loans, investments, trading digital assets, insurance, derivatives, and many other financial products without the centralized institutions.
Decentralized finance was created as an alternative means to providing financial solutions with true integrity, availability, and transparency. Within the last 3 years, DeFi has shown more promise than any other field in crypto for real-world applications and as a technological means to innovate and solve problems found within the traditional financial markets.
Until this year, DeFi has had very little innovation in development. The term is believed to be first coined by MakerDAO and their decentralized collateralized ETH loans in late 2015. Before coming into a true proof of concept form in 2017. But, aside from collateralized loans, it had very little growth in features and applications. Then, with the release and innovation of projects like Compound, Synthetix, Ampleforth, UMA, Uniswap, and many many more, DeFi has grown into a field of its own. The TVL behind DeFi projects have grown EXPONENTIALLY since 2019. This growth is so mind-blowing that looking at just the growth from April 2020 to the time of this article's writing, TVL went from a little less than half a billion dollars to $15.98 billion.
So, why is it that even though TVL has grown from approximately $3.3 billion to $16 billion, that DeFi projects are not continuing to flourish but actually stagnating in growth and, in some cases, are even losing traction?
The answer is pretty simple. I guess it’s what you would call hidden in plain sight…..
Degens and other DeFi enthusiasts alike have participated in or sometimes even masterminded the fraud/scamming/rug-pulls/Pumpanddump schemes of DeFi projects listing onto Uniswap. We would go as far to say that there have been more cases like this within the last 6 months than there have been projects launched between 2017 and 2019. In 2020 alone, there have been more than $150 million in losses through rug-pulls, scams, and exploits. This does not include hacks and this is only the losses that have been reported officially. It’s just sad and insane. We are killing our own market.
This is just the start though. There are also very FUNDAMENTAL reasons for the stagnation of the growth in DeFi.
History repeats itself…⏳⏰
In 2017, after the launch of the first tokenized projects on top of the Ethereum network and the ICO boom we struggled with the same issue that we see now repeating in DeFi. For years, crypto project UI/UXs were not made for ease of use. They were overly complicated and hard to navigate. Did they function properly? Yes. Was any of it a simple process? No.
This issue dates back many more times in history, usually at the brink of massive technology innovations(I.E. Electricity, steam-engines, automobiles, computers, the internet, mobile devices, etc..).
Because initially, the people who are innovating at the bleeding-edge aren’t really motivated to try to persuade/convince and educate everyday consumers on the importance of the technologies in their innovation. For them, adoption is imminently a matter of time, and it’s just easier to sell to people already educated than it is to try to educate new users.
This is the classic problem until the Google/Facebook/Amazon type companies are born when they find ways to continue innovating whilst accomodating to new adopters with simplified features and convenient UI/UX.
So, realistically speaking, they have been pulling these stunts on the limited amount of existing and some “newer” DeFi enthusiasts and they are being burned out. Lowering the existing traction and interest that should actually be catapulting DeFi adoption rates to the millions now who have their eyes on Bitcoin, the mothership.
Yes, Bitcoin adoption is as high as it has ever been with governments allowing banks to do digital assets custody. Institutions like Microstrategy and Paypal have started showing signs of interest. That will soon start trickling into smaller cap alts over time but, only if those projects can offer a more convenient form-factor with a lower barrier of entry.
Supreme Finance, based on the adoption of DeFi protocols that already exist already on the market, targets what we call crypto-muggles, who are experiencing limited access to crypto and other decentralized financial services, a platform that allows for seamless integration for both Degens who are DEEP in the scene or the everyday Joe. Supreme Finance aims to stimulate users who are provoked by an existing sensible system of exposure and classification into experiencing the benefits and open sources that could only exist on decentralized finance. We are spending countless hours into even more sleepless nights to usher in a new level of ease in adoption for the masses. Our mission is to enable a future where people all over the world can take control of their financial futures without having to meet a certain tax bracket or be in a region with the right infrastructure, or even rely on a centralized 3rd party for their financial needs. DeFi for Degens? Or DeFi for the masses?
Get ready for the $HYPE….
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