How Will DeFi Look In 2021
As people are still hyped about Decentralized Finance (DeFi) in the cryptocurrency world, DeFi is also getting more positive responses. This is because new DeFi innovations and products start to emerge into the surface, each with its own benefits to offer. This time we’re going to discuss an interesting topic that probably some of us are wondering about. Is DeFi here to stay, or is it just going to be a one-hit-wonder?
When it was established in 2018, DeFi has transformed more than just an open financial system, but into a whole industry of its own. It has evolved creating new types of popular products and innovations in the market. One of them is Yield Farming and it’s the hottest trend in the DeFi ecosystem, which we talked about in the previous blog. But the question now is, is it going to be the future financial system? What does the future hold for DeFi? First, we have to know the pros and cons of DeFi before we can get to the bottom of it. Defi removes third parties from all kinds of transactions, which offer transparency and time efficiency as well. But wait there’s a catch. Since DeFi is based on smart contracts, there are things that you should be aware of, the most common problem is software bugs and hacks.
Smart Contract Audits
An audit in smart contracts is essential. Audits are supposed to ensure that the code in the smart contract is secure. While an audit is essential in smart contracts and DeFi products, there are still many developers who deploy their code without an audit, which can greatly be exposed to the risks of hacks and scams. The main reason is that audits are expensive. And not many DeFi projects can afford an audit. But worry not for NOBI users! NOBI recently teams up with one of the leading DeFi protocols in the market that’s been audited: AAVE. Where we will have an exciting NOBI TALKS LIVE episode on our Youtube channel this 18th of December. See how this partnership can offer users so they can join the DeFi ecosystem the easy and safe way.
The Future Itself
Back to the topic. Many still believe that DeFi is the future of the financial system, although it has its pros and cons.
DeFi exploded in 2020, with total value locked (TVL) growing from less than $1 billion in January to more than $15 billion, and it’s likely to grow further in 2021. On the other hand, it is unlikely we will see institutional investor interest in the sector. Not only DeFi, but it has also been a historically successful year despite the pandemic for Bitcoin. Which hits a new all-time high of $19.850! This is fresh air for the cryptocurrency world and also for DeFi in 2021.
For now, DeFi still takes center stage in the cryptocurrency world. For the cons of DeFi such as software bugs, 2021 will be a year where DeFi must grow and regulate itself enough to keep a strong reputation of safety for their customers. Otherwise, the year will be a tough one to endure. That is a glimpse of what we can expect from DeFi in 2021. With the development of DeFI, it is likely that DeFi-based crypto assets will also develop.
So, what’s your take on DeFi? Will it stay?
Join us on a special NOBI Talks Live discussion with Stani, CEO of AAVE, and Lawrence, CEO of NOBI on Friday, 18th December 2020 to find out more about how you can join the DeFi ecosystem the easy and safe way with us. Register now at Loket.com
P.S: A special year-end giveaway from NOBI & AAVE is waiting for you. Be sure you don’t miss it!
See you there!