Essential Development For Crypto & Financial Service

Love It Or Hate It
Decentralized finance (DeFi) shook the Crypto world back in 2020 and has since gone on to impress, as well as disappoint. DeFi has managed to resolve many of the issues associated with financial services, as well as transactions. These primarily being, friction and custody. As a result, the sector has managed to amass a strong community of advocates. However, there are also those who appear to be somewhat cautious, and even opposed to the idea.
This is largely due to common risks such as hacks, exploits, volatility, and impermanent loss. For some, these risks are simply too much of a sacrifice, even with all the benefits DeFi offers. However, if we look back on 2022, it is rather clear that the real casualties were actually centralized entities. Had these entities been governed by code and smart contracts, we would have witnessed a somewhat different outcome.
DeFi simplifies financial transactions and ultimately ensures self-custody. This is exactly what the world needs, especially, right now. The current collapse of the banking sector is evidence of this very fact. However, the cautious among us have a point. The industry is in desperate need of maturation. This is the “process” that is often to thank for great ideas becoming great technological breakthroughs.
The Future & DeFi
In many ways, this is likely to unfold over the next number of years. There are those who are more than happy to continue utilizing DeFi and dApps. Developers in the space are also likely to become more effective and efficient, in terms of safety and security. There are ways that DeFi can be improved upon that we perhaps have not even considered. The point is… DeFi is still very much in its formative years.
In other words, the product we know and use today might look very different in 2030. Bear markets have a way of sparking creativity, and then unleashing ideas on an unsuspecting market. Heck, that’s how DeFi was born! The 2018 bear market is where DeFi was born, and only later on coined the term, DeFi. Just like with Cryptocurrency, in general, the idea and the manifestation of the idea evolves over time.
Crypto is now a lot more than simply Bitcoin. I would argue that in years to come, DeFi is likely to be a lot more than what we understand it to be today. As with the idea of tokenization, DeFi is very much a logical progression, in terms of the financial world, and how we transact and communicate within it.
Stubborn Resistance
One has to consider that in many ways, DeFi makes much of the current infrastructure unnecessary, and ultimately, redundant. The concept of banking and the creation of certain financial products were created for the sole purpose of profiteering. There are those who have become exceedingly wealthy through the creation and maintenance of these systems and mechanisms.
At the end of the day, this is the issue pertaining to Crypto, as a whole. This group of individuals relies upon the traditional infrastructure as a means of wealth creation. It’s highly unlikely that they have even considered losing. Crypto will be resisted with everything they have in their power, and at their disposal. This is not a battle for the introduction of new technology, but rather a battle for power and money.
A horse and cart-empowered transportation business had nothing to gain with the introduction of taxis, alongside the invention of the automobile. Not only that, but it had everything to lose. It’s very much a similar dynamic. However, innovation has a strange way of eventually overcoming, despite resistance, and even attack.
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Final Thoughts
Just as Crypto has evolved over the years, I believe DeFi is facing a period of maturation. A period that is likely to make it more attractive to those who are perhaps still rather unsure, and even fearful. With this in mind, one has to consider that DeFi protocols are likely to look and operate a lot differently than they do today.
In many ways, people want what DeFi offers… they are just yet to realize it. Leading minds and developers are now faced with the task of perfecting and “repackaging” the DeFi idea in such a way that it will become even more desirable, and possibly a lot safer. DeFi is definitely not done, but it’s also definitely not ready for mass adoption. Like with many things… it’s a journey of approximation. All the best, see you next time!
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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.