A Future In DeFi & RWA

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30 Oct 2024

Cycles Impacted By The ETF Effect?
Crypto investors have been expecting a shift regarding the traditional 4-year cycle for some time with many wondering whether BlackRock and Bitcoin ETFs are the catalyst for change. Bitcoin has recently broken out and is trading at approximately $73K. This is promising regarding the continuation of the 4-year cycle. It’s a bit of a stretch this time around. However, the price action is still within an acceptable range.
Regardless of whether there is a shift regarding the 4-year cycle, it is being tamed with every cycle. The most recent bear market was not as harsh as previous bear markets. This is quite surprising considering the collapse of FTX and the carnage it created as a result. The peak of 2021 was also a lot less than expected. However, we did suffer the China mining ban, which hit the market hard, triggering a 50% correction for BTC and the network’s hashrate.
The institutional element will impact the price action of Bitcoin and alternative digital assets, regardless of the cyclical behavior. This is where Crypto enthusiasts living void of speculation is an enticing idea. This is already unfolding within the realm of WEB3 and its myriad of income opportunities. SoFi participants are not reliant upon volatility and the speculative nature of Crypto.
DeFi & RWA To Become More Prevalent
DeFi has been a relevant and imperative aspect of Crypto since its inception in 2020. However, DeFi protocols existed before 2020, and the term DeFi had yet to be coined. Being involved in DeFi before 2020 revealed how important and powerful it is, especially for the unbanked and those who don’t qualify for certain financial products. DeFi was and is a game-changer.
The tokenization of real-world assets is another sector primed for enormous growth, which ties in with DeFi. DeFi is an integral aspect of WEB3 and tokenization. I have addressed projects like Centrifuge before, which facilitates the collateralization of RWA via DeFi pools and protocols. This is where I envision a lot of activity in the coming years. Tokenized real-world assets will be a leading source of income in the future.
In many instances, a tokenized asset without yield-bearing opportunities is not that beneficial apart from the ease of management and the transference of ownership. Much of Centrifuge’s model is the collateralization of assets. Essentially, Centrifuge is a union between DeFi and RWA. This model will become prevalent by the turn of the decade. Regarding this particular niche’s potential, it’s a great investment opportunity.
DeFi models are likely to become a lot more prevalent, not only in the RWA sector. Matera, for instance, is monetizing social media engagement via DeFi pools and protocols. This is another chapter in SoFi, as it leverages WEB3 via legacy WEB2 platforms like X and Instagram. This project is still in its infancy, so monitoring its progress and efficiency will be good.

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Final Thoughts
Creative models within the DeFI and RWA sectors will revolutionize the Crypto and blockchain space in the coming years. I see this as the next meaningful advancement within the Crypto space. Smart investors position themselves to benefit from the institutional sardine run but then look to where the next meaningful development will be. I envision this particular niche unlocking enormous potential in the years to come. 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.