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As DeFi Grows Countless Opportunities to Rise for Cryptocurrency Investors

As DeFi Grows Countless Opportunities to Rise for Cryptocurrency Investors

The year 2020 brought about a lot of changes in the financial sector. Many economies and financial institutions had to introduce stringent monetary policies to bring order and normalcy to the global market.

Due to these monetary policies, investors, institutions, and businesses had to lean towards alternative assets such as cryptocurrencies. That’s the reason behind the boom in some of these assets and the growth of Decentralized Finance.

Bitcoin recorded positive growth in 2020, even though the world’s economy was crashing. It rose in value and hiked in prices for the first time after the 2017 bull run. The cryptocurrency sector became the leading currency once again in market capitalization following the rise in value.

Another financial system that saw great improvements this year is the DeFi sector. DeFi also recorded impressive growth due to the increase in the overall cryptocurrency activities on the Ethereum ecosystem. But there’s ongoing speculation that the rise in DeFi activities may soon lead to massive losses.

Many players in the space invested massively in DeFi projects. Although it seems that many of these protocols are not solid and reliable. The experts believe that such projects may contribute to the downfall of the sector.

What’s on stake for DeFi and cryptocurrency investors?

According to the co-founder and CEO of Orin Protocol, Alexey Koloskov, the future of Decentralized Finance relies on the integration of centralized platforms and exchanges. He believes that even though DeFi projects and Dex provides access to liquidity for traders, the projects don’t usually offer the features, trading pairs, liquidity and user experience that traders need.

Also, another prominent figure also pointed out that DeFi projects need to improve their app UX so that an average user can interact easily with the new non-custodial community protocols.

Another aspect of decentralized finance that needs to be addressed is the yield farming frenzy. The practice started well, and many investors benefited from it. But it seems that more investors are losing their funds due to half-baked projects and scams aimed at defrauding people based on the hype.

Cryptocurrency experts believe that many projects and platforms are not delivering the level of utility as the community thinks. They believe that the hype around DeFi is greater than what is actually happening.

But the good news is that the experts also believe that if industries collaborate more, decentralized finance will be more successful.

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