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Here’s What DeFi Needs To Do To Survive

The DeFi sector has been growing rapidly, and this continues in 2022 as well. Here’s what it needs to do in order to survive.

DeFi value

It’s been just recently revealed that the total value locked in decentralized finance (DeFi) projects is hovering around $62 billion as of mid-August, down from a peak of over $250 billion in December 2021.

Cointelegraph notes the fact that capital is fleeing the crypto space amid war, soaring inflation and whatever other surprises 2022 may still have in store for us.

On the other hand, unlike previous crypto bull runs, it was not just retail interest that drew in this capital in the first place.

Rather, major institutional players, which have recently opened up to crypto, quickly developed an appetite for the yields DeFi is known for.

The online publication that we mentioned above notes the fact that whether you are going after an arbitrage opportunity or staking your loan into another yield protocol, your loan — as opposed to traditional finance lending — creates little in terms of real-world value. They also made sure to note the fact that healthy yields never come out of thin air.

Check out the original article in order to learn more details.

DeFi ecosystem

A popular crypto analyst has recently compared a decentralized crypto exchange (DEX) to traditional finance (TradFi) marketplaces in an effort to calculate its real-world value.

The anonymous host of InvestAnswers said not too long ago that he wants to see how the decentralized finance (DeFi) platform Uniswap (UNI) stacks up against two mainstream stock markets as well as the centralized crypto exchange Coinbase.

“Comparing Uniswap to TradFi exchanges. That’s how I do a lot of my valuations. I say, ‘What would it be worth in the real world?’”

He continued and said this:

“I pulled up New York Stock Exchange [NYSE], Nasdaq, Coinbase and Uniswap. I took their market caps, took their revenue, and divided market cap by revenue and got different ratios.”

Check out more details about the ETH-based DeFi ecosystem in our previous article. 

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