Is Decentralized Finance (DeFi) Really a Game-Changer
There are two types of people in the world right now: Crypto believers and haters.
On one hand, there are people who think that bitcoin is the only money in existence, DeFi is the only financial solution, and NFTs are the only real proof of ownership, and on the other side, we have people who think all of it is just a big scam.
How can there be so contrasting opinions about the same technology? Time and time again we have seen technology taking over the legacy systems: horses and cars, telephone and internet, etc. Still, with blockchain, we are back in the same game.
I can’t talk about everything blockchain is trying to solve in one post so here I will just look at DeFi and give you my unbiased opinion on it based on facts. If you are new to crypto, and still wondering ‘what the heck is this DeFi?’, here’s a brief introduction-
DeFi stands for Decentralized Finance. It uses decentralized ledger technology such as the blockchain to manage financial data and provide all the financial services for which we currently rely on central authority such as the banks. DeFi gets rid of intermediaries and instead uses smart contracts to automate and safeguard the entire process.
Now let’s look at some facts and get into the meat of this article and find out if DeFi is actually a game-changer.
The Growth of DeFi
Below are some statistics that prove that DeFi is growing at a tremendous rate and providing value to people which is unheard of in the traditional industry.
The most common metric to measure the growth of DeFi is Total Value Locked (TVL) which is the amount of wealth locked into all DeFi protocols. According to DeFi Llama, In March 2020, TVL was around $500M, now it is $114.05B and in May 2021, it peaked at over $153B across all blockchains.