Can DeFi Continue Its Rise in 2022?
2021 was the year of many trends in the crypto market, and decentralized finance (DeFi) was definitely one of them. According to data from DeFi Pulse, the total volume of assets locked in DeFi protocols surged throughout the year, rising from a little over $25 billion to a peak of $111 billion in November 2021.
DeFi might not have captured the hearts of investors and market participants like NFTs did in 2021, but there is no doubt that it performed incredibly well. Many expected DeFi to grow, and it did.
So, that begs the question — what is in store for 2022?
No industry grows without witnessing its fair share of challenges. For DeFi, this is true as well. There are several issues that need to be worked out if the industry is to grow, and the ability to get these issues out of the way will go a long way in ensuring long-term viability.
The first problem is that of fraud. While 2021 was a good year for DeFi, fraudulent, scam platforms still roamed the market. We saw the Iron Finance fiasco play out before our eyes, and there were many more just like that. Investors — as well as market participants — will need to find a better way of ensuring that these scams don’t prevail.
Then, there are security threats themselves. Like the broader crypto market, DeFi protocols are still vulnerable to security issues. Hacks and other security breaches could easily affect the stability of DeFi protocols, and investors won’t trust DeFi until the industry can achieve without being interrupted by security breaches.
Then, there is the user experience problem. For all the benefits they offer, a lot of DeFi protocols are still challenging to use. In a world where users are more focused on getting convenience, it just doesn’t make sense for a protocol to be so challenging to use. There is a need for investments in better user experience, improved product design, and better overall operations.
Issues like these are just the little challenges that DeFi needs to break in order to become more mainstream.
There is also a need for more regulatory clarity on DeFi this year. One of the biggest challenges facing the traditional crypto space is a lack of regulatory clarity in most developed parts of the world. Now, it seems that DeFi has inherited that problem as well.
If financial regulators don’t offer clarity on DeFi protocols, a lot of investors still won’t trust the space. And why would they? Why should these people put their money in a protocol that could just as well be banned tomorrow?
Like crypto, DeFi will benefit immensely from an improved regulatory standing. It is hoped that this problem will get a solution — or, at least, something close to it — in 2022.
While the DeFi space is dealing with its own issues, there are always opportunities for people to invest. As always, there are several new DeFi coins in the market right now that is gaining some traction.
One such coin is $SCC — the native token for ScaryChain Capital. A Finance-as-a-Service protocol, ScaryChain Capital helps investors to optimize their yields and returns by investing across multiple blockchains. ScaryChain Capital is revolutionizing how people handle money and invest.
With the crypto market growing significantly, ScaryChain Capital is taking this industry by storm. It is set for an explosion of growth this year, and you could get in on that with the $SCC asset. Available on different exchanges, $SCC is primed for significant upsides.
Now is a great time to get in!
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Audited and Kyc’d by Assure Defi