DeFi, what is it, and how did we get here?
Really, how did we get here?
Bitcoin was designed with a mission to reshape the financial sector and detach the state from monetary policy. Bitcoin was designed as a protocol, but it became a movement.
During nearly ten years of development, the financial innovations driven by Bitcoin and the cryptocurrency movement as a whole have been increasingly affecting how global society is working. It is recognized that the distributed ledger technology brought on by Bitcoin is set to transform the global financial system.
DeFi originates in Bitshares-based stablecoins which were the first iteration of blockchain-based synthetic assets (stable coins). Later on, with the advent of Ethereum as the first mainstream smart contract platform — stablecoins become smarter and robust. We can say that MakerDAO, and it’s DAI stablecoin are the first modern DeFi products. Fast-forward to 2020, the Ethereum-hosted DeFi scene exploded. AMM contracts like Uniswap have eclipsed the likes of Coinbase in daily volume and new DeFi products have started popping up on a practically daily basis. Modern DeFi evolved much further than algorithmic peg stablecoins, today we have lending markets, liquidity pools and many more marvels of fintech ingenuity.
