According to OKLink data, as of January 14, 2021, the total lock-up volume of DeFi exceeded US$30.5 billion, and the total market value of DeFi exceeded US$30 billion.
Regarding the strong development of DeFi in 2020, some people may question: With such a huge amount of data, is there a bubble in the DeFi market? Bubbles must exist, and bubbles are an inevitable financial link. The current development of DeFi is still in its early stages. It is meaningless to discuss and verify the existence of bubbles in the DeFi market at this stage.
People in the industry believe that the value of DeFi lies in the future, and whether DeFi can become a key layer of the decentralized value Internet in the future.
From this point of view, we can observe and think about future scenarios from the development history and industry map of DeFi in 2020.
From January to April 2020, when the global financial ecology is in a trance, the DeFi industry is sprouting and growing. Curve is released, Aave is launched, Compound is issuing COMP tokens, and top decentralized exchange Uniswap is launching Uniswap v2. In the stage of accumulating power, the most interesting thing is that the 3.12 cryptocurrency market crash caused the failure of Maker’s oracle to feed prices, and the liquidators were unable to liquidate, which caused a great impact on Maker’s stable currency DAI.
From May to September 2020, with the failure of the Bitcoin halving market, the attention of the DeFi field has gradually increased. Especially in mid-June, the lending agreement Compound issued the governance token COMP. When users use Compound to deposit or lend assets, they will also receive COMP token incentives. As a result, the prelude to liquidity mining was unveiled and the DeFi boom began.
The curtain opened and slowly appeared on the stage.
With the help of Uniswap's liquidity, Sushiswap obtained a large amount of capital pledges when it went online. As a derivative of Uniswap, the migration of Uniswap liquidity has been completed. On September 17, Uniswap airdropped 150 million UNI governance tokens to early participants and LP users, and also launched liquidity mining activities to consolidate its top position in decentralized exchanges.
From October to December 2020, the eyes of the entire winter industry are locked on the soaring price of Bitcoin. At the end of November, the price of Bitcoin broke the highest record in 2017, which is even more interesting. And DeFi has also become another channel for the appreciation of encrypted assets. More and more funds are pouring into DeFi. In December 2020, the total locked position of DeFi exceeded 15 billion US dollars.
The following is the development trajectory of the DeFi field in 2020 drawn and organized by Benz Finance:
In the long year of 2020, DeFi has built a relatively complete industry map, and Paobao Finance has compiled the DeFi ecological map from three areas: basic settings, assets and their management, and asset transactions:
From the current industry map, we can see that DeFi is a financial application ecosystem built by a decentralized blockchain protocol. Traditional finance, including savings, asset lending, asset trading, funds, derivatives, and insurance, are all included in the circle, making traditional Finance follows smart contract rules and execution operations, and enables participation and use without access conditions. This is a very remarkable thing. Global finance will use DeFi as a public infrastructure, and assets will freely enter and exit various financial instruments. This will be a financial A miracle in history.
Brian Brooks, acting director of the U.S. Office of the Comptroller of the Currency (OCC), pointed out: DeFi subverts all of this, using blockchain technology to provide services without the need for human intermediaries. These "self-driving banks" are new, but are likely to become mainstream. In terms of opportunity, DeFi could stop savers from hunting around for the best rates, end discrimination against certain borrowers by letting software make credit decisions, and even eliminate the risk of fraud or corruption.
Recently, Kerman Kohli, the founder of DeFi Weekly, released a review of the DeFi field in 2020 and a forecast for 2021: The design space for new DeFi applications is still completely open, but more creativity is needed because the basic tools of DeFi have been basically completed up.
In 2021, we will see more innovative financial instruments in DeFi.
