2021 — An Ox-picious Year for DeFi 2021年-DeFi吉祥的一年
Over the past few decades , we’ve seen poor decision making by centralised financial institutions and governance brought the world’s economy to its knees in the most major financial crisis. DeFi is the world’s answer to the financial crisis.
The concept of DeFi based on blockchain technology was designed to ensure financial transactions would be transparent and controlled by participants within the network and not by a selective group of individuals.
The macroeconomic trends of low and even negative interest rates globally will mean that DeFi will be increasingly relevant to people. While DeFi is still in its nascent phase, certain growing signs are indicating that it’s beginning to enter a phase of maturation.
DeFi has a lot of potential to make common financial processes like lending, borrowing, and earning interest more accessible to emerging markets. Most transaction volume and product development in 2021 will likely continue being centered around DeFi.
However, not many retail investors or users are comfortable with DeFi due to platform accessibility and barrier to entry for blockchain infrastructures.
If DeFi can build a comprehensive ecosystem and stake its claim in the realm of traditional finance or even coexist with traditional banking institutions for a more integrated and open financial ecosystem, this will further cement its essential role in the finance industry.
Bitcoin was created to form a decentralized and purely digital alternative to traditional money. Money, however, is only the simplest instrument within the modern financial armamentarium.
Crypto has had futures and options for some time, but only recently has it started developing its own versions of some of the more sophisticated structures in the traditional financial ecosystem. The DeFi sector has seen astounding growth recently. In early 2019, there was only $275 million of crypto collateral locked in the DeFi economy. By February 2020, it was $1 billion, and it eventually hit $4 billion by late July before reaching $41 billion in early 2021.
The majority of DeFi dApps (Decentralised Application) currently run on the Ethereum blockchain with Binance Smart Chain keeping up; this has greatly negatively impacted the cost and speed of Ethereum transactions, but these problems have, in turn, stimulated a flurry of creative development regarding layer 2 efficiency-oriented tools running on top of Ethereum, as well as alternative faster, cheaper, more scalable blockchains.
Projects such as Plutus Capital are building own proprietary blockchain that will be more scalable and sustainable as compared to Ethereum blockchain.
The ethos of the crypto and DeFi world has also recently leaked into the conventional finance arena, with the saga involving the traditional market drama; GameStop and WallStreetBets.
By this point, the question isn’t whether DeFi will become a major factor in the global economy, but rather how creatively it will be developed and to what extent it will emerge as a force for broad benefit.
One of the keys to guiding DeFi in a beneficial direction will be integrating advanced decentralized Artificial Intelligence (AI). So far, few DeFi projects have leveraged AI, but we may well see AI woven into the next burst of DeFi activity in 2021 — and maybe even in a way that enables DeFi to push startup decentralized tech projects forward much faster.
2020 also saw the emergence of “Meme DeFi” in the form of food-themed projects like SushiSwap, PancakeSwap, BurgerSwap, BakerySwap, YAM and more. Of course, traditional finance has also seen its share of dubious schemes, though generally with less creative names.
One of the revolutionary aspects behind the scenes of modern DeFi is its “noncustodial” nature. Noncustodial smart contracts eliminate the intermediary from complex multiparty transactions, using code that temporarily locks certain tokens until certain conditions are met — without the tokens needing to move from their owner’s crypto wallet to somebody else’s. These contracts frequently rely on decentralized, noncustodial crypto exchanges like UniSwap, which are relatively new but steadily grabbing market share from centralized exchanges such as Binance, OkEx, Bittrex and so forth.
The fully automated nature of DeFi protocols enables financial instruments not seen in the traditional, centralized financial sector. One such example is ‘flash loans,’ a unique form of loan that must be taken out and paid back within a single transaction. These loans allow a user to borrow funds, convert or trade them across different platforms using algorithms of their choice, and then pay back the amount borrowed, all in moments.
DeFi’s noncustodial aspect provides partial insulation from traditional financial regulations. But the European Commission plans to launch a comprehensive DeFi regulation scheme in 2022, which may provide some valuable legitimation to the sector while reducing the prevalence of pyramid schemes and such.
What, though, is the real importance of all this DeFi activity? Is it just about technical cool value, new toys for speculators to play with, and the provision of more sophisticated financial tools for those who prefer to keep their wealth outside the control of centralized authorities?
We at Plutus team believe that DeFi has the potential to be much more than this, but the key for it to achieve truly profound influence will be the extension of DeFi beyond Bitcoin and Ethereum to the broader scope of altcoins.
A significant percentage of the altcoins currently traded on crypto exchanges are utility tokens serving functions within innovative blockchain technology projects, across the gamut of vertical application domains. The market for altcoins has risen and fallen a few times, but generally, it lacks the liquidity and volume as compared to major cryptocurrencies such as Bitcoin and Ethereum.
DeFi on lower-liquidity altcoins could provide the altcoin market with massively greater liquidity, decreasing the volatility and increasing the financing options for the associated technology projects. A healthier altcoin ecosystem would make the decentralized sphere far more attractive to early stage tech entrepreneurs, potentially shifting the global tech world away from centralized control and toward participatory democratic public-blockchain-based dynamics.
But lending, trading, prediction and market-making on lower liquidity altcoins is harder than doing these things for BTC and ETH, which is where AI must come to the rescue.
Complementarily, many other projects are using DeFi mechanisms to democratize market-making across the altcoin spectrum by allowing token-based projects to offer token rewards to market makers who provide liquidity for their tokens. The core mechanism behind PlutusSwap and many other current DeFi projects is “yield farming” — incentivizing token-holders for staking their Liquidity Provider (LP) tokens in a way that allows tokens to be lent out via rewarding them with a special yield token.
With just a little luck, 2021 may be the year DeFi begins shifting from food memecoins to AI-fueled systems designed to radically empower decentralized tech startups and those who hold their tokens.
Our team has been working on updates and development based on the latest market trends and we will announce on our socials as soon as development is completed. Stay tuned!
Governed by yPLT token holders, PlutusSwap is built by the Plutus Capital dev community. Other than earning rewards on PlutusSwap, yPLT token holders have the right to vote on proposals and decide on future development within our ecosystem. PlutusSwap believes that the key to unlocking economic equality, prosperity and financial freedom lies in developing strong Fintech use-cases on cutting-edge DLT. Most importantly, PlutusSwap is neither a chef nor food. PlutusSwap aspires to bank the unbanked, bringing fundamental financial rights to billions of individuals across the globe. We want to unbank the banked, stripping away the financial prison that many in the first world are enslaved to.
We, are the followers of the great god of wealth, Plutus.
About Plutus Capital
Plutus Capital is backed by a FinTech system built on a public blockchain, where an individual can enforce greater control of his own funds. The Plutus blockchain and token rely on the tamper-proof nature of ledger as well as smart contract and validation to ensure all processes are safe and secure.
目前，大多数DeFi dApp（去中心化应用程序）都在以太坊区块链上运行，并且Binance Smart Chain保持同步。这极大地影响了以太坊交易的成本和速度，但这些问题反过来刺激了人们对以太坊之上运行的第2层以效率为导向的工具以及更快，更便宜，可扩展性更高的替代品的大量创意开发。
2020年还出现了以食品为主题的项目“ Meme DeFi”，例如SushiSwap，PancakeSwap，BurgerSwap，BakerySwap，YAM等。当然，传统金融在可疑计划中也占有一席之地，尽管通常名称较少。