Ethereum development offices in Berlin, Germany. Ethereum is an open source blockchain that has … [+]
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Every day I receive Telegrams and emails about DeFi, which I kept up with General Diane Feinstein a year ago. Then this year I bought the Stellar Lumens token after reading day after day about decentralized finance as the only thing you can do with cryptocurrencies. Only to find that it is not a decentralized finance company, as the coins should be managed by one organization.
Here I was thinking I hop on the DeFi bandwagon on the cheap, and come out to find out I don’t.
If you hear about DeFi on YouTube ads with former school investors talking about turmoil, and hot selling traders talking about their 3,000% buffs, the basic truth is if you want DeFi, and believing in DeFi, you need cryptocurrency. account.
Until four weeks ago, at least. The other option for those wanting to get into the DeFi theme is the new Bitwise Asset Management (BITW) Crypto DeFi Index (BITW) fund that I hadn’t heard of this fund until this week.
Matt Hougan, CIO for Bitwise Asset Management told ETF Trends “The growth and activity in the … [+]
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“DeFi is the story of 2021,” Matt Hougan, Chief Investment Officer for Bitwise Asset Management, told ETF Trends on February 17th.
Decentralized finance (aka DeFi) refers to the technologies of digital, peer-to-peer financial services that allow crypto trading, loans, interest accounts, and other services. It relies on public blockchain such as Ethereum and cryptocurrencies.
In the sci-fi world of digital money, the creators of DeFi want to cut out traditional banks and brokers, allowing for faster, cheaper, enabling financial transactions, all day long every day , no minimum trade volumes, no paperwork, full transparency. , and analytical ability.
DeFi’s business growth accelerated in 2020, growing from $ 700 million by December 2019 to $ 13billion on December 31, 2020. It reportedly hit $ 40 billion this year, based on industry data across several cryptocurrency stores and exchanges.
“We can say that DeFi started around 2013, with the first original Coin Offer, called Mastercoin (now Omni),” said Nikita Soshnikov, director of Alphacash Store, a 9-year Estonian-based cryptocurrency exchange . “They used a new approach to fundraising, very similar to the IPOs. Then a year later, the first stable was created by BitShares (up 400% from December 20). ICOs and stables would ultimately play a key role in the growth of decentralized finance, ”he says.
I would like this blog post with them: how no to make thousands of dollars with DeFi.
Several cryptocurrencies were issued by DeFi companies.
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DeFi names for experience
In 2020, an explosion of centralized and decentralized financial protocols was created on Ethereum. That’s why my inbox is so full.
Some of the most talked about names are those involved in decentralized exchanges (Uniswap, Ox); flat rate protocols (Aave); lending protocols (MakerDAO); creating synthetic assets such as Tesla tokenized shares (Synthetix, UMA); automated investment (Yearn Finance), and several decentralized investment autonomous organizations (which is what DAO stands for), just to name a few.
Right now, I don’t know what most of this means. But as a retail investor, I am on board with thousands of others who are all day-to-day learners and who invest in these companies and protocols alongside our traditional E-Commerce accounts .
The AAVE dog coin was at $ 85 on Dec. 20. As of March 20, it is $ 380.61.
Synthetix (SNX) had $ 6.11. It is now $ 20.41.
Yearn Finance (YFI) was $ 26,571 on Dec. 20. It is now $ 35,845 and hit a full-time high of $ 49,328, on Feb. 12.
According to DeFi Pulse, the current market leader for Danish locked-in investment funds is MakerDAO (developers of the stable DAI) with more than $ 6 billion invested.
In decentralized exchanges (known as DEXes), Swiss-based and Russian-based Curve Finance has locked in $ 4 billion. Australian-based Synthethix manages DeFi derivatives with around $ 2.4 billion invested. Badger DAO of Canada has $ 1.36 billion. Here in the US, the DeFi Flexa payment platform is about $ 424 million.
“There are many opportunities for retail investors in DeFi’s place, especially to generate passive income,” said Audrey Nesbitt, Metaverse’s Head of Global Marketing. “Token holders can invest their money in a liquidity pool to earn passive income. Some DeFi lending and lending protocols are based as Aave. Aoken custodians receive lower fees, better loan-to-value ratios, and staking rewards. The more resources there are, the more the mark is worth in my opinion, ”she says.
Massachusetts-based cohasset Sarson Funds, a blockchain-related investment specialist, said they expect DeFi to continue the “meteoric growth,” CIO Daniyal Inamullah wrote in a 19-page report that was published last month.
“Protocols continue to show high demand and a product market that is conducive to DeFi,” Inamullah wrote, noting that they see traditional financial analysis being applied to crypto protocols. today. Analysts are beginning to apply methods such as traditional discount cash flow valuations or multiple-based analyzes of crypto assets, taking an old Wall Street look to this secure (and often future) secure trade. upset).
Sarson Funds believes that many crypto protocols are “highly valued” based on the analysis they read in the market.
“We’re at an early stage, with a lot of hype and bubbles around, just like the internet in the 90s,” said Adrian Peng, CEO of Cook Finance, a proven asset management platform. Peng was an early investor in Ethereum, Polkadot, and Filecoin. “DeFi has the potential to reshape our current financial industry,” he says.
The Dream Dream Fund, the investment subsidiary of the cryptocurrency exchange OKEx, invested in Cook Protocol last week.
The market potential of financial companies is largely decentralized compared to many more in the world … [+]
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Size Matters
The total market capitalization of world stock markets is around $ 90 trillion. Total market capitalization for cryptocurrencies, of which Bitcoin and Ethereum are almost entirely derived, sits at more than $ 1.4 trillion. DeFi’s market capitalization is around $ 74.8 billion.
“That doesn’t look good, but Bitcoin wasn’t as impressive either in 2009. Not even in 2013,” Soshnikov said. “But it is a market to create a multi-billion dollar market. Even more thinking that the stock market has existed since the 17th century. ”
The opportunities that have arisen with DeFi – related medals over the past 6-12 months have been enormous. Coinbase
In early February, Mark Cuban was asked on Reddit Ask me anything with the r / wallstreetbets crowd, “What is the relatively small business now that is capable of exploding in the next 10 years? ahead? ”
“DeFi,” Cuban said.
Cuban talks DeFi (albeit in a hyper-niche forum) something like Jim Cramer tells investors on his show Mad Money and readers of The Street bought Bitcoin.
“As soon as it becomes mainstream, and different aspects of DeFi go into everyday life and daily finances, it will affect everyone – from tech tech to the likes of a grandmother who does not understand otherwise what goes on behind closed doors, ”said Alex Alexandrov, founder of Velas and Coinpayments.net.
“The layers of DeFi will deepen – especially with the implementation of Layer-2 or gas development features on Ethereum – and then innovations will move at speed,” Alexandrov believes. “That’s where the real investment opportunities come from.”