Decentralized finance (DeFi) has become a new breakthrough in the development of blockchain and cryptocurrency industries. Since the beginning of this year, the number and scale of DeFi projects have shown rapid growth. However, will DeFi be short-lived again like ICO after hype and mass media exposure? Or is DeFi the future financial trend?
Is Automated Finance the future of finance?
Pomp, the founder of Morgan Money, a cryptocurrency fund, said:
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“The future of automation finance will be bigger and more important than decentralized finance. In the future, every financial service will be automated, but not all decentralized.”
This year, the DeFi industry has been booming, especially as the Ethereine platform of the largest DeFi infrastructure network, seems to find another shining point after ICO. According to statistics, since the beginning of March this year, the number of DeFi-related projects has increased by more than 100%.
However, Pomp believes that the number of projects that try to do something is a measure of success, which is like giving each participant a participation award. He also said that the most successful financial-related blockchain project so far is not on the Ethereum platform, which is true.
Many people believe that the rapid development of decentralized finance (DeFi) will gradually eliminate centralized finance, including automation finance. They believe that automation finance already exists, but it is controlled by banks. Bitcoin is a decentralized currency. Ethereum is a decentralized currency and finance. The future is bankless.
Pomp has objections to this. Bitcoin has won the competition for value storage, and Ethereum is a competitive currency index. They are not money, they are not banks, and they may never be. The government will one day issue central currency, which will be the world currency, but bitcoin will still be digital gold.
Some people think that it is too early to say that decentralized finance and automation finance will be even bigger. Future finance will be Decent Financial (DeFi) + Automated Finance.
DeFi is still in its early stages and needs to avoid excessive investment
Although DeFi has grown substantially this year, it is still in its early stages, and it is far from the traditional financial market in terms of scale. According to DAppTotal.com DeFi special page data, as of now, the 31 large DeFi projects that have been counted have a total lock-in capital of only 1.19 billion US dollars.
At the Ethereal Summit in Tel Aviv, as the largest DeFi base platform, Ethereine founder Vitalik Buterin talked about the DeFi agreement, saying that he was very excited about the DeFi agreement. In his view, anyone in the world can use a system to pay for each other, and basically let people choose their own financial risk exposure. This idea is very powerful, something that many people can't reach. . However, V God also warned that people should not be strongly encouraged to put money into the DeFi agreement, mainly because these agreements have not been tested and may fail.