Although the market cap of DeFi has increased by 2,100% across 2020, critics have been arguing that the industry should evolve to have a better sustainable footing. In the books writing about the history of cryptocurrency, this year,2020 will remain etched forever in that book as the time when decentralized finance was at the peak of its popularity.
The young misunderstood space grew up quickly from the powerful illustration by DeFi Pulse. In the early days of January, the final value that was locked in the protocols of DeFi came to be $675 M. Since then, many records have been broken and during December the figure appeared to be a staggering $15 bn. It is an increase of 2,100% under 12 months. Although there are bad signs of a bubble, many crypto heavyweights like Binance whose CEO is Changpeng Zhao think that the cryptocurrency will continue to dominate the market and it has huge growth potential for surviving in this space.
Nonetheless, many critics think that it should mature and evolve as we go into 2021. The present year was dominated by lots of projects having near-identical and food-related names and endless forks. Sustainability has not been there as traders are flocking from a protocol to the next protocol in expectations of getting the healthiest returns.
Realizing Long-Term Benefits Of DeFi
Many critics have noted enthusiastically how the platform DeFi delivers permissionless, robust, and secure transactions in such a manner that many centralized platforms do not have the capability of matching. However, they argue that in the current form, it is underdeveloped and the infrastructure necessary for delivering true change isn’t yet ready. Critics have drawn parallels with the 1990s and 1980s stock market where the orders were given by telephones and the traders were uncertain about such exact time that it should be executed so that loss doesn’t happen.