Top 10 DeFi Trends

March 22, 2023

Predictions for the Future of DeFi

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Inspired by @MessariCrypto report,we make analysis easy with visuals and examples.

10 Trends for you to Catch Up

1. dApps are shifting off @ethereum

The DeFi market cap relative to Ethereum is close 
to its all-time lows.

To have lower fees, dApps are moving to its scaling solutions (@0xPolygon and optimistic rollups)or new appchains (@dYdX on @cosmos).

2. @Uniswap will remain the top DEX

@Uniswap v3 creates incremental value for its users.

Other AMMs (Automated Market Makers) are struggling: @ProjectSerum was killed by @FTX_Official 
or got hit hard by @terra_money.

3. DeFi Collateralized More 
with Real-world Assets (RWA)

RWA in DeFi could improve liquidity and risk profiles.

RWA accounts for a 12% of @MakerDAO’s balance sheet, and generates 60% of its annual revenue.More on this, here.

4. Undercollateralized DeFi Lending will Risk more to Earn

DeFi lenders generate yield from margin traders, 
which has decreased.

Under collateralized lenders offer yield on riskier lending, leading to big losses (eg. Maple Finance's liquidation of loans worth $37 million and of that $10 million is now distressed.)

5. Liquid Staking Encourages ETH Staking

Projects like @LidoFinance and @Rocket_Pool are good places to stake ETH

Not only will this put the digital asset to work, but it will attract participation from more centralized players.

6. @dYdX is the diamond in the rough.

For a whole year, dYdX paid more than it received. But they are actively innovating: dYdX V4 on Cosmos.

Also, the community voted to change token incentive programs to reduce token inflation.

7. A Gloomy time for On-Chain Asset Managers.

Asset managers on the blockchain were hyped in 2021, but invisible in 2022.

Because DeFi yields are plummeting and investors are focusing on capital preservation. Not much room for them to optimize yields and minimize risks.

8. Regenerative Finance will Thrive

Products are trying to fix the broken carbon trading markets.

@NoriProtocol, @FlowProtocol, @KlimaDAO, @ToucanProtocol,  and @MentholProtocol reduce carbon footprints.

9. Crypto Innovates in Real Estate.

Real estate finance is one of the largest markets in the world.

Right now, the players are in a very early stage: @PropyInc and @HomebaseDAO (tokenized real estate)Milo Credit (collateralized mortgage lending)@vestaequity (fractionalized ownership).

10. Demand for Security and Sustainable Token Design is Rising

$3B+ was lost in on-chain hacks last year.Demand for security auditors, economic security modelers, and network monitors continues.

Mango, Poly Network, Nomad, Wormhole, Badger, and Harmony Horizon were among the nine-figure hacks.


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