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DeFi and smart contract platforms outperform the market

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As of January 21, 2021 using IntoTheBlock’s DeFi Insights

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VC investors concerned about censorship

The risk positioning of the market can be seen in the high return yields of liquid assets such as cryptocurrency trading. The positioning is linked to the upcoming US$1.9 trillion stimulus plan in the United States, which has increased forecasts for economic growth in the largest economy.

Because of this, the Federal Reserve's plan to keep interest rates at zero for the foreseeable future, stocks with high growth potential and risky assets such as space exploration (Virgin Galactic), electric vehicles (Tesla), next-generation financials have all rallied. (DeFi) and decentralized infrastructure.

Decentralization has also gained momentum amid unprecedented censorship. After former U.S. President Donald Trump's incitement to violence, Twitter announced the permanent ban on Trump's account, and Amazon Web Service stopped providing web hosting services to social network Parler. With this move, Google search results for "censorship" reached their highest level in five years.

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via twitter

Overall, cryptocurrency holders have largely profited from their holdings so far in 2021. The recent surge in prices has been driven by factors such as increased speculators in cryptocurrencies and risk positioning and decentralization claims.

Smart contract platforms and decentralized finance protocols fit into the two categories above. Encrypted protocols will be key to the next generation of censorship-resistant applications in the coming years, not just a risky bet.

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