Original source: The Block

Original source: The Block

Original compilation: Nanfeng, Unitimes

There is no doubt that NFT will receive the most attention in the encryption field in 2021.

While some market watchers foresaw a rise in its popularity and usage not so long ago, its rapid adoption among traditional and crypto-native players has taken most of us by surprise.

The hype surrounding punk, ape and rock has even overshadowed the booming DeFi industry.

However, I expect DeFi to come back into the spotlight again in 2022, experiencing a second "DeFi summer" like 2020.

There are two main reasons:

1. Yield opportunities may be more sought after, especially envisioned in sideways or bear markets.

2. And building a canonical version of DeFi, which I call RDeFi.

Attractive Earning Opportunities

Since the "DeFi Summer" of 2020, many new and innovative projects have emerged, while established projects have further developed their products.

One trend that we've seen in 2021, especially in the first half of the year, is different types of revenue generation.

Because DeFi offers very attractive income opportunities, from 3-5% conservative products to 30-40% income opportunities for more aggressive stablecoins, depending on investors' risk appetite.

Many of the crypto newcomers who entered the space during the recent bull run will start exploring DeFi.

For some, this will be the "traditional" path from Bitcoin to Ethereum to DeFi.

For others, it will be NFTs to Ethereum and then DeFi.

No matter how you get into DeFi, the result is the same: the adoption rate of DeFi increases, which may lead to the arrival of DeFi2.0 summer.

Avoid high gas fees

Although the ETH2.0 upgrade is planned for the first half of this year, I believe Ethereum will still be dealing with very high network fees for most of the year.

This won’t stop DeFi adoption, but it will push investors to use more layer 2 scaling solutions.

Such as Arbitrum, Polygon or Optimism, and other smart contract platforms such as Polkadot, Solana, Avalanche or Terra.

I'm really excited about Acala, Polkadot's DeFi platform, which recently became one of the first projects to get a parachain slot on Polkadot.

Also, Solana, which gets a lot of NFT shares from Ethereum due to lower network fees, would be interesting.

Its high TPS and scalability allow for DeFi applications that are not possible with Ethereum.

The emergence of "RDeFi"

I believe that in 2022 we will see the emergence of RDeFi (Regulated DeFi).

This may sound like a contradiction to some, but I think this is the next evolution of DeFi.

I anticipate that, in addition to the DeFi we all know and love, there will be a parallel DeFi space, with a regulated wrapper that meets the requirements of traditional financial regulation.

Such RDeFi can only be accessed through the same “KYC” process used by traditional investment vehicles and must meet the same anti-money laundering standards.

We’ve already seen early examples of RDeFi projects in 2021, with lending protocols Aave and Compound both offering compliant versions of their platforms, AaveArc and Compound Treasury, respectively.

This trend is likely to continue, and I expect other types of DeFi projects, such as DEXs, to also offer regulated versions of the platform, and I wouldn't be surprised to see a UniswapPro version next year.

I would also like to see more projects that are regulatory compliant from the start, such as Swarm Markets, which received regulatory approval from German regulator BaFin earlier this year and operates as the first regulated DEX.

Additionally, I expect large exchanges such as Coinbase or Kraken to provide their investors with access to DeFi applications through regulated gateways.

Since the use of centralized exchanges avoids the burden of self-custody and private key management, they can provide DeFi platforms without the need to download web wallets or directly interact with dApps.

Such products will bring further adoption and liquidity to the space.

While some crypto experts will argue that DeFi applications with KYC requirements go against the spirit of decentralized finance, I prefer to define DeFi as an owner-operator economic model rather than one offered by for-profit entities Serve.

Conditions of access to services do not change the economic model. The products offered by RDefi develop a new customer base for these platforms, with which regulated financial institutions will not be able to interact.

Additionally, regulation can increase customer protection and hold platforms accountable, which may also be preferred by those not bound by regulated services.

I believe this development will help the field mature.write at the end

write at the end

While I expect NFTs to continue to attract interest, especially given their connection to the metaverse and blockchain-based games, I believe the DeFi space will also regain some attention. DeFi has matured over the past year, and while DeFi is still a very innovative field, the field has continued to mature over the past year. High-yield opportunities will continue to attract investors, while RDeFi will take DeFi to another level, increasing adoption and liquidity.