Cryptocurrencies had a great year in 2021. In this period, we have seen the market go from being classified as a billion-dollar economy into a trillion-dollar economy. Aside from that, cryptocurrencies are gaining visibility in the mainstream world with, for example, El Salvador's adoption of Bitcoin as the official digital currency. As a result, investors are looking for the "new Bitcoin" on the market, hoping to find a great alternative in so-called altcoins. Unfortunately, many traders value an altcoin exclusively…
The Covid 19 pandemic has exposed the world’s financial system to tremendous challenges. The United States government proposed a jaw-dropping $2.2 trillion bailout for the stock market. All this was to act as a relief measure to the current crisis within the traditional markets. Such interventions point to centralization being a powerful and indispensable feature in the traditional financial system.
Equitable and Faster Wealth Distribution
But reports point to the existence of a huge challenge regarding wealth distribution of this wealth. Lou Kerner of CryptoOracle talked about this issue during a BlockTV interview. While he saw no fault in the planned $1200 distribution to each citizen, a further re-evaluation of the handouts to rich corporations makes it not good enough.
Kerner believes DeFi may just turn out to be quite critical regarding the current volatility-influenced markets. The rise of DeFi could give some of its domain’s apps a shot at achieving mass adoption, he noted.
Evasion of governments’ bans or restrictions may become possible, with clearer transparency expected thanks to DeFi’s growth. Had there been a more robust Blockchain technology integration the distribution of the current stimulus package would have been quicker. DeFi may seize this opportunity to infiltrate the markets once the pandemic is over.
Even though DeFi offers a host of benefits not all see a clear-cut path. Ren Project’s CTO, Loong Wnag believes DeFi has a long road ahead before it takes over the traditional markets. The first step involves finding a concrete solution to the issue of interoperability. Not only does such a solution permit the growth of the DeFi space, but it also enables users to acquire their desired digital assets.
According to Loong, more liquidity and improved interaction between different blockchain networks are required by DeFi. Its ability to access different types of collateral is also a key limitation, that being only Ethereum based ones. Solving interoperability is a promising path to greatness for the DeFi space.