Decentralized finance (DeFi) is continuing to develop and evolve despite the broader crypto market decline. Here are seven trends to look out for going forward.
DeFi was once limited to protocols, such as Maker, which offered basic lending and borrowing. Today, there are hundreds of different platforms, all providing innovative ways to earn yields on digital assets.
Despite a 70% decline in crypto markets, DeFi has continued on this path of evolution. On July 26, DeFi researcher “@DefiIgnas” highlighted seven of the upcoming trends for the sector.
1/ What's next for #DeFi?🤔
I researched roadmaps of 25 major protocols to find out.
A lot is coming up: protocol-owned-stablecoins, new tokenomics, decentralization plans, The End Game for Maker and more.
These are the top 7 trends coming for DeFi 🧵
— Ignas | DeFi Research (@DefiIgnas) July 26, 2022
Researching Roadmaps
The researcher analyzed the roadmaps of the 25 major DeFi protocols to see what’s next in the pipeline.
Growth of protocol-owned-stablecoins
Stablecoins have been recently launched on NEAR, Tron, and Waves. Aave and Curve also have stablecoins planned, and this trend is set to continue.
Increased adoption of veTokenomics
Protocols will be launching vote-escrowed tokenomics (veTokenomics). In this model, tokens must be locked for a specific amount of time that incentivizes long-term participation. Yearn Finance, Synthetix, and PancakeSwap have ve tokens planned.
Focus on progressive decentralization
As projects establish financial sustainability, a community, and regulatory compliance, they will also seek to reduce their centralization. Furthermore, several DeFi projects like dYdX, Ren, The Graph, Lido, and Maker are already working towards this.
Launching new iteration protocols
Many DeFi protocols will completely overhaul how they work in order to keep up with markets and competition. Version 3s and 4s are in the pipeline for Compound, Synthetix, Yearn, and dYdX.
Future is multi-chain
DeFi protocols will need to interact with each other across multiple chains and networks. Compound, SushiSwap, and Ren are working on multi-chain strategies, the researcher noted.
The increasing influence of Uniswap V3
More protocols will integrate with Uniswap’s concentrated liquidity on version 3. For example, Kyber Network launched KyberSwap with similar features and multiple liquidity provider tiers.
Expanding token use cases
DeFi tokens will need to do more than staking, so advanced tokenomics are likely to be introduced. Chainlink, PancakeSwap, and Maker are planning upgrades to their tokens.
Variable DeFi Transparency
The researcher concluded that the transparency in which teams are building is very different. Yearn Finance, Maker, and Synthetix have very clear roadmaps, details on implementation, and great communication. However, Uniswap “is the most closed off,” the researcher said.
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