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2021's crypto explosive power: DEX, Bitcoin, Ethereum, algorithmic stablecoin...

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Two-wheeled vehicles in 2021, a hundred flowers are blooming. One spin is Bitcoin, one round is Ethereum, and Baihua is DeFi.

The Bitcoin halving will begin to emerge at the end of 2020. As legal currency issuance continues, the Bitcoin halving will accelerate, even faster than the 2017 pace. Ethereum's driving force lies in the deep promise of ETH2.0, the implementation of a fee capture mechanism, and continuous DeFi development. 2020 is undoubtedly the year of DeFi. DeFi has found a way to break through through liquidity mining and governance.

2020 is the year for institutions to enter BTC substantially, and institutions will enter ETH in 2021.

The DeFi ecosystem is about to enter a state of enchantment. Trading and borrowing will still be the most important routes, but the derivative fields will be getting faster.

(Total annual DEX transaction volume is more than 116 billion US dollars, source: DuneAnalytics)

(The total number of DeFi users is approaching 1.2 million, source: DuneAnalytics)

The total amount of locked assets DeFi can exceed 150 billion US dollars, and the proportion of DeFi projects in the top 50 projects in market value can exceed 30%.

(Currently, the total amount of locked DeFi assets exceeds US $ 14 billion, source: DuneAnalytics)

Uniswap, Sushiswap, and Curve are already the largest encrypted DEXs, and the AMM model will lead to DEX concentration, which will make Uniswap, Sushiswap, and Curve stronger. Unless there's a annoying new model.

(DEX transaction volume in the last seven days: Uni and Sushi exceeds $ 1 billion, source: DuneAnalytics)

With the development of Ethereum Layer 2 and the advancement of cross-chain DeFi such as Polkadot, the potential for DeFi will be further released and the scale will increase. " 

Only original encrypted DeFi can win the future. Just copying the traditional financial model may not work in the area of ​​encryption. There needs to be a thinking model based on the original blockchain, not an Internet financial model.

Decentralized stablecoins are the true holy grail of the crypto space

The most imaginative path in crypto in 2021: algorithmically stable currency. Currently, only algorithmic stablecoins stand a chance of realizing Satoshi Nakamoto's true dreams. By 2021, the overall market value of algorithmic stablecoins could exceed $ 10 billion. Blue Fox Notes has been focused on algorithmic stablecoins since early 2018, and now the base has found a way to implement it under DeFi's liquidity mining model. 

Algorithmic stablecoins will be a pathway that can keep up with Bitcoin and Ethereum in the future. Comparing the three, from a maturity perspective, btc> eth> algorithmic stablecoin, and from a potential perspective, algorithmic stablecoin> eth> btc.

However, it should be noted that although this track may have a large profit opportunity at an early stage, the risks are also very large, and will not work at once, and will have many ups and downs. In the beginning, there is basically no basis, no guarantees, no underlying value support, no protocol integration, and no practical application scenarios. It basically depends on people's play. The game itself is dominated by speculation, which leads to a large part. In the end, all algorithmic stablecoins are quill, and the risk of early participation is very high. Unless you have an adequate risk tolerance and a deep understanding of the mechanics of play and human nature, it's best not to touch it.

Blockchain infrastructure

One of the biggest breakthroughs in encryption in 2021: substantial landings of Ethereum layer2, although the time may be longer. Among them, ZK-Rollups is one of the most important layer2 technologies. A Layer 2 breakthrough will have an important impact on DeFi in the second half of 2021 and further unleash the potential of DeFi. However, Layer 2 also has interoperability issues, true Layer 2 Interoperability will take some time and is expected to be completed after 2022. Once interoperability is achieved, DeFi will truly flourish. 

There will be more projects to explore on the trusted computing network, which will connect the real world and the blockchain world, thus opening up more DeFi application scenarios.

As the scale of transactions increased, oracle on-chain gradually became one of the most important sources of price feeds. Pure price feed oracle room will be squeezed.

* Under strong demand for cross-chain DeFi, public chains such as Polkadot have ushered in development opportunities. Because Ethereum's scalability barriers weren't easy to solve in a long time, and Layer 2 also has non-interoperability issues. For DeFi to grow into a larger field and to bring about a larger scale of transactions, DeFi needs to make full use of cross-chain facilities. If public chains like Polkadot can take advantage of these opportunities, they have the opportunity to promote DeFi development by 2021, thus building an encryption ecosystem second only to Ethereum.