DeFi on the cusp of mass adoption

Decentralized finance has long since left its mark on the crypto market. A year ago, the assets managed by DeFi protocols were around one billion US dollars, but the total value locked has now increased to 60 times. Despite some troubles, the young market has quickly become an important part of the crypto space thanks to innovative financial products and passive sources of income and is only just beginning to show its potential.The success story of DeFi protocols can therefore be explained by the comparatively high potential for returns. According to the report, decentralized exchanges achieve an average of 46 times the return, while liquidity aggregators deliver 22 times the increase in capital employed. The liquidity on the market is also high thanks to staking offers. The automation of financial products through smart contracts also increases capital efficiency. Since no middlemen are involved, not only are fees and, ultimately, personnel costs unnecessary.The report predicts a prosperous future for the DeFi market. It is not just the “hunt for returns” on the crypto market that will further increase the demand for DeFi offers. Interest is also growing in the traditional financial sector. This overlap will be reflected in “code-controlled, democratized asset management solutions that run on decentralized systems”. In particular, the integration of stable coins will be of great importance in the future.Making sure users are really involved in the project and transform into a real community is key. Solid tokens, economic models, but also the issuance of incentives will be important to ensure that users care and stay true to the cause.In this way, DeFi is also becoming more and more attractive for institutional investors who have so far steered a wide arc around the market.There is a limited but growing acceptance of institutional investors in DeFi, but since crypto…