Entrepreneurs

Mark Cuban Says Explosive Growth in DeFi Is ‘Like the Early Days of the Internet’

Traditional finance walked so that decentralized finance could run.

Free Book Preview
Money-Smart Solopreneur

This book gives you the essential guide for easy-to-follow tips and strategies to create more financial success.


4 min read

Opinions expressed by Entrepreneur contributors are their own.


Decentralized (DeFi) has experienced an unreal uptick unlike amid the chaos of 2020s crumbling global economies.

Last year’s warmer months are now known as the “DeFi Summer” because the total value locked into their smart contracts rapidly grew, from a few hundred million to more than $20 billion in a matter of months. 

Decentralized Finance, as the name implies, operates independently while not relying on traditional intermediaries such as banks and insurance funds. The need for these intermediaries becomes eliminated, thanks to the user’s ability to invest, trade, transfer and conduct peer-to-peer transactions using cryptocurrencies along with digital assets. 
 

Related: This Is Why Bitcoin Will Hit $59,000 In 2021

The growth of DeFi

The first important event that helped make decentralized finance possible was the creation of Bitcoin in 2009 which enabled a default for all the top DeFi protocols that was .

Ethereum launched in 2015 and quickly started attracting developers who wanted to build all kinds of decentralized applications, from financial applications to games (such as the viral CryptoKitties). 

Fast forward to 2017, when ICOs on Ethereum became prevalent. This domicile to digital , global payments and applications have led to some of the most notable DeFi projects of the ICO era. It was from this point forward that it became clear that the public was warming up to DeFi. Billionaire entrepreneur Mark Cuban compared the growth of DeFi to the early days of the :

“You’re starting to see NFT (non-fungible tokens), and it’s not so much about just about how much is sold, market value, but more just that people are becoming more comfortable with it and so we’re starting to see these applications that are just popping up left and right. It reminded me so much of the early days of the internet where, in the mid-90s, people started talking about internet applications but the internet had been around for ten years.”

Cuban is a believer in DeFi’s power and potential, especially considering the new all-time highs of token prices being reached by Ethereum, and so-called “Ethereum killer” protocols such as Polkadot and Solana.

Of course, DeFi isn’t only about the prices of platforms’ native cryptocurrencies. TrustToken, for example, also recently launched its TrueFi protocol for uncollateralized on-chain lending on Binance. The protocol essentially lets people borrow money without locking up their crypto as collateral, which Ethereum requires. TrueFi takes the idea of uncollateralized lending, which exists off the blockchain in the form of high-interest, short-term “text loans,” and improves it through DeFi mechanisms, with transparency as a key component of its offering. 

Borrowing and lending are just one of the many capabilities being transformed by DeFi. The growth of non-fungible tokens (NFTs), which open the door for people to invest in traditionally non-fungible assets like real estate and art, also represents a promising development in the space and are growing in popularity. Cuban is a huge fan of this particular DeFi segment.
 

Related: How 2020 Became the Year of DeFi and What’s to Come in 2021

There is more in store

There are a few reasons behind the DeFi craze, aside from the elimination of regulators. Another reason is that major asset management funds and high-street financial institutions are getting involved, as they are beginning to accept DeFi and looking for ways to participate. Then there is also the classic case of FOMO—people don’t want to be left out of this explosive growth, especially considering all that the future may have in store for it.

DeFi developers are consistently building new innovative projects, and exploring ways to bring in new users to start participating. Developers are also discovering new use cases that were previously difficult to touch on, due to high network fees. The tokenization of new, more traditional assets will also create new and exciting opportunities.

Its recent boom only paved the way for greater potential, which has yet to be tapped into.
 

Related: Here’s How Decentralized Finance Is Being Redefined

Most Related Links :
verity news now Governmental News Finance News

Source link

Back to top button