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Why the Growth of DeFi Is Good for Bitcoin

Why the Growth of DeFi Is Good for Bitcoin

DeFi has rapidly turn out to be the brand new buzzword within the crypto area. Yet, not like ICOs or a number of the different unsustainable practices we’ve seen prior to now, DeFi is right here to remain – and it’s gaining momentum quick. As a centralized cryptocurrency spot and derivatives change, folks generally marvel if DeFi is a menace to OKEx or if the rise in DeFi-focused altcoins is a problem for Bitcoin. In precise truth, we consider that the expansion of DeFi can solely be good for the area and all of the gamers in it.

The Burgeoning DeFi Space

Earlier this yr, DeFi handed an vital milestone. The cumulative worth of tokens locked in DeFi functions soared previous $1 billion in Feb 2020. Like each different space, it confronted some headwinds shortly after with the huge market sell-off, but it was fast to get well its worth. By the center of June, that determine had recovered once more. Less than one month later, it had ballooned to achieve greater than $2 billion. Today, there’s greater than $7 billion locked into DeFi protocols.

With this sort of development, DeFi is an space that no cryptocurrency enterprise (or certainly, conventional finance enterprise) can or ought to ignore. It will mark the way in which ahead for the subsequent wave of crypto adoption and supply the business with an vital various to fiat-crypto exchanges to getting extra fiat on-ramps.

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DeFi may also enable the area to lastly, actually service each particular person on the planet with the monetary providers they should lead dignified lives and take part of their native economies. #FinanceAll.

OKEx Supports the Growth of DeFi

We consider that DeFi isn’t going to take away the necessity for centralized exchanges nor will cryptocurrency erase the normal monetary system. All this may co-exist to make the world a greater, fairer place wherein conventional establishments are extra accountable and persons are higher educated about their private wealth – and have extra choices as to how they protect and accumulate it.

We are additionally proud to diversify our enterprise mannequin from our core spot and derivatives change to launching new merchandise to cater to the demand within the DeFi space. To that finish, OKEx has launched a C2C buying and selling characteristic permitting customers to commerce immediately between themselves. We additionally launched OKChain, which is probably the most decentralized public chain out of all of the cryptocurrency exchanges, and we’re proud to be one of many first validators on Ethereum’s Topaz testnet, one of many testnets for ETH 2.0, with OKEx Pool.

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The transfer to ETH 2.Zero will undoubtedly propel DeFi to even larger heights, and the achievements of different protocols resembling Maker DAO, Compound, and Aave, are additionally gaining huge traction, which is why we now have listed their DeFi tokens for buying and selling on our change.

OKEx acknowledges the rise in demand for DeFi tokens and has been fast to help the business and supply our merchants with the chance to put money into high-quality initiatives. So far we now have a complete of 19 DeFi tokens listed, nearly all of them over the previous couple of weeks as increasingly promising initiatives come out at a fast tempo.

DeFi Is Good for Bitcoin

Of course, with a lot expectation (and maybe just a bit an excessive amount of hype) surrounding DeFi proper now, there’s at all times the potential of a worth correction within the close to future. In truth, wanting on the charts, except Aave’s LEND token which is up 45% within the final seven days, most of the main DeFi tokens like LINK are experiencing some pullback, down by 10% this week.

Just just like the ICO mania, DeFi is making a variety of noise and, when that occurs, costs sometimes turn out to be inflated, which might result in a bursting bubble.

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There are nonetheless many obstacles in DeFi’s path together with scalability, regulation, and interoperability (amongst others). The know-how remains to be studying to stroll whereas we’re hellbent on making it run. A bursting bubble or a stumbling block right here and there could also be inevitable within the quick time period, but that received’t hinder the long-term progress of the business. And it might truly be good for Bitcoin.

Since the vast majority of altcoins (together with DeFi tokens) commerce towards ETH or BTC and never the U.S. greenback, when merchants wish to money out, they should purchase one in all these cryptocurrencies first. If DeFi undergoes a pointy correction, that can imply extra liquidity and robust capital inflows for Bitcoin. And if DeFi tokens start to make actual strides once more, its development will nonetheless be good for BTC… constructing out all the crypto ecosystem can solely be an excellent factor for everybody concerned in it.

About the Author: Jay Hao is the CEO and Chief Customer Service Officer at OKEx.

Image by Arek Socha from Pixabay

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