According to the majority of cryptocurrency experts, the majority of the market is too focused on fighting the current market volatility.
As bears are holding strong ground, analysts and financial experts are forming policies and initiatives on how to counter these bulls.
But amid all these developments, most of us have ignored the potential of DeFi that is still untapped.
There is not even a second thought about the fact that Decentralized Finance (DeFi) has emerged as the biggest concept in the crypto market over the last two years.
DeFi platforms utilize smart contracts to interconnect with centralized financial services.
Due to the speed and security, many of the centralized crypto exchanges are now being launched on Defi protocols.
But now is the time for the decentralized ecosystem to bring more diversity.
Is The Potential of DeFi Still Untapped?
The total value of digital assets locked across the various Decentralized protocols was around $256 billion.
But 2022 was among the worst years for the digital currency market as the value of total digital assets locked by the DeFi protocols plunged to $73 billion.
But analysts do believe that this sort of crisis holds the potential for future opportunities. DeFi, on the other hand, has a lot of potentials and can offer many services in the future.
What Future Options Does DeFi Hold?
The fact is that the primary importance0020of any ecosystem is assets or money.
The same goes with DeFi, as money or assets hold integral importance. The developers of DeFi protocols are utilizing stablecoins to fight market volatility.
Experts believe these decentralized finance protocols can use stable coins as assets rather than currency. This is because stablecoins are less volatile and give sustained returns on investment.
There is a need for these DeFi protocols to grab more opportunities and play big.
2. Decentralized Exchanges and Lending Platforms Offer Strong Leverage to DeFi
The developers of Decentralized platforms should charge higher prices upon using the decentralized exchanges and lending platforms.
Decentralized lending platforms capture the highest numbers of assets deposited by investors, as lending platforms demand users to submit their assets as collateral.
The higher lending fee would help the lending platforms to raise more funds. This will also ensure the flow of liquidity means lending operations can be scaled up.
So higher lending charges are important for these DeFi lending platforms to maintain their sustainability.
The Untapped Potential of Derivatives
Derivatives are the hottest product being offered by the decentralized finance protocols. Following the current market volatility, many investors have invested in derivatives.
But the derivatives potential is still untapped.
Derivatives are part of the advanced DeFi. These products are immensely important for the survival of decentralized finance.
But as of now, investment in derivatives offers little benefit to decentralized crypto exchanges.
That is why more options and derivatives diversity is needed to fully exploit the potential of decentralized finance.
Most recently, Solana’s innovative steps have shown that Ethereum can cater to the larger needs of the market. This means Ethereum can occupy a much larger market share by enforcing advanced protocols.
The substantial majority of the decentralized exchanges, including Ethereum, do not support direct cryptocurrency trading.
That is why the larger market share or market cap is occupied by centralized cryptocurrency exchanges such as Binance and Coinbase.
Top tap the greater potential of DeFi ecosystem progressive changes is needed. If things kept moving in the same direction, it would be nearly impossible to utilize the full potential of the DeFi ecosystem.
Rather than acting just as a development platform, it is time for decentralized crypto entities to be more trade-oriented. That is the only way the DeFi ecosystem’s market cap will grow.
Recently Ethereum blockchain has struggled to expand its use, and its use has been minimized dramatically. This has also turned ETH deflationary.