The concept of decentralized finance has given rise to many exciting ideas and projects. More importantly, DeFi opportunities exist across all major blockchain ecosystems. As the industry continues to grow and evolve, more opportunities will become accessible to users worldwide.
DeFi Is On A Roll
One cannot deny there is tremendous potential in decentralized finance today. It is no longer about making Ethereum holders provide liquidity to earn trading fees, although DEX liquidity pools remain an appealing option. Several new products, services, and protocols have come to market to make decentralized finance accessible and exciting to crypto users and the mainstream alike.
Over time, the industry has become home to more complex concepts. Yearn Finance is an exciting example, as the set of protocols lets users optimize earnings through lending and trading services. Other similar projects have followed in its wake, creating a modular approach to decentralized finance and the opportunities it presents.
However, there is no time like the present, and there are still many new projects in development. Some explore a bit more unusual approaches, although one should not underestimate their potential. Diversification is crucial where one's finances are concerned, and the DeFi industry needs to diversify to accommodate as many potential use cases as possible. More importantly, decentralized finance needs to strengthen its connection to the real world.
Notable Projects Enforcing A Real-World Push
It is worth noting several DeFi projects and protocols will bridge the gap between the digital and real worlds. Below are some protocols that will help blur the lines and help introduce financial services and products to everyone equally.
The Alkemi project transforms decentralized finance by focusing on regulatory compliance and KYC-permissioned pools to attract institutional investors. Alkemi is the world's first decentralized liquidity network with institutional decentralized finance support. Bringing centralized finance institutions into DeFi requires compliance-oriented solutions, establishing a trust-counterparty liquidity environment.
Features to note include KYC/AML compliant non-custodial borrowing and lending. In addition, the liquidity for Akemi comes from top-tier providers, including Quantstamp, JST Capital, Shift markets, etc. Alkemi supports DAI, USDC, WBTC, and WETH, with a strong focus on the USDC stablecoin. Its permissionless pool lets users deposit Ethereum-based assets to lend and borrow and participate in staking pools, further enhancing the DeFi opportunities.
The objective of Centrifuge is to introduce a decentralized asset financing protocol. More specifically, any business can tokenize real-world assets and use those tokens as collateral to access financing through the asset-backed lending Dapp Tinlake. The opportunities for businesses are nearly endless, as they can tokenize invoices, real estate, and royalties subject to a stable yield source.
Whereas the largest business can access liquid markets today, Centrifuge levels the playing field for SMEs. Borrowers can finance real-world assets without intermediaries and tap into available liquidity. Investors can earn returns and Centrifugre Token rewards, an extra incentive to create a decentralized and desirable ecosystem. Tinlake, the consumer-facing Dapp, is an open marketplace of real-world asset pools where investors finance assets and for users to access on-chain borrowing against collateralized assets.
Establishing a cross-chain structured products protocol is a steep undertaking. Thetanuts goes one step further by combining this concept with vaults performing various intelligent options strategies. In essence, anyone can gain exposure to options regardless of their knowledge or expertise and explore organic yield earning opportunities. Thetanuts runs on Ethereum, BNB Chain, and Avalanche, with Polygon, Fantom, and other chains to follow suit. Selling automated options strategies to generate diversified and high-organic yield is a very appealing opportunity to bring more people into DeFi.
Moreover, Thetanuts - through its new Stronghold vault - enables risk management and a simple user experience to make options trading accessible to everyone. Letting users directly stake their assets into a DeFi Options Vaults exposes them to customized option vault indexes. Furthermore, investors have simpler investment choices and can withdraw their liquidity at any time while benefiting from mitigated risk through diversification.
Regulation Remains A Hot Topic
As the DeFi industry welcomes more real-world products and services, the focus needs to shift to regulation sooner or later. As many DeFi protocols still have security issues - and often suffer from hacks, thefts, and other incidents - there needs to be some sort of legal recourse for affected users. Introducing regulatory compliance can help address many of these shortcomings and create a more sustainable decentralized finance ecosystem.
There is tremendous potential in regulating DeFi without compromising decentralization or accessibility. With the help of Phree, any DeFi protocol can start building a regulatory compliant ecosystem. It is a solid approach for crypto builders and TradFi companies looking to explore decentralized finance opportunities. Regulation will instill much more confidence and legitimize DeFi to the mainstream audience.
A culmination of a broader regulatory compliant approach, mixed with real-world opportunities and sustainable low-risk yield, paves a bright future for the decentralized finance industry.