What the future holds for the DeFi market: expert opinion

CONTENT

  • Experts are confident that the DeFi market will collapse soon

  • Overall, DeFi drives crypto adoption

  • Investors could lose millions of dollars after a market crash

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The decentralized finance market has grown to an incredible size. DeFi capitalization Decentralized finance (DeFi) is financial services built on blockchain technology that offer users access to an open, efficient and … More has already exceeded $ 15 billion and continues to grow rapidly.

Crypto and DeFI Derivatives – Why are they so Important? | Interaxis.io

Bubble or trend: what the experts think

The development of the decentralized finance sector is causing controversy among crypto experts. Some are confident that DeFi will soon become hostage to its own growth. Others are convinced that the threat of the bubble is too exaggerated..

BeInCrypto asked Russian crypto experts what will happen to the DeFi market in the future and whether it will repeat the fate of the ICO sector, which burst a year after its launch.

Gleb Kostarev, Director of Binance in Russia, Ukraine and the CIS:

“At Binance, we believe that the role of DeFi is only now becoming the most obvious and we are confident that DeFi will only grow in the future. As we can see now the range of services provided in DeFi applications is already impressive: lending, loans, insurance, stablecoins and, of course, decentralized exchanges. Cryptocurrencies continue to march across the planet, becoming increasingly mainstream and finding new areas of use. People buy bitcoin, … More.

As of January 2020, around 90% of DeFi users on ETH were predominantly interested in using DEX, which clearly demonstrates users’ particular interest in DEX. And we believe the DeFi segment is still more “DEX” oriented. Last year, Binance launched Binance DEX in partnership with its developer community. At the moment, over 500,000 active wallets are connected to Binance DEX, which support about 130 trading pairs.

Binance announced the launch of the Binance Smart Chain mainnet this week. The parallel blockchain, working in conjunction with Binance Chain, adds the ability to create smart contracts and a staking mechanism for BNB, the native token of Binance Chain. Binance Smart Chain enables developers to build decentralized applications (dApps) on the Binance Chain ecosystem, opening up opportunities for building Decentralized Finance (DeFi) products and solutions. But despite the popularity of DeFi and its support from Binance, we believe that most of the projects in this area can fail, and only a few will remain in the market and become truly successful. We also see that a certain soap bubble is forming in the DeFi sphere, so projects from this area should be treated with extreme caution..

Bistox Exchange CEO Harutyun Nazaryan:

DeFi Round 2 Coming: Top DeFi Project with MOST Potential

– To understand the reasons for the sharp growth of the DEFI market, you need to know the attitude towards cryptocurrencies of those who have been in this area for at least 5 years. When working with cryptocurrencies, there is no sense of the reality of this money, the attitude is more playful and not as serious as if you invested in shares of the same Tesla. Thus, all holders of large portfolios are fun to play with. Getting into an adventure is a must have of the crypto market. Remember the story with Dogecoin. Remember how BTT was pumped even after the scam exit was announced. I all lead to the fact that the market lacked another gamble, another novelty a la 2017 ico boom. And the old system came into play with a new sauce. Quite safe and with guarantees – of course, DeFi immediately went to all market participants.

The growth of the DeFi market will continue for at least a couple of years, and further depends on the development of the market phases. The main thing is to survive the moment when the securities market collapses, and it collapses immediately after the re-election of US President Donald Trump, or a few months after .

We have already seen gwei wars, and realized that Ethereum is expensive and slow. But what we understood for sure is that even if Ethereum is expensive, Tron is still not interesting to anyone. It also became clear that the volume on DeX could be higher than on CEX. Any rise in the price of major cryptocurrencies creates free cash for people. And people with free electronic candy wrappers are happy to put them into new candy wrappers, which means that there will be more projects, both successful and not so successful. Well, of course, there will always be all sorts of pizza, baguette, sushi tokens making 10x in a couple of days.

Stanislav Itkin, CEO of ZYX Network cryptocurrency:

– The growth of the DeFi market is rather a group of factors. The growth of the DeFi market was triggered by the coronavirus pandemic and the inability of the traditional banking system to meet business needs. Bank loans today are expensive and difficult to obtain. To apply for a loan, you need to provide a lot of documents, wait for a response for weeks. You can get a loan or loan on the DeFi platform in minutes. At the same time, everyone wins: both the business, which receives the necessary funds for development, and the borrowers themselves, who, in the end, earn on interest.. 

The DeFi market is indeed experiencing explosive growth. Some tokens rise in price by 100-200% per day, and in fact, this is bad. Projects simply do not have time to respond to investor investments and issue millions of tokens to keep the startup liquid. But in the end the market will grow to such volumes that it will simply not be able to serve the needs of investors and will simply collapse. We observed the same situation in 2017-2018 with the ICO market. I think that DeFi tokens will still be popular until the end of the year, and then we will see the market drop. Therefore, I advise today to differentiate assets. Of course, DeFi tokens are also suitable for quick earnings, but for the long term you need to choose more stable coins, including the ZYX Network.

The popularity of the decentralized finance sector has accelerated the adoption of cryptocurrencies by large commercial and institutional investors, and this is definitely a plus. The decentralized finance market projects that are built on the Ethereum platform push the price of the coin up. Bitcoin is also growing in price, as well as a number of other coins. All this plays into the hands of investors.

If a crash occurs, many investors will lose millions of dollars. Cryptocurrencies may again be declared a fraudulent and speculative instrument, which is not good for the market.

Development Director of EXMO Exchange Maria Stankevich:

– In fact, DeFi is what we want from banks today, when we collect 10 million certificates every time that you are not a camel and ask ourselves a question – is it really impossible to make a single register, where information will be available every time to all organizations and not you will need to be 145 in the queue at the “establishment”, which is open 3 days a week with a break for lunch and afternoon tea. With Defi, bank customers no longer have to collect a huge amount of certificates and documents confirming their credit history and solvency. It will be enough to lay a few cryptocurrency tokens and get the necessary loan in any bank in the world. So, for example, Russian users can get loans from American banks, and Europeans can borrow from banks of the Emirates or China..

What the future holds for the DeFi market: expert opinion

In my opinion, DeFi is a hype, but generally useful, why?
Firstly, the technologies are not ready for mass adoption, but new challenges and requirements give rise to the need to fulfill them, so from BTC with its speed / bandwidth and the lack of contracts, we have already come first to Ethereum, now to EOS , Tron and Cosmos and continue move forward (Polkadot, Ethereum 2.0 etc)
Secondly, DEX in the current state does not differ much from centralized exchanges in terms of the absence of some kind of “control center”, but they are already moving towards full-fledged dApps.
Thirdly, the Market is looking for new “hype” applications for blockchain technology, at the moment it is DeFi, before that there were ICOs, for example. This allows you to increase market capitalization, pump it up with investments and develop technologies.

In fact, a certain pump is already present, since the DeFi market seems to us to be greatly overvalued. Tokens, which appeared just a few months ago, are already among the top leaders in terms of cryptocurrency capitalization. At the same time, I do not at all belittle the importance and interestingness of projects in general, but you need to understand that the similarity with ICO is scary. There is no added value of projects, funds are only redistributed between participants, and project tokens are an ideal space for speculation.
To date, the rise in the value of DeFi tokens has revitalized the market quite strongly, and we, as an exchange, are certainly happy about it. New promising and interesting projects, an active community – these are undoubtedly positive aspects. But I note that we recommend our clients to carefully evaluate assets for investment, since the overvaluation of some tokens and the excessive hype, which may turn out to be another bubble, may turn out to be not in their favor.

CEO‌ ‌BTC-Alpha‌ Vitaly Bodnar:

– The cryptocurrency world is developing rapidly. A large number of progressive adherents of cryptocurrencies consider DeFi a new round in the development of the industry. For this reason, a big hype appeared, which led to a significant increase in the number of DeFi tokens. Many believe that these are, in principle, the markets of the future. They say that DeFi will be able to replace the banking, credit systems, and a number of other instruments, to solve certain problems that are now expensive and complex. I do not deny this possibility. However, I believe that at the moment this tool is overvalued in the same way as at the time – ICO.

In fact, the pump is happening right now. Some projects have grown by thousands, and even tens of thousands of percent. And those who initially invested $ 1000, for example, may now have a million (s). At the moment, the market is starting to overheat, as for me. And here the question is rather when the dump will be. So far, there are no clear signals of a march down, but it will definitely happen.

The DeFi market has a positive impact on the cryptocurrency market. There is already a lot of progress on ETH. This is precisely due to the fact that DeFi is built on smart contracts, in particular on Ethereum. And due to the popularity of DeFi, Ether has grown by over 50% in the last 2 months. A number of other reasons (including ETH staking) contributed to this growth, but one of the key ones is the use of Ethereum in DeFi. Naturally, when there is a dump, there will be disappointment in a large number of projects. Now it is a strong hype. Everyone talks about DeFi, not everyone understands, someone makes money. In my opinion, there is some future behind this. I share the opinion that DeFi will change the crypto industry in a certain way.

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What the future holds for the DeFi market: expert opinion
What the future holds for the DeFi market: expert opinion

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What the future holds for the DeFi market: expert opinion
What the future holds for the DeFi market: expert opinion

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