DeFi

DeFi adopts some traits of TradFi – and that’s a good thing

Published

9 months ago

13 May, 2024

DeFi adopts some traits of TradFi – and that's a good thing

DeFi and cryptocurrencies as an industry are a natural response to the need for a freer financial system. Through several core primitives and dApps, DeFi has achieved relatively quiet success, and surpassing that may require more adoption from its main competitor.

Despite the enormous capital involved, DeFi remains a niche corner of the crypto industry, with far fewer users than centralized exchanges. For example, starting in 2023, Coinbase’s monthly assets user base of 7.4 million was easily triple that of all Challenge at around 2.5 million. Understanding how to navigate the DeFi world and stay current requires time, experience, and investable resources, making it much more difficult than comparable centralized platforms.

Despite significant growth on Ethereum, Solana and other chains, as well as new use cases like GameFi and NFTs, innovative technologies are naturally more difficult to use than familiar platforms, limiting their number of potential users .

New technology lets quirks of usage slide, but a technology as mature as DeFi could soon hit significant plateaus in its growth – unless something is done.

DeFi should be easy to access

Unfortunately, the DeFi landscape has some barriers to entry and general hurdles that make it difficult for new users to get started.

One of them is the complexity of the first setup involved. For example, just making the first transaction requires at least some basic knowledge on how to set up and manage a crypto wallet, connect it to a website, and understand the multiple transactions required to complete an action.

In this case, Metamask is a good example of how a historic and popular wallet can end up being complicated and enigmatic, especially for new users. For example, it lacks automatic tracking of all tokens, native support for new networks, and its mobile app offers no advantages over the basic browser extension.

Fortunately, wallets are becoming more user-friendly. On one hand, we look at specialization, where wallets launched by dApp teams like Uniswap, 1inch and others optimize the experience for their use cases (token swap).

Other general wallets, such as Coinbase Wallet and Trust Walletthe wallet acquired and adopted by Binance, have reached millions of users and are gradually taking market share from more “crypto-native” wallets.

Accessible and familiar interfaces are one of the most attractive features of centralized platforms such as Binance or Coinbase. Centralized crypto platforms are generally closer to traditional financial and banking systems. While it’s difficult to view your average banking app as an example to emulate, centralized platforms provide one of the most necessary features for a financial app: a sense of security, control, and a high level of security .

The DeFi user experience can be the best of both worlds, offering both decentralization, high user-friendliness and a sense of security. But despite the progress made with wallets, actual on-chain functionality remains fragmented, old, and hostile to newcomers. However, we are seeing notable progress on this front.

“Smart” smart contracts

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One of the most “annoying” features of smart contract platforms is the requirement to hold their native token to pay fees. Layer 1 platforms are particularly susceptible to this, as their coin can be difficult to acquire elsewhere.

With the proliferation of new channels, this is becoming an increasingly important problem to solve for onboarding new users.

We are seeing progress on Ethereum through initiatives like account abstraction or “smart wallets” that use smart contracts to improve user onboarding. However, Ethereum-based platforms should generally not be expected to lead the way in usability, mainly due to the many legacy and difficult-to-modify smart contracts they contain. Smart wallets can be great, but if half of dApps don’t support them, we’re back to square one.

New networks have an easier time delivering a user experience from day one. One of these platforms is Vara Networkwho developed “Signless” and “Payless” transactions for their L1.

This is made possible by a unique voucher system, used by dApp developers on Vara to pre-pay gas fees required for transactions, in addition to not needing multiple wallet confirmations to perform actions. This framework is a direct return to the Web2 model, in which developers pay for server usage themselves.

Other networks have also attempted to simplify usability, although few have focused specifically on this topic. There are many technological hurdles to improving the usability of smart contracts, and it’s likely we’ll have to wait a little longer for the experience to be seamless.

Making DeFi Safe

The last big problem with DeFi is its lack of security, both real and perceived. Ignoring personal hacks and phishing, which are undoubtedly huge problems, DeFi platforms have a reputation for being dangerous due to the possibility of hacking and fraud (“rugpulls”, as they are called in industry).

Some of this reputation isn’t entirely fair. For example, the centralized lending industry was nearly wiped out in 2022, when major providers like BlockFi, Celsius, and Genesis declared bankruptcy. DeFi lending has suffered relatively smaller setbacks, although it remains dangerous due to its vulnerability to oracle attacks.

The changing nature of blockchain asset prices, chain shutdowns, and many other dangers can lead to significant losses both for lenders, who could be left with poorly liquidated bad debts, and for borrowers, who could be unnecessarily liquidated and lose more than their potential gains. .

In this scenario, DeFi developers may also need to take inspiration from the world of TradFi. Teams like Nolus have introduced innovative risk management practices that, if adopted, could make the industry safer overall.

For example Lease Nolus DeFi has merged traditional leasing concepts into DeFi.

This model addresses the need to over-collateralize positions by limiting what users can do with the money they borrow. Much like leasing a car, where companies limit who can drive it, where and how to reduce their risks, Nolus allows borrowers to deploy capital in “whitelist” strategies. Additionally, a partial liquidation model helps avoid cascades and unnecessary stress on the system.

If more teams continue to make DeFi safer and more usable by taking inspiration from TradFi, cryptocurrency adoption will become the norm in a few years. It’s hard to overstate the benefits of self-preservation and a freer financial system, but that doesn’t mean products have to be hostile to newcomers. The DeFi community must be willing to take a look back in order to take the next step.

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DeFi

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Published

6 months ago

29 July, 2024

CoinFlix Staff

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Bonk and Pepe appear set to net new investors 10x to 100x returns over the next 12 months. However, cryptocurrencies in the DeFi play-to-earn gaming sector could offer even greater returns. As August approaches, Rollblock is emerging as a standout DeFi play-to-earn gem with the potential to 100x-1000x gains in the fourth quarter and beyond.

The project features an innovative revenue sharing model and exceptional accessibility, attracting players and investors. Additionally, Rollblock’s extensive game library of over 150 titles and enhanced sports betting are further driving excitement for the platform. Cryptocurrency analysts are expecting a sudden surge in demand. 800% a push for Rollblock from the beginning of September.

Bonk remains strong despite market fluctuations

While most well-known cryptocurrencies struggled throughout July, Bonk remained strong. As one of the highest-grossing meme cryptocurrencies of 2024, Bonk rose over 24% in July, while most cryptocurrencies experienced negative fluctuations.

Investors looking to add a relatively safe memecoin to their portfolio should consider Bonk. While Bonk is unlikely to generate explosive gains of 250x to 1,000x from here on out, Bonk could still theoretically provide returns in the 20x to 100x range.

Pepe should see a big rise in the next bull run

Alongside Bonk, Pepe has yet to go through a bull run. This means that there are still substantial gains to be made from Pepe over the next 12 months.

Pepe is down 4% in 30 days, but that shouldn’t worry Pepe investors in 2024. Experts believe Pepe’s best days are still ahead, with crypto analysts predicting a 10x to 50x surge in the next election cycle around November.

In the long term, Pepe could surpass the 100x mark for today’s investors. However, Pepe is a memecoin, and one should exercise caution when investing in purely speculative assets that have no utility.

Rollblock’s Unprecedented Hype Potential Could Push It Past 100x Valuation in Q4

Rollblock is a GambleFi Play-to-Earn token that integrates centralized and decentralized gambling on a single platform. By allowing players to earn rewards through active participation and gameplay, the platform creates a compelling incentive structure that appeals to both casual and competitive players.

With its cutting-edge blockchain technology, Rollblock offers top-notch security that keeps bets and transactions on the platform secure. The platform’s lack of KYC mandates appeals to both users who value anonymity and security.

Rollblock’s revenue sharing model, which allocates up to 30% of casino revenue to RBLK token holders, is a major draw for investors. The model involves burning half of the repurchased tokens and distributing the other half to stakers, increasing the token’s value and encouraging long-term investment.

The platform is also constantly evolving thanks to user feedback which has enabled updates such as the upcoming sports betting feature within the platform’s casino. This addition will complement Rollblock’s extensive game library of over 150 titles, ranging from traditional poker to innovative blockchain-based games.

RBLK is expected to emerge as one of the leading DeFi tokens in 2024. With a price of $0.0172 with impressive growth potential and over 140 million tokens sold recently, Rollblock is on track to enter the top 100 cryptocurrencies by Q4, making today a lucrative time to buy RBLK tokens.

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DeFi

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Published

6 months ago

29 July, 2024

CoinFlix Staff

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Veteran cryptocurrency investor Arthur Cheong believes the digital asset sector offers long-term holders a golden opportunity.

Cheong, the founder of DeFiance Capital, tell His 171,700 followers on social media platform X indicate that he believes decentralized finance (DeFi) is hugely undervalued.

According to Cheong, DeFi projects are innovating at a rapid pace and leaving traditional financial (TradFi) companies in the dust.

“It’s been a long time since I’ve been this excited about the risk/reward and potential upside of DeFi. This is probably the most misjudged moment since the pre-DeFi summer of 2020, with extremely promising prospects.

I see opportunities not only in OG (original) DeFi, but also in some newer projects that are evolving rapidly and growing at a pace that fintech startups will do anything to match.

The veteran investor also believes that crypto is now here to stay following recent launch from the Ethereum spot market (ETH) exchange-traded funds (ETFs) last week.

“Overall, the floodgates are open and there is no turning back. TradFi asset managers will continue to launch new crypto products because, guess what: there is huge demand for them!”

I expect them to launch actively managed crypto ETFs [in the] coming years. ”

Earlier this month, Cheong laid that it might be a bad strategy for cryptocurrencies to seek mass adoption, believing that digital assets are designed to disrupt several key financial sectors.

“I think we should accept that cryptocurrencies may not be suited for mass adoption like Web2, but rather are optimized for some narrow but very high-impact use cases like stateless global money, cross-border payments, and decentralized finance.

Chasing mass adoption of normies may be chasing the wrong Grail from the start.

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