Looking back at 2020, the rise of DeFi detonated the passion of the entire market
It is believed that the rise of DeFi has detonated the entire blockchain market in 2020.
In 2020, the liquidity mining of Compound has ignited the passion of the market and gave birth to many high-yield mining projects. However, the high yield is obviously unsustainable.
Then SushiSwap issued its own token and attracted many liquidities. Next, Uniswap regained its own market share through airdrop activities. At the same time, many decentralized exchange (DEX) of automated market maker (AMM) emerged to solve the problem of impermanent loss and slippage.
In addition to DEX, many lending related projects have begun to emerge again. With AAVE as the leader, the TVL has increased rapidly at the end of the year, and the price of token has repeatedly broken new highs.
As a basic infrastructure, DEX and lending are constantly being updated. Therefore, the top-level application has a sound development foundation. We have seen many aggregator projects soar, and derivatives on the chain have gradually expanded to bigger scale. Now, you can hedge risks in the DeFi ecosystem.
Since TVL’s first lending agreement only supports floating lending rates, innovations in the fixed interest rates will emerge in the second half of 2020. Such projects mainly support fixed-rate lending and income. The exploration of non-excess mortgage loan is also an underway. Investment products are becoming more diversified, not just high-yield and high-risk. However, such products are still in a relatively early stage.
Although the experiments with algorithmic stablecoins started long before the DeFi surge, they have never been as eye-catching as they were in the fourth quarter of 2020 and the first quarter of 2021. These assets are widely regarded as dangerous, especially those tokens that are completely unsupported by any collateral.
However, we should look at various attempts in the DeFi field with an open and excited attitude.
With the increasing congestion of Ethereum, the network efficiency problem must be solved urgently. The importance of the Layer-2 protocol has been highlighted in the Japanese dramas, and they have been continuously integrated into various DeFi projects. At the same time, other data services and infrastructure tools are also welcomed by the market.
While the Ethereum’s DeFi is expanding, the construction of DeFi on other blockchain projects is also in full swing. Among them, the centralized exchanges with user traffic and funds have natural advantages. The blockchain has been launched in a short period of time and has attracted many projects. However, although the fees of centralized exchanges are much lower than those of Ethereum, their overall ecology still cannot compete with Ethereum. Currently, NGK is the most eye-catching blockchain project due to the huge financial support and the blessing of the top design team. The NGK project has a natural attraction to many ecological builders in the DEFI market. It has the value of technological connection, and it further reduces the entry barrier for users. Therefore, the NGK has given DeFi projects considerable development foundation. In addition, the NGK also issues BGV tokens and issues them in the form of liquidity mining. As the dedicated token of the DEFI project, BGV, has received special attention from the market. According to data, the highest return on investment has reached 21,812% so far.
The charm of DeFi lies in its diversity, compatibility, and composability. At present, the NGK is surrounded by ecological builders with its various ecological projects.