Moving forward, DeFi will contribute to developing the next generation of computing advancements and potentially whole new economic sectors. The primary objective of Web3 enterprises would be to increase user accessibility to the blockchain network. The construction of the lighting network to expedite Bitcoin transactions and the update to Ethereum 2.0 are examples of approaches to enhance the user experience so that when a greater proportion of users adopt cryptocurrencies, they face fewer concerns like high transaction fees for tiny purchases.
Currently, DeFi is controlled by existing banking, AML/KYC, and financial regulations. However, the regulatory restrictions applicable to cryptocurrencies may not necessarily apply to DeFi. Traditional regulatory systems focus on centralised businesses that provide services and/or issue financial assets. In the DeFi sector, autonomous apps offer certain services that cannot be halted as long as they provide economically valuable services.
Enthusiasts of blockchain feel that stablecoins may encourage more individuals to utilise the sector's capabilities in 2022. Numerous cryptocurrencies exhibit price volatility, however stablecoins are intended to decrease instability. As they are tied to a reserve asset, they can make them eligible for payments and open the road for the usage of DeFi beyond speculative investments. It also makes them appealing to cautious investors who were previously frightened away by the volatility of cryptocurrency prices.
In 2022, there is a significant public demand for developing a decentralised financial system for the next generation. Blockchain technology is fully capable of accomplishing this objective. Additionally, institutional investors believed in this niche. They are willing to invest in it, which will help its growth.
03.02.2023