It’s no secret that DeFi tokens have underperformed over the last couple of years. What is more concerning is the lack of new users and ultimately TVL. There has been little interest in decentralized finance and the alchemy it offers. The chart below from DeFillama shows how DeX volume (green bars) is increasing, stablecoin market cap (green line) is at an all time high while DeFi TVL (blue line) is still below where it was in late 2021. What’s happened over the last 4 years?There has been a certain amount of consolidation towards DeFi market leaders such as Uniswap and Aave. We’ve seen few new players establish traction and revenue which has led to an exodus of talent and mindshare. The uphill battle to attract users makes it a challenging prospect for founders and developers. This leads to less innovations and break out products, leading to less to get excited about, creating a vicious circle. How do we make DeFi great again?Speculation. Perceived opportunity brings users. We need to attract mainstream users back to decentralized finance. This is harder than it sounds given the current market conditions. There are a few things aligning for the subsector however.
DeFi is fundamental to the space and it’s promise of open, transparent, inclusive, permissionless finance is important. It might be lagging but it’s not going away. Social links are below and if you enjoyed this newsletter I would appreciate it if you could share this content |
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