Although a lot has happened in the blockchain ecosystem in 2020, by far the most significant development has been the rise of DeFi. Decentralized Finance solutions have reinvigorated the altcoin market and revolutionized the world of cryptocurrencies as a whole. The Decentralized Finance market keeps expanding and there’s no end in sight to the DeFi phenomenon. Since Decentralized Finance is expected to grow even further in the upcoming year, it’s time to take a look at some of the most promising DeFi trends for 2021.
The main reason for the ever-increasing popularity of Decentralized Finance is the profitability of DeFi projects. Solutions such as yield farming took the crypto community by storm because they allow the investors to earn income on a day-to-day basis, instead of passively holding tokens in a wallet and hoping that one day they will appreciate in value.
The DeFi ecosystem is very diverse, and it is constantly evolving. To ensure maximum profitability of investments, it’s essential to identify the most promising trends while they are still underappreciated. The Decentralized Finance market is always changing, so serious investors need to pay attention to trends before they become mainstream.
On this list, you will find the top 3 most promising DeFi trends for 2021: security-enhancing solutions, decentralized exchanges and Non-Fungible Tokens. These three trends were selected because they seem to have the most potential and the most room to grow in the upcoming year.
1. Security Enhancing DeFi Solutions
The rapid expansion of the DeFi market in 2020 was probably the most important event to happen in the crypto ecosystem in years. New DeFi projects were being introduced to the community every day, and the total capitalization of the Decentralized Finance ecosystem was growing at an incredible pace. But as DeFi was becoming more and more popular, some problems began to happen.
Unfortunately for investors, not all DeFi projects proved themselves to be genuine, and as the DeFi boom was gaining momentum, security issues, hacks and other incidents started to become increasingly common. The Harvest Finance (FARM) hack made investors lose funds worth $34 million, the Eminence (EMN) hack caused people to lose $18 million, and the SushiSwap exit scam cost investors $13 million – and these are just the most famous DeFi related incidents that happened in 2020.
The users of decentralized exchanges such as Uniswap were also subjected to security breaches, in particular in the form of flash loan attacks. Because of insufficient security measures, hackers were able to steal millions of dollars worth of investors’ cryptocurrency.
People who are serious about the safety of their funds started to look for more secure alternatives to Uniswap. The most promising one is definitely Anyswap: a completely decentralized cross-chain swap platform powered by the Fusion (FSN) token. The Fusion protocol specializes in providing cross-chain, cross-organization, and cross-data source solutions aimed at enhancing the security of blockchain-based financial operations.
One of the reasons why Anyswap is quickly gaining popularity over less secure alternatives is Fusion’s DCRM (Distributed Control Right Management): a set of advanced algorithms that form a complete security layer that greatly improves the security of digital assets stored on the Fusion blockchain. Features of Fusion’s DCRM technology – such as the decentralized storage and sharding of private keys – make sure that nobody can gain control over investors’ funds, which greatly improves the security of Anyswap.
It’s safe to say that DeFi related hacks will not suddenly disappear, and as the Decentralized Finance market will keep growing, security-related incidents will probably become more common. Because of that, it’s very likely that more and more people will turn away from less secure solutions, and turn to platforms like Anyswap, which are designed to provide the maximum security for users’ funds. With all that in mind, it’s very probable that the rise of security-oriented Decentralized Finance solutions will become the most significant DeFi trend of 2021.
2. Decentralized Exchanges
Decentralized exchanges (DEXs) have been around for a long time, but they used to be considered a novelty existing on the fringes of the crypto world, as the market was dominated by big centralized exchanges such as Binance and Coinbase. The rise of Decentralized Finance changed the blockchain ecosystem forever and made DEXs massively popular.
Centralized exchanges didn’t want to miss the opportunity provided by the DeFi boom, so they started to offer limited DeFi support and list some DeFi tokens. However, most people who want to invest in Decentralized Finance solutions still prefer to use decentralized exchanges, since DEXs like Anyswap or Uniswap allow the investors to purchase innovative DeFi tokens while they are still greatly undervalued, and the investment is most profitable.
The DeFi market keeps expanding, so it’s safe to assume that the continued expansion of decentralized exchanges can be one of the most promising DeFi trends to expect in 2021. DEXs have already gained massive popularity in 2020, but there’s definitely still a lot of room for growth.
One of the aspects in which decentralized exchanges like Uniswap were looking less attractive than major centralized exchanges such as Coinbase and Binance is security. Investors using centralized exchanges have so far been less likely to be subjected to hacking attacks and other similar incidents.
Decentralized exchanges that utilize military-grade security enhancements such as Anyswap are gaining popularity and their growth seems to be the most important DeFi trend to keep an eye on in 2021. Anyswap proves that DEXs can be even more secure than centralized exchanges, and the implementation of advanced safety-improving technologies such as Fusion’s DCRM will likely cause decentralized exchanges as a whole to become more and more popular in the upcoming year.
3. Non-Fungible Tokens
Non-Fungible Tokens have been around for quite some time, with the first NFT project CryptoPunks launching in 2017. But aside from the well-known CryptoKitties, none of the NFTs have managed to gain widespread popularity. This situation however has begun to change with the rise of DeFi, and currently, the projects involving Non-Fungible Tokens are starting to gain momentum again.
In simple terms, Non-Fungible Tokens are the digital equivalents of traditional trading cards and other collectibles. Most of the projects utilizing NFTs are based on the Ethereum network, but instead of using the ERC-20 token standard, they employ the ERC-721 standard, designed specifically to accommodate digital rarities such as Non-Fungible Tokens.
Traditional tokens such as ERC-20 are created to be used as digital currencies. Every token is the same, just as every dollar on your bank account is the same as every other dollar in existence. NFTs on the other hand are unique, and can be compared to works of art such as paintings. Just as with real-life works of art and collectibles, NFTs can reach very high prices, and some of them are being traded for tens or even hundreds of thousands of dollars.
Although Non-Fungible Tokens have been considered a mere novelty for some time, the rise of Decentralized Finance solutions opened new possibilities for NFTs. Leading DeFi projects such as Yearn.Finance started offering enhanced NFT functionalities, such as the ability to insure digital collectibles. The combination of Decentralized Finance and Non-Fungible Tokens may prove very attractive to investors, and become one of the most promising DeFi trends in 2021.
For most people, 2020 was a very weird year. For cryptocurrency investors and blockchain enthusiasts, it was a year that gave them reasons for optimism. After a period of stagnation the crypto market has awoken, bitcoin is nearing its new all-time high, and many people believe that a massive bull run is imminent.
There’s no denying that the rise of DeFi has been the most influential event to happen in the blockchain ecosystem in years. Decentralized Finance projects keep appreciating in value, and the market as a whole seems to just be starting to gain more momentum, as there’s still a lot of room to grow.
The upcoming year will surely bring us many new and innovative DeFi projects, but some of the trends that might dominate the Decentralized Finance market in 2021 are already becoming prominent. The increasing popularity of DEXs which offer improved security will likely cause the entire ecosystem of decentralized exchanges to grow, and Non-Fungible Tokens may give DeFi an additional boost.
So far, the single most promising DeFi trend for 2021 seems to be the rise of ultra-secure decentralized exchanges pioneered by Anyswap. Security issues have been the biggest problem of the DeFi community in 2020, and eliminating them will likely cause the entire DeFi market to explode.
Disclaimer: This is a paid post and should not be considered as news/advice