Top Five Predictions for Decentralized Finance—2022 to 2025

Anusree Bhattacharya | March 21, 2022 | 121 views

Top_Five_Predictions
Cryptocurrencies were the least affected in 2021, despite the numerous challenges that hit the financial sector. According to a Global Market Insights study, the market capitalization of cryptocurrencies reached $3 trillion for the first time in 2021. Because of how much cryptocurrencies have changed in value over the last few years, DeFi also known as decentralized finance, has the potential to grow in the coming years.The rising valuation of cryptocurrencies has paved the way for numerous ways for DeFi, including NFTs and metaverse, to drive growth and reshape the financial industry.

As there have been major developments and significant shifts in the financial industry, 2022 seems profitable for decentralized finance. DeFi technology is on the verge of expansion. With the rise of Bitcoin and Ethereum, it looks like decentralized finance is becoming more popular.

In the digital age, tokenization compliments information-based technology as a decentralized way of capital allocation.”

Demetrios Marantis, Senior Vice-President and global head of government engagement at Visa


Decentralized Finance – Top 5 Predictions

It will be interesting to see how financial services will be run in the future with the help of new DeFi technology.


NFTs Valuation will Increase at a Rapid Pace

Non-fungible tokens (NFT) have inflated the importance of cryptocurrency.NFT marketplaces like Mintable and Open sea and artworks such as Crypto Punks have grown in popularity. These platforms now have devoted traders and service providers. This indicates that the importance of DeFi is equally on the rise. Gaming, sports, and collectibles all had secondary sales of more than $15 billion in the last few years, according to a recent study by Messari.


Ethereum to Lead

Ethereum is expected to dominate in the DeFi wallet development trend. Ethereum is considered the best supporter of DeFi as it projects loyalty when it comes to democratizing financial transactions in trading processes. According to JPMorgan’s study, Ethereum is the ‘most critical’ development in scaling the Ethereum network in decentralized finance. The study also revealed that the network’s 70% capital market share in DeFi can continue to rise in the coming years. Because of these changes, the finance industry has seen a big rise in DeFi platforms in a short time.


Crypto Investments to Become More Sustainable

These days, several crypto exchanges, financial institutions, and mining companies are offeringgreen products and services to their customers. Before the COVID-19 crisis, numerouspotential crypto investors were reluctant to invest in crypto because of the relatively low valuation and mining of Bitcoin (one of the essential cryptocurrencies). Another reason is the complexity of ESG regulations.

But interestingly, Bitcoin-based transactions and investments have become more sustainable in the new landscape of decentralized finance. For instance, Bitdeer, a giant bitcoin mining company, and Riot Blockchain Inc. (RIOT) are increasingly tapping into making crypto investments in renewable energy sources, such as solar energy and geothermal, to reduce CO2 emissions in support of green finance. Such examples show that DeFi technology can be used to makecrypto investments, which will help decentralized financial services become more powerful in the coming years.


DeFi Seeks to Monetize Blockchain Technology

According to a survey by Deloitte, from 2017-2020, there weremore than 1 billion traders worldwide, and they traded approximately $159 billionsince then, and will increase to$256 billionby 2025 due to the rising investment interest.

And how will they be able to do it? The answer is blockchain technology. The revolution in financial services is happeningonblockchain technology rather than on a server. In addition, mining has become more critical because of the rise of cryptocurrency, making trading tasks like transactions risk-free and effortless.

Proper DeFi protocols are being set up to allow free transferability of the amount for trading. It is because traders probably want to earn a return on their assets. So, DeFi technology, based on blockchain, seeks to monetize trading platforms in the coming years. 

A survey by Toptal revealed that 63% of traders and 84% of developers are curious about investing in transferable digital assets between trading platforms. A similar scenario was recorded in 2019, where E-Trade was developed and was used for trading over blockchain technology. In fact, in 2020, the crypto trading platform Vanguard created a way for crypto owners to sponsor professional traders. If DeFi becomes popular in the next fewyears,traders will be able to invest large amounts and get faster returns from any part of the world.


DeFi Technology Hopes to Resolve Scalability Issues

Currently, the DeFi ecosystem is witnessing rapid growth.However, increasing transaction costs is one of thesignificant issues. For instance, the issue is rising because of the rapidly growing Ethereum gas price. The Ethereum gas cost needs to be paid to successfully execute a transaction over the Ethereum blockchain network. The price is set according to how much computational power there is and how much people want to use it.This is done through transactions on the network.

The average transaction price has been rising fast since the end of 2020. It has reached beyond $69 per transaction in 2021. As a result of the rising transaction costs, many projects are being launchedin the crypto space that provide cross-chain functionality on the DeFi platforms. If blockchain technology can be used, a decentralized finance system hopes to keep costs for transactions across borders as low as they can get.

The Polkadot network is the most successful innovator in this space to diminish the same. The network enables users to create custom blockchains through cross-blockchain transfers of tokens and other assets. The network helps in efficient transactions by spreading them across multiple blockchain platforms. The best thing is that a few existing DeFi applications have been built on top of Polkadot’s network. The platform offers a new DeFi network where transactions are made more efficient and less expensive.

In a nutshell, 2022 will be an opportunistic year for technological advancements. The ecosystems of DeFi are expected to take center stage in the financial sector in the coming year. Moreover, many investors are also investing their money in the DeFi development process. Apart from that, the crypto verse is witnessing some ground-breaking innovations.

Decentralized finance is an unbundling of traditional finance,”

Rafael Cosman, CEO, and co-founder of TrustToken

Frequently Asked Question


How to make money with DeFi?

Making money with DeFi is an easy task. An individual needs to deposit the amount of money in the platform, further paying the returns under the APY (annual percentage yield).


What is DeFi, and why is it used?

DeFi means decentralized finance, a digital currency that operates on its blockchain. It is mainly usedto earn interest or valueon cryptocurrencies like Bitcoin and Ethereum.


How to trade in DeFi?

There are a few steps to trading in DeFi. The steps are:

  • Choose a crypto-basedwallet username
  • Understand and plan for Ethereum network costs
  • Invest and transfer Ethereum to the crypto-basedwallet
  • Trade on assets using Ethereum

Spotlight

SABB

SABB is an Associated Company of the HSBC Group, one of the world’s largest banking and financial services organisations with over 10,000 offices in 83 countries and territories across Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. This association means that SABB customers not only have access to our own market-leading services and customer care, but can also tap into the HSBC Group’s global network, resources, skills, specialist knowledge and expertise,SABB is a Saudi Joint Stock Company with a strong track record and a heritage that stretches back almost 30 years...

OTHER ARTICLES
CORE BANKING

Why Payments-as-a-Service is the first choice for FIs

Article | June 22, 2022

The pace of change within the global payment’s technology space is still at full speed with no sign of slowing down. While traditional incumbents have until recently taken comfort in their size and decades of dominance, new digital-only challenger banks are ramping up and making a huge impact on the global financial landscape.

Read More
CORE BANKING

BIG TECH IN FINANCE: A DEEP DIVE INTO THE FUTURE OF FINTECH

Article | July 20, 2022

The following article looks at Big Tech and its impact on the financial services sector. Whilst competition from small fintech startups will certainly take away some market share from traditional banks, the impact of “GAFA” could be huge. The fintech movement did more than unbundle banking and its core services — it spurred financial inclusion across Asia, increased overall economic growth, and made significant inroads into the finance value chain. The born-digital companies brought technology to the forefront, attacking the traditional risk-averse sector from various points — digital payments, insurance, P2P lending, and investment management, among other avenues.

Read More
PAYMENTS

How Fintechs Expanding in Latin America Can Build Trust with SMEs

Article | July 21, 2022

Small businesses in emerging economies are notoriously underfinanced. Despite making up over 99.5% of the economy in Latin America, SMEs face a financing gap in the trillions of dollars. For example, up to 78% of small businesses in Argentina and 45% in Peru struggle to grow because of financial constraints. Numerous articles and institutional white papers point to the lack of trust between banks and SMEs as a major cause of this financing gap. Banks simply do not know how to accurately calculate small business risk, especially in volatile economies in Latin America, so they offer high interest rates or pass on providing credit altogether.

Read More

Could Google Acquire Tesla For $250 Billion?

Article | February 10, 2020

In the following analysis, we take a look at why Tesla (NASDAQ:TSLA) could be an attractive acquisition target for Google (NASDAQ:GOOG). We break down our analysis into three parts: what Tesla would stand to gain, what Google would stand to gain, and a scenario where Tesla’s value could rise to $1.5 trillion aided by a deal with Google.

Read More

Spotlight

SABB

SABB is an Associated Company of the HSBC Group, one of the world’s largest banking and financial services organisations with over 10,000 offices in 83 countries and territories across Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. This association means that SABB customers not only have access to our own market-leading services and customer care, but can also tap into the HSBC Group’s global network, resources, skills, specialist knowledge and expertise,SABB is a Saudi Joint Stock Company with a strong track record and a heritage that stretches back almost 30 years...

Related News

FINANCIAL MANAGEMENT

MO Technologies Chooses Esri's ArcGIS Platform to Support Alternative Credit Scoring Tool

MO Technologies | March 22, 2022

MO Technologies, which offers financial technology (fintech) companies a more complete view of a person's creditworthiness through location intelligence, has adopted Esri's ArcGIS Platform to provide the precise, frequently updated data at the core of MO's tools used to complement traditional credit scoring models. Understanding that the financial life of a person doesn't always fit the mold used by credit scoring bureaus and banks, leaders at MO believe knowing more about where a person lives and works can help fill in gaps and warrant extending credit to some of the hundreds of millions of people left out of the financial system. Situations can change dramatically, as we've seen in the last two years, It's important to account for evolving characteristics in a location where a credit applicant lives. Placing data in a geographic context offers valuable insights and crucial understanding." Javier Díaz-Cely, MO's chief analytics officer. Central to MO's software as a solution (SaaS) offerings—including its latest product, MO Geo—is reliable information from Esri, the global leader in location intelligence. By adopting ArcGIS Platform, Esri's platform as a service (PaaS), MO unlocked access to Esri's rich demographic data and precision geocoding services. We're excited MO turned to ArcGIS Platform when the company needed reliable data and geocoding, By offering flexible solutions, we allow our customers to focus on what they do best." David Cardella, Esri product manager for developer technologies. MO uses data about housing prices, the cost of food, access to transportation and public utilities, and more, to create models that can help estimate what a person's income or financial risk might be. MO's team discovered that in Argentina, for example, the distance between a person's home and an ATM is a significant factor. In Mexico, it is important to consider home prices and how many grocery stores are in an applicant's vicinity. MO Geo, the company's recently launched stand-alone product, provides fintechs and other financial institutions with geographical indexes—developed through machine learning—that can be used as inputs to complement traditional models. The product also works in tandem with MO Score, the company's own credit scoring platform. Beyond financial institutions, the company has worked with businesses in the gig economy as well as consumer product goods manufacturers that wanted to extend credit to small merchants with little financial history. Based in Bogotá, Colombia, MO has focused its work so far in the Latin America and Caribbean regions. The company's technology has already played a role in one million credit assessments. A free version of the MO Geo solution is being made available in the US. The company is expanding the product's availability to Mexico, Colombia, and the rest of the Latin America and Caribbean regions. About MO Technologies At MO, we are moving technology forward for a more inclusive, digital & seamless financing. We are a SaaS credit tech company covering the E2E digital credit lifecycle management for origination, servicing, and debt collection in a one-stop-shop schema. Our productized solution enables a laser speed launch of your new hyper-personalized product, fully digital and integrated seamlessly with your platforms. We are the right tech partners for Fintechs and traditional issuing players as we enable them to revolutionize the credit industry. About Esri Esri, the global market leader in geographic information system (GIS) software, location intelligence, and mapping, helps customers unlock the full potential of data to improve operational and business results. Founded in 1969 in Redlands, California, USA, Esri software is deployed in more than 350,000 organizations globally and in over 200,000 institutions in the Americas, Asia and the Pacific, Europe, Africa, and the Middle East, including Fortune 500 companies, government agencies, nonprofits, and universities. Esri has regional offices, international distributors, and partners providing local support in over 100 countries on six continents. With its pioneering commitment to geospatial information technology, Esri engineers the most innovative solutions for digital transformation, the Internet of Things (IoT), and advanced analytics.

Read More

BITCOIN AND CRYPTO

NOYACK Logistics Income (NLI) Started Accepting Cryptocurrency Payments with Partnership with BitPay

NOYACK | March 21, 2022

NOYACK Logistics Income (NLI) is now accepting cryptocurrency payments for share with the partnership with BitPay. NLI is sponsored by NOYACK Capital and for investing in supply chain real estate. The partnership has made NLI the first-ever REIT to accept cryptocurrency and enables investors to fund their commitment with Bitcoin (BTC), Wrapped Bitcoin (WBTC), Dogecoin (DOGE), and Litecoin (LTC). In addition, investors can also use Ethereum (ETH), Bitcoin Cash (BCH), ShibaInu (SHIB), and five USD-pegged stablecoins (BUSD, DAI, GUSD, USDC, and USDP) for payments. NLI is the first REIT to partner with BitPay, a leading crypto payment service provider and one of the initial alternative investment offerings that enable investors to convert digital cryptocurrency into ownership of a hard asset seamlessly. This partnership is a critical way to connect with today's investors to include investment real estate and cryptocurrency in their retirement accounts. NOYACK's BitPay payment integration is one of the pioneering initiatives for structured commercial real estate investment. Investors can now divide investment between traditional and cryptocurrency. They can easily select their preferred wallet or exchange, select a cryptocurrency, scan a QR code or manually enter payment details. Interestingly, they can easily do it through their mobile devices. CJ Follini, CEO of NOYACK Capital. This is another example of moving crypto mainstream. More investors are asking to move cryptocurrency allocations into physical assets like real estate. This ability puts Noyack at the forefront of alternative investment management. The market potential for crypto adoption bridging into the physical world is huge. We estimate $55 Billion in purchases and investments using cryptocurrency in the next 12 months." Stephen Pair, CEO of BitPay. Therefore, bbeingNOYACK's proprietary analytics and market research, NLI will further identify properties serving emerging needs for autonomous vehicle infrastructure, climate-controlled storage, same-day delivery, and solving other rapidly evolving uses.

Read More

PAYMENTS

EVODeFi comes out with its new payment solution EVODeFi.Pay

EVODeFi | March 21, 2022

EVODeFi cross-chain solution just unveiled its new product – EVODeFi.Pay. This is a powerful tool for making crypto payments, allowing sellers to accept and bill cryptocurrency to customers with minimal time and effort. The product will be especially valuable for users who want to perform their money transactions in cryptocurrency without using complicated schemes. The high-tech system of EVODeFi provides numerous crypto services including business tools to increase crypto payments, a bridge between networks, and a high-tech system to work with crypto exchange and crypto-salaries. A professional team that has already launched one of the top 5 bridges created EVODeFi.Pay that facilitates the process of exchanging cryptocurrency between sellers and buyers. EVODeFi.Pay is a product that performs fast crypto-transactions between vendors and customers. The process of using the service is extremely simple: a buyer chooses the cryptocurrency which he or she wants and pays for the purchase. EVODeFi.Pay converts one cryptocurrency into another and sends the payment to a seller in the crypto that has been chosen. Since many have refused to use BTC/ETH in favor of faster networks, EVODeFi.Pay can offer several popular networks, such as BSC, Fantom, Avax, Polygon, which already have a large number of users. In addition, the development team uses a powerful security system to protect transactions at all stages. Moreover, convenient localization and the ability to use the service on any device will greatly facilitate integration. About EVODeFi: EVODeFi is a cross-chain solution providing a set of crypto products including a bridge between networks, business tools to increase crypto payments, and a high-tech system to work with crypto exchange and crypto-salaries projects, available in a single system. EVODeFi develops the following services: Bridge, Pay, Exchange, Payroll and App. Using the latest technologies and great experience, the EVODeFi system works at the international level, providing its services in regions around the world, for example in the USA, Europe, and South America.

Read More

FINANCIAL MANAGEMENT

MO Technologies Chooses Esri's ArcGIS Platform to Support Alternative Credit Scoring Tool

MO Technologies | March 22, 2022

MO Technologies, which offers financial technology (fintech) companies a more complete view of a person's creditworthiness through location intelligence, has adopted Esri's ArcGIS Platform to provide the precise, frequently updated data at the core of MO's tools used to complement traditional credit scoring models. Understanding that the financial life of a person doesn't always fit the mold used by credit scoring bureaus and banks, leaders at MO believe knowing more about where a person lives and works can help fill in gaps and warrant extending credit to some of the hundreds of millions of people left out of the financial system. Situations can change dramatically, as we've seen in the last two years, It's important to account for evolving characteristics in a location where a credit applicant lives. Placing data in a geographic context offers valuable insights and crucial understanding." Javier Díaz-Cely, MO's chief analytics officer. Central to MO's software as a solution (SaaS) offerings—including its latest product, MO Geo—is reliable information from Esri, the global leader in location intelligence. By adopting ArcGIS Platform, Esri's platform as a service (PaaS), MO unlocked access to Esri's rich demographic data and precision geocoding services. We're excited MO turned to ArcGIS Platform when the company needed reliable data and geocoding, By offering flexible solutions, we allow our customers to focus on what they do best." David Cardella, Esri product manager for developer technologies. MO uses data about housing prices, the cost of food, access to transportation and public utilities, and more, to create models that can help estimate what a person's income or financial risk might be. MO's team discovered that in Argentina, for example, the distance between a person's home and an ATM is a significant factor. In Mexico, it is important to consider home prices and how many grocery stores are in an applicant's vicinity. MO Geo, the company's recently launched stand-alone product, provides fintechs and other financial institutions with geographical indexes—developed through machine learning—that can be used as inputs to complement traditional models. The product also works in tandem with MO Score, the company's own credit scoring platform. Beyond financial institutions, the company has worked with businesses in the gig economy as well as consumer product goods manufacturers that wanted to extend credit to small merchants with little financial history. Based in Bogotá, Colombia, MO has focused its work so far in the Latin America and Caribbean regions. The company's technology has already played a role in one million credit assessments. A free version of the MO Geo solution is being made available in the US. The company is expanding the product's availability to Mexico, Colombia, and the rest of the Latin America and Caribbean regions. About MO Technologies At MO, we are moving technology forward for a more inclusive, digital & seamless financing. We are a SaaS credit tech company covering the E2E digital credit lifecycle management for origination, servicing, and debt collection in a one-stop-shop schema. Our productized solution enables a laser speed launch of your new hyper-personalized product, fully digital and integrated seamlessly with your platforms. We are the right tech partners for Fintechs and traditional issuing players as we enable them to revolutionize the credit industry. About Esri Esri, the global market leader in geographic information system (GIS) software, location intelligence, and mapping, helps customers unlock the full potential of data to improve operational and business results. Founded in 1969 in Redlands, California, USA, Esri software is deployed in more than 350,000 organizations globally and in over 200,000 institutions in the Americas, Asia and the Pacific, Europe, Africa, and the Middle East, including Fortune 500 companies, government agencies, nonprofits, and universities. Esri has regional offices, international distributors, and partners providing local support in over 100 countries on six continents. With its pioneering commitment to geospatial information technology, Esri engineers the most innovative solutions for digital transformation, the Internet of Things (IoT), and advanced analytics.

Read More

BITCOIN AND CRYPTO

NOYACK Logistics Income (NLI) Started Accepting Cryptocurrency Payments with Partnership with BitPay

NOYACK | March 21, 2022

NOYACK Logistics Income (NLI) is now accepting cryptocurrency payments for share with the partnership with BitPay. NLI is sponsored by NOYACK Capital and for investing in supply chain real estate. The partnership has made NLI the first-ever REIT to accept cryptocurrency and enables investors to fund their commitment with Bitcoin (BTC), Wrapped Bitcoin (WBTC), Dogecoin (DOGE), and Litecoin (LTC). In addition, investors can also use Ethereum (ETH), Bitcoin Cash (BCH), ShibaInu (SHIB), and five USD-pegged stablecoins (BUSD, DAI, GUSD, USDC, and USDP) for payments. NLI is the first REIT to partner with BitPay, a leading crypto payment service provider and one of the initial alternative investment offerings that enable investors to convert digital cryptocurrency into ownership of a hard asset seamlessly. This partnership is a critical way to connect with today's investors to include investment real estate and cryptocurrency in their retirement accounts. NOYACK's BitPay payment integration is one of the pioneering initiatives for structured commercial real estate investment. Investors can now divide investment between traditional and cryptocurrency. They can easily select their preferred wallet or exchange, select a cryptocurrency, scan a QR code or manually enter payment details. Interestingly, they can easily do it through their mobile devices. CJ Follini, CEO of NOYACK Capital. This is another example of moving crypto mainstream. More investors are asking to move cryptocurrency allocations into physical assets like real estate. This ability puts Noyack at the forefront of alternative investment management. The market potential for crypto adoption bridging into the physical world is huge. We estimate $55 Billion in purchases and investments using cryptocurrency in the next 12 months." Stephen Pair, CEO of BitPay. Therefore, bbeingNOYACK's proprietary analytics and market research, NLI will further identify properties serving emerging needs for autonomous vehicle infrastructure, climate-controlled storage, same-day delivery, and solving other rapidly evolving uses.

Read More

PAYMENTS

EVODeFi comes out with its new payment solution EVODeFi.Pay

EVODeFi | March 21, 2022

EVODeFi cross-chain solution just unveiled its new product – EVODeFi.Pay. This is a powerful tool for making crypto payments, allowing sellers to accept and bill cryptocurrency to customers with minimal time and effort. The product will be especially valuable for users who want to perform their money transactions in cryptocurrency without using complicated schemes. The high-tech system of EVODeFi provides numerous crypto services including business tools to increase crypto payments, a bridge between networks, and a high-tech system to work with crypto exchange and crypto-salaries. A professional team that has already launched one of the top 5 bridges created EVODeFi.Pay that facilitates the process of exchanging cryptocurrency between sellers and buyers. EVODeFi.Pay is a product that performs fast crypto-transactions between vendors and customers. The process of using the service is extremely simple: a buyer chooses the cryptocurrency which he or she wants and pays for the purchase. EVODeFi.Pay converts one cryptocurrency into another and sends the payment to a seller in the crypto that has been chosen. Since many have refused to use BTC/ETH in favor of faster networks, EVODeFi.Pay can offer several popular networks, such as BSC, Fantom, Avax, Polygon, which already have a large number of users. In addition, the development team uses a powerful security system to protect transactions at all stages. Moreover, convenient localization and the ability to use the service on any device will greatly facilitate integration. About EVODeFi: EVODeFi is a cross-chain solution providing a set of crypto products including a bridge between networks, business tools to increase crypto payments, and a high-tech system to work with crypto exchange and crypto-salaries projects, available in a single system. EVODeFi develops the following services: Bridge, Pay, Exchange, Payroll and App. Using the latest technologies and great experience, the EVODeFi system works at the international level, providing its services in regions around the world, for example in the USA, Europe, and South America.

Read More

Events