The DeFi world, as well as other login ciphers, is still in anxiety and fear. The encryption winter in 2022 continues, and the market prospect is uncertain. Because we haven't seen the bottom of the recent sales market, some investors even doubted whether DeFi would decline completely when it arrived.

However, there are some encouraging data about the health and application of the most famous DeFi ecosystem. The winners will also continue to participate in the next large and medium-sized encryption gathering. They have added great expectations for the future of decentralized finance to crypto investors, real estate developers and entrepreneurs.

Like the price of Bitcoin, the price of other cryptocurrencies in the market is the same. Therefore, the decline in the price of all key DeFi tokens in 2022 is more to correct the BTC foam at the end of 2021. The cold price of the last year does not mean that there is no future for decentralized finance.

Although the transaction cryptocurrency price of DeFi blockchain is significantly discounted in 2022, the modules they operate are very powerful. As time goes by, they can only become stronger and will carry out better efficacy updates, such as improving reliability and thorough personal privacy, while providing liquid keys and zero knowledge proof.

DeFi's long-term bear cow example

To sum up, there are five reasons for the future development of decentralized finance, and there are two problems for bullish development.

The increase was due to:

1) The dilemma of centralized financing in 2022 has brought strong reasons for DeFi.
2) The most important DeFi login password has strong basic index value.
3) Technology and security are growing rapidly.
4) The incumbents of the company successfully integrated DeFi.
5) Investors have invested DeFi coins closely around the sea area project.

Bullish due to:

1) The price of DeFi and the sharp decline on some platforms are still true. Investors are worried, and many people are still worried. With the improvement of stability and credibility, winning trust will be a hard process.
2) Like many industries of cryptocurrency, the decentralized financial industry still has the risk factors of controlling the investment and business operation mode of WeChat and DeFi.

Let's dive into the water!

Bear: Disperse the joy in finance

Last year, the total market value of the decentralized financial industry and other industries has been quietly reduced. This is an understandable reason for holding a negative attitude towards DeFi's cryptocurrency for a short time. Especially when there are no performance indicators indicating that the financial markets such as ETH, BNB, Uniswap, Polkadot and Solana will stop falling.

In 2022, ETH,TVL (total lock value) in DeFi contract decreased by 76%. Gradually from 2022, in January, the total amount of all cryptocurrencies was US $95 billion. This cryptocurrency was positioned in the decentralized financial application software for pledge loans, loans or pledges. By this year, it has dropped to about $23 billion.

Naturally, this number is calculated by using the investment real estate or fair value method, taking full account of the average price of cryptocurrency in the cryptocurrency liquidity swap market when the precise measurement date of TVL is confirmed.

In 2022, the price of cryptocurrency and the market of Bitcoin plummeted together. Therefore, the massive and continuous decline of TVL is only a problem that the total market value of BTC and Ethereum has slipped into the field of buyers. This is not as bad as assets escaping from the Ethereum platform - many people take their locked cryptocurrency when the contract expires, and then take him away.

Xiong: Control Weixie

Local regulators, especially in the United States, have negotiated with all cryptocurrency sectors, and so has DeFi. After many protocols, wireless bridges and even irreplaceable dynamic password (NFT) service platforms have been used, causing tens of millions of people to be stolen or damaged, such things become more serious.

A landmark case is under way, although it is not in the United States, but against Alexey Pertsev, a real estate developer with cash in sandstorm. The Spanish government can extend its term of imprisonment in the near future. He will be in prison until February 20, 2023.

It seems that all encrypted cells will defend developers. Many people think that Tornado Cash is only a personal privacy service platform, and developers should not choose to use it for some people.

In addition, the increasingly prominent means that regulators around the world have focused on the new decentralized financial industry. The Securities and Exchange Commission strongly criticized many elite teams for selling unregistered securities, and the crackdown seems to have just begun.

Bullying: CeFi Crash Highlights DeFi Advantages

One reason for the negative attitude towards decentralized finance is that they are seriously worried about the security standards against hackers. In 2022, Defi application suffered more serious losses from hackers.

If there is no intermediate supervision desk, no accounting department can adjust to solve the problem of your account. Because DeFi is a code that is a legal area, everything that can be achieved according to the code is written according to the code - network hackers like decentralized financial applications and users.

In addition, this has created a natural posture in the fierce network information security industry, bringing high-quality services to some channels that have not been invaded by other important hackers or frustrated by technology.

Even though DeFi is a tough experimental field of distributed system encryption and Internet technology with great tension, after the centralized equity financing was deeply inconvenient in the past year, DeFi in 2023 may look good.

let me put it another way:

The FTX trading center used to be the third largest crypto trading center in the world. It crashed and was damaged together with FTT tokens and Alameda Research trading units.

Voyager Digital is also in it. FTX paid $200 million to its qflp before its own collapse.

This is only a part of the despair of centralized equity financing in 2022, including Cersius and CEL tokens ($4.7 billion bankruptcy problem), Sanjian Assets ($10 billion asset management scale and $700 million breach of contract), and BlockFi's bankruptcy (debt "between $1 billion and $10 billion").

This also creates a lot of requirements for future development. This development trend can resist the energy of people's overcapacity, and maintain a reasonable solution for improving, stable and independent operation in the blockchain ecosystem.

Bullish: The great foundation of DeFi encryption service platform

The business operation mode of the DeFi market in the cryptocurrency platform is basically effective and profitable. It has brought a vast public space for the research and development of web3 technology and application software, which is also a new frontier of big data. After the issuance and communication, Internet technology is in its financial development process.

From 2019 to the second quarter of 2022, the number of DeFi users (inferred from wallet addresses) continued to grow.

This is a very healthy use. Today, the total number of new wallet addresses created for DeFi applications has slowed down in the second half of 2022, but this is due to the encryption winter. Although this time is not over, it will eventually be unfrozen, as in the previous encryption winter.

According to DappRadar's data, in the middle and late November, the total amount of DeFi blockchain smart contracts was US $40 billion, and the cryptocurrency was damaged by the Alameda FTX transaction center crisis. Every time the price of cryptocurrency rises, this number will rise along with the price of cryptocurrency. This is what investors who park their money there hope for.

Bullying: Better security and privacy

Another main reason for looking forward to the future development of DeFi is its product quality and rapid improvement to lead the most basic target group of such products to its market positioning.

Take Uniswap as an example, this decentralized trading center has maintained 50% of the DEX trading volume in the past year. This is a continuous work,Often work in the same way,24/7, a vending machine for encrypted financial services.

Its smooth operation and its prevention of all hackers' invasion or scandal, thus maintaining stability in this turbulent encryption winter. The independent, distributed system and immutable solution of the agreement can be deployed from the Ethernet ecosystem, which has won praise for DEX and the development team, and is called one of the most powerful well-known brands in the cryptocurrency industry.

In addition, the goods of DeFi cryptocurrency are only developing at a high speed. All elite teams have been scrambling to develop and design new solutions to compete for customers, market share and assets. Commodities are improving at a surprising rate.

Some of the most advanced development trends of encryption technology have rich application examples in the DeFi industry, including the application of secure multi-party computing or "liquidity" public key to achieve better reliability and personal privacy, and the completion of a large number of zero-knowledge proofs at the level of encryption verification, authorization and accounting.

DeFi will also achieve great production and manufacturing results in the next two years at the second level of expansion and interoperability. With the coming of the new year, Lido Finance has surpassed MakerDAO in TVL by means of the solution of liquid ether pledge loan, and has seen the necessity of this development trend.

Bully: DeFi integrated company incumbents

However, another good reason for looking forward to DeFi is the number of enterprises that have integrated DeFi into the product and system for customers.

For example, MakerDAO cooperates with banks to provide decentralized financial loans guaranteed by RWA (real world property) in digital currency. When MakerDAO announced this news, it was also the first time in business history that "the United States controlled the participation of commercial loans between financial institutions and decentralized digital currencies"

The blockchain smart contract in the cryptographically secure distributed network has a unique attraction for the existing financial field. The test cases include correct insurance claim settlement, fully transparent financial audit, immediate reduction and liquidation, multi-purpose identification of new financial products, accurate contracts and simplified KYC compliance, which are more preferred by customers than the methods used in the previous work under the control of financial technology.

Bully: investors who care about decentralized finance

Investors are also waiting for the development of cryptocurrency, which is prepared in advance to increase the power of the decentralized financial ecosystem, to be equivalent to many capital inflows. When such things happen, investors of such tokens and loans will pay attention to the market activity of DeFi cryptocurrency at the first layer of its core.