2023 DeFi Trends to Follow

The world of cryptocurrency is rapidly evolving with the introduction of innovative blockchain projects such as NFTs, GameFi, Metaverses, and Decentralized Finance (DeFi). In this article, we will delve into the concept of DeFi and the top DeFi trends for 2023.

DeFi is a fintech solution that leverages a decentralized ledger to enable financial transactions without the need for centralized financial institutions such as banks. The transactions are recorded on a public and immutable ledger, eliminating the need to pay institutions a fee for each transaction. DeFi offers greater convenience, better integration, and increased transparency to users, who only need a phone and internet connection to access the platform.

The DeFi industry is expected to grow significantly, with projections estimating a growth from $11.78 billion in 2021 to $231.19 billion by 2030, a nearly 20-fold increase. Here are some of the DeFi trends to look out for in 2023.

The Revival of Decentralized Exchanges (DEXs)

Decentralized exchanges (DEXs) are a key aspect of DeFi and the main platform for trading cryptocurrencies. In contrast to centralized exchanges (CEXs), DEXs are transparent, autonomous, and non-custodial, allowing users full control over their funds. After a number of CEXs, including FTX, shut down in 2022, there has been a resurgence of interest in DEXs. Despite being more complicated for the average user, as they must secure their private keys, DEXs offer users greater security and control over their funds.

In 2023, we can expect to see further advancements in DEXs, such as Uniswap v4, which could launch with new features that could change the DEX space.

Decentralized Derivatives and Options

The revival of DEXs has increased interest in blockchain derivatives. Derivatives, such as perpetual contracts and options contracts, offer users significant leverage and have a notional value of over $1 trillion according to CoinGecko. With users becoming increasingly wary of CEXs, it is likely that some of this volume will migrate to on-chain derivatives DEXs. In 2023, options trading is expected to gain more traction with the rise of "OpFi," or "DeFi infrastructure powered by options."

Real-World Assets on the Blockchain

Tokenizing real-world assets (RWA) onto the blockchain has the potential to unlock significant liquidity and utility that would otherwise be impossible or difficult to achieve in the real world. Although tokenizing physical assets has not yet seen widespread success, carbon offsets are a relatively new type of asset that could be an exception to this rule.

In conclusion, 2023 promises to be another exciting year for the DeFi industry, with the revival of DEXs, the rise of decentralized derivatives and options, and the migration of real-world assets onto the blockchain. Stay informed and take advantage of the opportunities presented by these trends to grow your crypto portfolio.

March 9, 2023

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