Easy-to-use DeFi protocols will become the new guardians of crypto
It has arguably never been easier to participate in the crypto ecosystem. After centralized exchange powerhouse Coinbase recently began allowing its users to deposit a portion of their paychecks into the exchange as crypto, more and more people are starting to realize the potential of the industry and to participate in this ever-growing ecosystem.
But, cryptography is commonly perceived as inherently complex or lacking the proper interfaces, and whether that’s true or false has been the perception for some time. For some people, the principle of digital currencies will always seem far too complicated. More recently, however, there has been an emergence of easier routes into the crypto space for those who want to learn more.
It is important to establish why people should consider getting into crypto. As with the rest of the world’s industries, digitalization is revolutionizing every facet of our lives. Being able to figure it out early will help more people understand the benefits of this technology in the financial world and get used to a future that will likely feature lots of digital currencies.
Related: SEO Frenzy! Coinbase adds nearly 100 crypto assets for trading in 2021
For this reason, making entry points into crypto as easily accessible as possible should be an effort worth considering by all developers in the space. But that doesn’t take away from the fact that the industry has come a long way and continues to prove why decentralization is the key to a successful financial future.
What are the crypto entry points currently?
Today’s entry points into the digital currency industry are certainly easier to find than they were just a year ago. However, much more needs to be done to ensure that the existing pathways in the space for beginners in crypto are maintained, continually improved, and promoted to the right people.
There are tools that not only help you learn about crypto and buy it, but also apps that put those assets to work. Yield farming is a relatively easy entry point into crypto: a form of high-interest returns on your deposits that were once seen as a complex feature of decentralized finance (DeFi), but have matured into a commodity. that almost anyone can understand and quickly start earning on their wallet. By simply purchasing tokens, you can place them in a cash or loan pool and let them accumulate value.
Additionally, we now see a more recently renamed entry point with non-fungible tokens (NFTs). NFTs are “one-of-a-kind” assets in the digital world that can be bought and sold like any other good, but may have no tangible form of their own. The space has seen meteoric exponential growth in 2021 with the first half of the year reaching $2.5 billion in sales volume for NFTs alone.
Basically, NFTs are new and original to the general public. Since they have only recently gained mainstream attention, they have a lot of influence, which increases their desirability and demand. The world of “art” has seen explosive growth in the NFT sector, as digital artists can reach millions of people/customers cheaply and instantly.
Related: 2021 ends with a question: are NFTs here to stay?
Another reason for the growing popularity of NFTs is the sense of status they carry. Some NFTs themselves have developed their own cult-like communities such as Crypto Punks and Bored Apes and by owning one you are seen as a member of their very exclusive club, not to mention very wealthy potential. We are seeing some NFT artwork selling for huge prices, and this is just the start of a very young ecosystem.
What’s wrong with these existing entry points?
In order to increase the accessibility of crypto, projects need to be able to adapt as things like high gas prices push people away from the Ethereum network. Due to the nature of these exorbitant gas fees, this has driven many projects and users to other cheaper blockchains like Solana – which recently experienced an NFT boom with the launch of Solana Monkey Business, Degenerate Ape Academy and Meerkat Millionaires Country Club.
Efforts must be made to keep crypto accessible and accessibility issues, high gas fees, and complex UX prevent new users from reaching their full potential. But, more education is needed to help build the confidence of these new users to be able to use these products with conviction and not worry about losing the money they may have invested in digital currencies.
Related: DeFi picks up the pace as alternative blockchains and NFTs explode
There are noticeable advances underway in DeFi that are helping to create easier crypto access points, but the NFT space is still a long way off. Considering the extremely high prices of some of the most popular NFTs such as Bored Apes and Crypto Punks which have sold for hundreds of thousands of dollars, this is almost a chilling effect as those not into crypto wonder why heck people would pay that kind of money for a digital image that can be easily reproduced.
This also links back to the point about education and how NFTs can be useful when implemented appropriately and more people need to be aware of it. This will come from NFT projects maturing and demonstrating why these tokens can be valuable and useful in daily life instead of just being an original piece of internet art.
What future for DeFi projects and NFT projects?
In its early stages, cryptocurrencies and blockchain apps were basically proof of concept and not so much about usability. There was less media coverage, the prices of some currencies such as Bitcoin (BTC) and Ether (ETH) were still relatively low, and the focus was on developing these technologies into something viable. But, now, after the initial coin offering (ICO) boom of 2017, the DeFi summer of 2020, the rise of NFTs, and the price surge of BTC and ETH, more and more people want learn and get involved in this digital revolution. Whereas before there was no demand for easily understandable entry points into crypto, now we are at the forefront of the mainstream population who want to engage with digital assets.
Related: What future for crypto and blockchain in 2022? Expert Response Part 3
A cold hard fact of the digital finance industry is that due to the turbulence and unpredictability of the space, some DeFi projects and NFT projects will last and some will fail. It is important to show the usefulness of as many projects as possible to prolong their longevity and to arouse external interest by increasing the number of users, while underlining the risks.
Many NFTs in the space are immature or are simply an exploitation of the current hype and speculative atmosphere around digital art, leading many buyers to hold worthless digital images beyond their visual aesthetic. Digital assets still intimidate many people and it will take a coordinated education effort to help digital finance agnostics understand the true value proposition of digital assets. Existing entry points into crypto have a good base from which to start, but we also need more education and support systems to ensure as wide a reach as possible so that many people have the opportunity to engage in a space that could change their lives.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of TBEN.
Redemption, aka “Red”, is a community moderator of Harvest Finance, a DeFi hedge fund aggregator, offering high returns, low gas fees and automated strategies. Red is a sought-after yield farming expert whose ideas and opinions regularly appear in numerous international publications.
