DeFi-ning the DeFi; what does it have in store for 2023
Global regulators’ intervention in crypto markets seems to ask how decentralised finance (DeFi) trends will fare in 2023. For 2023, it’s believed that DeFi will play a role in traditional finance, along with developments around Web3.0-backed financial technology (fintech).
According to Grand View Research, a market research and consulting firm, global DeFi market is expected to clock a 46% compound annual growth rate (CAGR) for 2023-30. The firm further stated that DeFi’s adoption has expanded because of its ability to eliminate middlemen from financial procedures, as well as contributions from Esports and gaming sectors. “I believe decentralised derivatives and options are gaining traction as financial instruments. The integration of real-world assets on blockchain and adoption of Central Bank Digital Currencies (CBDCs) are also trends,” Alankar Saxena, co-founder and CTO, Mudrex, a crypto investing platform, told FE Blockchain.
From what it’s understood, 2023 DeFi trends will be based on relationship between decentralisation and regulatory mechanisms. As explained by Hedera, a proof-of-stake (PoS) public ledger, anticipated DeFi trends for 2023 are crypto bridges, funding blockchain gaming, growth of decentralised exchanges (DEXs) and automated market makers (AMMs), expansion of crypto exchanges, increase in governance token-based use cases, among others. Insights from other websites have also laid emphasis on liquid staked derivatives (LSDs), layer-2 smart contracts, and blockchain-backed real-world assets as other trends to look forward to in this year.
“We expect to see the rise of cross-chain DeFi solutions that enable transfer of assets and liquidity across blockchains. In 2023, we anticipate emergence of decentralised identity solutions and tokenisation of real-world assets,” Shrikant Bhalerao, founder and CEO, Seracle, a blockchain cloud company, highlighted.
Experts believe that 2023 will witness mainstream DeFi adoption through increase in corporate use cases. Reportedly, recent corporate examples of DeFi adoption include Meta’s creation of non-fungible token (NFT) use cases, Visa and Mastercard’s inculcation crypto methods, and Tesla’s Bitcoin investments. FLUID Finance, a crypto trading platform, mentioned importance of 2023 in giving DeFi-oriented regulatory transparency. It’s expected that global and national regulatory institutions will uphold the responsibility to develop regulations around security tokens and stablecoins.
Beyond 2023, suggestions have been laid around DeFi becoming a part of global DeFi landscape, through decentralised governance models and oracles. Medium.com’s, an online publishing platform, website has suggested that DeFi-development companies should allow DeFi’s growth based on Web3.0 prospects. “In the coming year, with Bitcoin halving, emerging utility aspects due to ordinals, among others, we expect the market to recover some of the steam. Besides, regulations should be overdue by next year so that can give DeFi community reasons to be agile and become malleable with change in circumstances,” Rajagopal Menon, vice-president, WazirX, a cryptocurrency exchange, concluded.
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