DeFi 2.0: A beginner's guide to the second generation of DeFi protocols
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Loading... - Valentina Alvarez
- 06 Feb 2023
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Decentralized finance 2.0
One of the most influential and successful waves of blockchain-based innovation has been decentralized finance or DeFi. DeFi refers to a broad spectrum of decentralized applications that disintermediate traditional financial services and unlock whole new economic primitives and is powered by blockchains with built-in smart contract capabilities and secure oracle networks like Chainlink.
DeFi protocols are continually evolving and iterating upon proven models of financial-based agreements, fueled by their inherent advantages of permissionless composability and open-source development culture. The DeFi ecosystem advances at breakneck speed—over the last few months, a surge in liquidity-focused decentralized finance projects has ushered in a new generation of DeFi innovation known as DeFi 2.0. So, is DeFi 2.0 a thing yet?
DeFi 2.0 is a new phrase in the blockchain world that refers to a subset of DeFi protocols built on prior DeFi breakthroughs like yield farming, lending and other things. Many on-chain systems with native tokens experience liquidity constraints, which is a crucial focus of notable DeFi 2.0 implementations.
Before going into the usefulness and new financial paradigms the DeFi 2.0 ecosystem brings, this article explores previous breakthroughs that set the stage for the DeFi evolution, DeFi 2.0 movement and discusses the liquidity problem that DeFi 2.0 protocols seek to tackle. Read More…
