As the crypto world recovers from NFT-mania, the decentralized finance (DeFi) space is gaining traction once more, ready to re-occupy its positions as prince of the crypto-space. BeInCrypto explores 5 notable invents that have been pivotal for the DeFi space.
1. Uniswap Launch
Launched in 2018, Uniswap (UNI) is a decentralized exchange (DEX). It’s built on the Ethereum (ETH) network, the world’s second-largest cryptocurrency project by market capitalization. As a result, Uniswap is one of the most prominent DeFi projects.
It aims to offer cryptocurrency users a means to exchange their holdings without the need for a centralized party to administer transactions. Uniswap completely disrupted the cryptocurrency exchange space, traditionally controlled by centralized exchanges (CEXs) such as Binance.
In fact, in February this year, Uniswap became the first decentralized exchange to process over $100 billion worth of transactions, whilst also leading development in the DEX space.
Its native token, UNI, also reflects the impact the leading DEX has had on the DeFi space, with a market capitalization of just under $15.5 billion at press time.
This makes it the ninth most valuable cryptocurrency project in the market.
2. SushiSwap Fork
Uniswap spurred on a wave of development in the DEX space, leading that space to be valued in the tens of billions of dollars.
One of the most notable (and possibly the most direct) developments triggered by Uniswap is SushiSwap (SUSHI), a competing project in the DEX world. In fact, SushiSwap is a fork of Uniswap, led by a community that opposed the latter’s engagement with the centralized venture capitalist world.
SushiSwap became a formidable competitor to its parent chain after initially attracting liquidity away from Uniswap. It then developed several products and relationships that cemented its status as a worthy operator in the DeFi space.
Today, SUSHI is the fifth largest DEX by market share, with the platform’s market capitalization sitting at $2.1 billion.
3. Yearn.Finance Fair Launch
Whilst DEXs run the DeFi economy, it’s products that characterize the DeFi space. And no other platform can boast the clout of Andre Cronje’s Yearn Finance (YFI).
Yearn Finance developed an easy way for budding “DeFi-ers” to interact with DeFi products. But it also introduced the concept of “fair launches” to the space.
At the Token Generation Event (TGE), all YFI tokens were made available to anybody who participated. None of these are reserved for developers or early investors.
4. Smart Contracts for DeFi
Smart contracts drive most DeFi applications and platforms. Most of them sit on the Ethereum blockchain.
Indeed, without smart contracts, there would be no DeFi at all. However, and possibly contrary to popular belief, smart contracts pre-date Ethereum by nearly two decades.
In 1996, the legendary Nick Szabo proposed smart contracts to execute a pre-defined set of instructions.
In 2012 Vitalik Buterin applied the concept to Bitcoin’s blockchain, creating Ethereum.
5. Bitcoin’s Genesis Block
And finally, where would the entire space be without Bitcoin itself. Whilst many look to the “Summer of DeFi” in 2020 for the DeFi space’s genesis, in reality, Bitcoin is the original DeFi product.
In the now-infamous Bitcoin whitepaper, Satoshi Nakamoto wrote that Bitcoin’s blockchain was:
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
Accordingly, Bitcoin was bid as an alternative and decentralized payments service, a service that is key to the finance industry. Today, however, Bitcoin has become a store of value rarely used for its decentralized payment capabilities.
And sitting at $58,416.81 at press time, it is likely to stay that way!