DeFi is not the yield, DeFi is the infrastructure

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DeFi is not the yield, DeFi is the infrastructure

Decentralized Finance is growing popular amongst crypto investors and the world at large but majority of the growth is tailored towards yield farming. Just as similar terminologies in the crypto ecosystem like the Metaverse which a handful of people including the Chinese and Meta(Facebook) tend to think such a business and economic environment can be built on centralized servers rather than a distributed data management system like the blockchain, more specifically public and incentivized blockchains.

Web3 is also one of the terms being misused or interpreted quite often. Arts galleries have sadly become what the majority see as "Web3" where this is only a term that describes an internet majority of the application built on it following shared governing to improve its efficiency and boost rapid growth.

That said, yield farming is generally about earning an interest for locking up tokens either as a form of liquidity provision or as a form of contributing to the value retention of an ecosystem and often also earning governance influence and yield as the crypto assets stay locked. DeFi, at a large scale is being looked at in the eyes of yield farming, or liquidity mining, literally.

This is why it is seen as a money grab opportunity by many, including the biggest investors or should I say the most long-term thinkers in the space? If you pay close attention to how protocols attract and lose value easily, especially when alternatives are deployed with fresh token yields with APRs sky climbing, you'd realize it's all yield chase at the end of the day. Nobody cares about the infrastructure which everyone should actually, and here's where I'd say people who have gotten rekt by poorly built DeFi protocols put it upon themselves. Being everywhere especially when dealing with crypto is not always advisable, this is increased exposure and while it also increases earning opportunities it is always a very near death movement as the years have proven.

When you tell someone there's a new DeFi project, they immediately feel there is some new yields to farm, but that isn't always the case as there could be literally anything including:

  • Lending and Borrowing Protocols

  • Decentralized Storage Markets

  • Decentralized Payments Networks

And many more that I cannot think of right now. All of these things are considered DeFi provided the underlying infrastructure allows decentralization to be its form of governance. Finance there represents the transfer of value between the network participants which could be for investments purposes or anything else. When people talk about DeFi, all they think of is "yield" but when we say DeFi is the biggest piece of the cryptocurrency ecosystem, we simply aren't referring to yield farming at its very basics.

We are looking at a whole new finance, business and economic environment built on decentralized infrastructures, allowing it to enjoy growth influenced by the voice of people with common goals - which is often to bring value to the ecosystem.

Thank you and please leave a comment, your thoughts matter to me

Posted Using LeoFinance Beta



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