❄️ The State of DeFi in 2022
Despite the recent decline in the prices of many cryptocurrencies, there are still developments in the DeFi space daily. There is currently about $100B total value locked (TLV) into DeFi protocols. Right now, the focus is on developing Ethereum L1 and L2 scaling solutions, such as Uniswap, a DeFi protocol used to exchange cryptocurrencies.
Poly Network, Cream Finance, and Compound were some of the victims of an attack caused by code exploits and rug pull that caused $2B to be drained from DeFi projects. Curve, an exchange liquidity pool on Ethereum, tops the ranking of TLV in DeFi projects with about $8B.
Regarding L2 scaling solutions, some of the most promising developments have been coming from this side of development. These solutions enable a more efficient transfer of funds from the main Ethereum chain. An example of that is the Arbirtrum One Rollup Network, which can process transactions in an efficient and scalable way while recording transactions on the main Ethereum blockchain.
A highly anticipated development is The Merge which will transition the Ethereum network to Proof-of-Stake. There are also expectations of increased regulations with DeFi as Stablecoins, Private coins, and DeFi products are the strongest candidates that could find themselves in the line of fire for regulators.
No matter what happens, DeFi will continue to develop at a rapid pace throughout 2022 and beyond.
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David Z Morris
Brian Quarmby
