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Analysis: RDeFi (Regulated DeFi) is inevitable, and the summer of DeFi will come back?

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In 2022, we will see the emergence of RDeFi, or "Regulated DeFi" (regulated DeFi).

Original author: Darius Moukhtarzade, analyst at digital asset bank Sygnum

Original compilation: Nanfeng, Unitimes

There is no doubt that NFT will receive the most attention in the encryption field in 2021.

While some market watchers foresaw a rise in its popularity and usage not so long ago, its The rapid popularity among native players surprised most of us.

The hype surrounding punk, ape and rock has even eclipsed the booming DeFi industry.

However, I expect DeFi to come back into the spotlight in 2022, experiencing a second "DeFi summer" like 2020.

There are two main reasons:

1) Yield opportunities may be affected by More pursuit, especially envisioned in a sideways or bear market.

2) and building a canonical version of DeFi, which I call RDeFi.

Attractive revenue opportunities

Since the "DeFi Summer" of 2020, Many new and innovative projects have emerged, while established projects have further developed their offerings.

One trend that we have seen in 2021, especially in the first half of the year, is different types of revenue generation.

Because DeFi offers very attractive yield opportunities, ranging from 3-5% for conservative products to 30-40% for more aggressive stablecoins , Depending on the investor's risk appetite.

Many crypto newcomers who entered the space during the recent bull run will start exploring DeFi.

For some, this will be the "traditional" path from Bitcoin to Ethereum to DeFi.

For others it will be NFTs to Ethereum and then DeFi.

No matter how you get into DeFi, the result is the same: DeFi adoption increases, which could lead to a DeFi2.0 summer.

Avoid high gas fees

Although the ETH2.0 upgrade plan will be carried out in the first half of this year , but I believe Ethereum still deals with very high network fees for most of the year.

This won’t stop DeFi adoption, but it will push investors to use more layer 2 scaling solutions.

Such as Arbitrum, Polygon or Optimism, and other smart contract platforms such as Polkadot, Solana, Avalanche or Terra.

I'm really excited about Polkadot's DeFi platform Acala, which recently became one of the first projects to receive a parachain slot on Polkadot.

Also, Solana, which gets a lot of NFT shares from Ethereum due to lower network fees, will be interesting.

Its high TPS and scalability allow the use of DeFi applications that are not possible with Ethereum.

The emergence of "RDeFi"

I believe that in 2022 we will see RDeFi (Regulated The emergence of DeFi).

This may sound contradictory to some, but I think this is the next evolution of DeFi.

I expect that, in addition to the DeFi we all know and love, there will be a parallel DeFi field, one that meets the requirements of traditional financial regulation Regulated packaging.

This RDeFi can only be accessed through the same "KYC" process used by traditional investment vehicles and must meet the same anti-money laundering standards.

We’ve already seen early examples of RDeFi projects in 2021, with lending protocols Aave and Compound both offering compliant versions of their platforms, AaveArc and Compound Treasury, respectively.

This trend is likely to continue, I expect other types of DeFi projects, such as DEX, will also provide a regulated version of the platform, see UniswapPro next year version I wouldn't be surprised.

I would also like to see more projects that are regulatory compliant from the outset, such as receiving regulatory approval from German regulator BaFin earlier this year as the first A regulated DEX operated Swarm Markets.

Furthermore, I expect large exchanges such as Coinbase or Kraken to provide their investors with access to DeFi applications through regulated gateways.

Since the use of centralized exchanges avoids the burden of self-custody and private key management, they can provide a DeFi platform without downloading a web wallet or directly communicating with dApp interaction.

A product like this will bring further adoption and liquidity to the space.

While some crypto experts will argue that DeFi applications with KYC requirements are against the spirit of decentralized finance, I prefer to define DeFi as a An owner-operator economic model rather than a service provided by a for-profit entity.

The conditions of access to services do not change the economic model. The products offered by RDefi develop a new customer base for these platforms, with which regulated financial institutions will not be able to interact.

Furthermore, regulation increases customer protection and holds platforms accountable, which may also be preferred by those who are not restricted by regulated services.

I believe this development will help the field mature. RDeFi will play a key role in further increasing the liquidity of DeFi platforms, in fact it is the only way for regulated institutions to enter the space.

Written at the end

While I expect NFTs to continue to attract interest, Especially considering NFT's connection to the metaverse and blockchain-based games, but I believe the DeFi space will also regain some attention. DeFi has matured in the past year, and while DeFi is still a very innovative field, the field has continued to mature over the past year. High-yield opportunities will continue to attract investors, while RDeFi will take DeFi to another level, increasing adoption and liquidity.