DeFi Market Overview
Last updated
Last updated
As blockchain-cryptocurrency innovators are looking for decentralized, censorship-resistant ways of fundraising, relatively new Initial DeFi Offering (IDO) and Initial Liquidity Offering (ILO) methods emerged as efficient answers.. Furthermore, given the rise of Automated Market Makers (AMMs), a token’s liquidity has become a crucial determinant of its market price. Although the market is becoming more competitive and value-oriented, early-stage innovators are facing unprecedented challenges due to these fast-paced changes. Prior to listing, they now have to seek liquidity investments for their tokens. In turn, however, the scenario presents new opportunities for early-stage investors, facilitating higher and more secure returns through liquidity mining. The growth of the decentralized finance (DeFi) ecosystem in the last two years has been explosive, despite DeFi being an almost unknown concept in 2019. According to data from DeFi Pulse, while it took over two years for DeFi deposits to reach $1B in Total Locked Value (TVL) until Q1 2020, it took just a year for DeFi TVL to spike from $1B to almost $52B. In November 2021, DeFi TVL reached more than $100B as the historical peak. As of February 2022, the gross DeFi TVL sits around $75B.
The continued launches of innovative products with attractive returns in the DeFi ecosystem are expected to sustain DeFi’s exponential rise, with more and more market players observing with increasing clarity that the DeFi market, dubbed as the “Internet of Money”, is poised at the brink of an unprecedented bull run. This is considered to be the tip of the iceberg of Web3.0 as we are just beginning to see a complete paradigm shift in our technological world and understanding.
Innovative fundraising methods such as IDO also promoted the prosperity of the early -cryptocurrency issuance market. However, as a high-growth market at early stages, fundamental valuation becomes hard at early fundraising stages for the masses due to high volatility, low understanding of new technologies and their implied value, and incentive for fraud in the lack of regulatory authorities. Such traits, amplified by the convenience of crypto start-up methods, adds to the natural decline of momentum. With the decline of market enthusiasm, newly issued crypto assets will inevitably face the gradual decline of liquidity, and the vitality of token value will be difficult to sustain. At the same time, how to complete the initial establishment and effective incentive of DAO is also a challenge for blockchain-cryptocurrency startups.
TrustFi Network is a decentralized BaaS solution for the DeFi market based on the multichain environment (Binance Smart Chain, Ethereum, and Polkadot etc.), focusing on early crypto assets issuance, liquidity management, community activities and DAO governance. TrustFi designs decentralized DeFi market BaaS tech and DAO incentive solutions, including IDO General Protocol, Decentralized Staking Contract and Automated Farm Pools (AFP) Algorithm, which will provide complete support for blockchain-cryptocurrency startups and help unlock the potential of DeFi for our investors and the established clients. Activity on TrustFi Network is governed by $TFI, the network’s native token.
