History of tracking cryptocurrency (5): DEFI Revolution during the Global Crisis

Author: Derek Andersen, Cointelegraph; Compilation: Deng Tong, Bit Chain Vision World

The popularity that broke out in early 2020 caused serious damage to human life and the world economy.The cryptocurrency world was also severely damaged, and the cryptocurrency market plummeted in March of that year.Bitcoin lost 52% of the value within a day, and Ethereum lost 43%, and the decentralized financial field (DEFI) plummeted.

The resulting blockade has a slow but far -reaching impact on cryptocurrencies.As most people go home, the time staying in front of the screen has increased steadily, and people’s interest in cryptocurrencies and the market value of cryptocurrencies have also soared.Soon, emerging technology was developed and implemented at unprecedented speed.

DEFI Big Blast

In 2017, with the development of smart contracts on the Ethereum blockchain, Defi took the first step.MakerDao and Compound were early market leaders.In June 2020, Compound introduced liquidity mining, also known as liquidity mining, which is a arbitrage method that obtains the highest interest, costs and rewards by transferring crypto assets.This is a common approach now.

Compound is also a pioneer of decentralization.Comp is also the first governance tokens, and users can directly participate in the management of decentralized autonomous organizations (DAO).By the end of the year, the decentralization of many DAOs went smoothly.

DAO is an organization under the jurisdiction of mandatory digital rules and has no hierarchical management.It is similar to Bitcoin, trying to get rid of all middlemen in the transaction.

arriveIn September 2020, DEFI pledge has jumped from $ 700 million to $ 9 billion at the beginning of the year.At that time, Bloomberg wrote:

“An cryptocurrency enthusiasts called decentralized finance helped digital currency as the best assets so far this year.”

The decentralized exchange (DEX) also played an important role.These existed in 2020. OasisDex was launched in 2016. Uniswap appeared in 2018EssenceDEX allows users to point -to -point transaction encryption assets, that is, no intermediary.Conversely, decentralized exchanges have spawned automatic city merchants using liquidity mining.

Uniswap Logo, Source: Uniswap

All these activities are eventually similar to bubbles, or “price explosions”,The encrypted world calls it 2020 DEFI summer.

The third Bitcoin is halved

The third decrease of Bitcoin occurred on May 11, 2020, just before the summer of Defi.Music means that every 210,000 BTCs are mining, mining rewards will be reduced by 50%.In 2020, the reward for mining a block was reduced to 6.25 BTC.

BTC/USD 1 month historical transaction chart.Source: tradingView

The purpose of halving is to prevent inflation by slowing down the mining speed and increased demand by slowing production.During the third halving period, the price of BTC was about $ 8,800.It rose slightly in July and August 2020, and began to rise significantly in October. By April 2021, it rose to $ 63,000.

2021: NFT Year of NFT

Can’t replace the tokens (NFT) is a unique digital item on the blockchain.Their history can be traced back to a few years ago, but the market did not really take off until 2021.They are the core of today’s real -world asset -oriented boom, and have been used for ticketing, permits, games, authentication, music, and many other uses.Their earliest use was games, collectibles and artworks.

Cryptokitties, Source: Cryptokitties

CryptokittiesIt is an early outlook for future things.The game was developed by Dapper Labs and was launched in 2017 to collect, trades and reproduce digital virtual cats with NFT.Cointelegraph later pointed out: “This digital cat breeding blockchain game caused considerable congestion on the Ethereum blockchain and reached its peak in 2020.”CryptopunksThe series of collectibles was also launched in 2017.

Bored Ape Yacht ClubThe series was launched in April 2021.Creator Yuga Labs sold all 10,000 from the end of the month, raised $ 3 billion.Subsequently, the company launched a lower cost Mutant Ape Yacht Club in August 2021 and is still being cast.

Examples of Bored Ape Yacht Club and Mutant Ape Yacht Club NFT.Source: Bayc

In 2017, NFT users were about 120,000.In 2020, users increased to 1 million, increased to 3.5 million in 2021, and increased to 9.9 million in 2022.From 2019 to 2021, NFT revenue increased by nearly 40,000%, But declined sharply in 2022.The OpenSea market established in 2017 accounted for 87% of the NFT market in early 2022, but the transaction volume of this year fell by 99%.anyway,NFT’s revenue continues to grow, and it is expected to reach $ 2.4 billion by 2024.