There are various metrics in determining a DeFi platform’s prestige. But the most reliable metric would likely be TVL or total value locked as it tells us how much money people are actually placing on these systems. The top DeFi platforms include Uniswap, Maker, WBTC, Compound, Aave, Curve Finance, Synthetic, Harvest Finance, and Yearn Finance.
More and more people are entering the DeFi space every day.
However, if we’re talking about DeFi becoming on par with traditional finance, it seems that it has a long way to go. Furthermore, it’s hard to say when it can actually breach a billion users since DeFi today has its share of challenges including scalability. Fortunately, Ethereum 2.0, which is expected to be fully functional sometime in the next 2–3 years, could alleviate most of the challenges.
At present, two of the biggest hurdles to DeFi are speed and scalability. This is because the vast majority of DeFi platforms run on Ethereum, which has a transaction speed of approximately 15 tps (transactions per second) onlyt. But with the launch of Ethereum 2.0, it will slowly scale to speeds of up 100,000 tps in the next couple of years.
The innovation happening within DeFi has been nothing short of astounding. We’ve come along way since the days of EtherDelta. With that being said, there are a few things that could be improved to make the space better. Fortunately, developers in the space are working 24/7 to overcome these challenges.
The vast majority of DeFi platforms are built on top of Ethereum, a specialized blockchain for running smart contracts and decentralized applications. This means that they are fully compatible with other DeFi-based cryptocurrencies, allowing token swaps. For instance, Uniswap allows you to trade various Ethereum-based DeFi tokens against each other.
DeFi, which stands for decentralized finance, is the general term for financial applications running on blockchain protocols. Some of the services it provides include lending, borrowing, trading, investing, which are not always available to everybody in the traditional finance sector. Therefore, we need DeFi since it gives everyone in the world open access to financial products that would normally have been out of reach for them