Current Status and Future Development Trends of the Decentralized Finance Industry

Alex had an in-depth discussion with dForce founder Minda about the current state and future development of Decentralized Finance.

The Essence and Value of Decentralized Finance

The public believes that DeFi is an extended version of Bitcoin, moving various services from traditional finance to a decentralized blockchain. The core value of DeFi lies in:

1. Restore finance to an information network, eliminating barriers of national borders and regulation.
2. Significantly improved capital efficiency, with transaction and settlement speeds far exceeding traditional finance.

Decentralized Finance Industry Status

1. The infrastructure has been highly standardized, mainly including three categories: stablecoins, lending, and AMM trading.
2. The industry shows a trend of both commoditization and concentration.
3. Evolving from pure decentralization to a De-CeFi hybrid model
4. Some profitable applications that do not rely on tokens have emerged.

Future Development Trends

1. Decentralized Finance will form a closer connection with traditional financial institutions, and a "pre-IPO followed by DeFi" model may emerge.
2. Traditional financial institutions may enter the DeFi space by issuing Layer 2.
3. With the improvement of infrastructure performance, more high-frequency trading applications will emerge.
4. Real returns will become an important trend, such as national bonds on the blockchain, etc.

The Moat of DeFi Projects

1. Continuous innovation capability
2. Powerful brand effect
3. Security

Investment Advice

1. For ordinary investors, DeFi projects should account for more than 50% of the allocation to altcoins.
2. About 30% of the investment portfolio should be reserved for projects outside of mainstream coins.

Overall, the DeFi industry is developing towards a more pragmatic and hybrid direction, with the expectation of closer ties to traditional finance in the future. With the improvement of infrastructure, more innovative applications will emerge.