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Kerman Kohli, the founder of DeFi Weekly, released a review of DeFi in 2020 and forecasts for 2021. Rhythm organizes Kerman’s forecasts for 2021 as follows:
If you use one sentence to summarize DeFi in 2020, it will lay the foundation for the landing in 2021. We started from the early DeFi with the same prototypes as toys, and will soon be responsible for managing trillions of dollars in transaction volume and hundreds of billions of dollars in on-chain assets.
Based on the current situation, Kerman has the following predictions for what may happen in the next few months:
1. Every project may try to do anything in an attempt to expand the amount of funds for the project itself. But the bubble caused by over-expansion is likely to burst due to lack of focus.
2. For high-quality projects, token rewards will not be so easy to obtain.
3. The next bear market will be what people call “DeFi’s Death”.
4. Stable coins will become a surprisingly large market. The emergence of many participants will support the emergence of swap contracts, leverage and more derivatives in this area.
5. Leverage tools in this cycle will be more deadly than the previous cycle. Given the limitations of Ethereum, we may see more Black Thursday events.
6. The valuation of high-quality DeFi projects will rise to US$10 billion to US$25 billion. Due to the high valuation at the time of launch, the seed round of DeFi projects will become more and more expensive.
7. In view of the high yield provided by DeFi and the low capital cost in the real world, TradeFi will become more and more active in this field.
8. At the peak of this bull market, DeFi will be touted as a solution to “world problems.” When this slogan becomes more and more loud, you may need to consider reducing positions at this time.
9. Because every asset will be encapsulated in some form, the native asset expression in the user’s wallet will become less and less common. The agreement dedicated to this field is worthy of attention.
10. The design space for new DeFi applications is still completely open, but more creativity is needed because the basic tools of DeFi have been basically completed. Therefore, Kerman predicts that he will see a variety of new financial instruments that were impossible before.