Top 3 DeFi Trends in 2023 To Watch For Crypto Investors

With the changing trends and upgrading technology blockchain based projects are booming swiftly and gaining popularity in the real world. The world’s superpower are embracing the Cryptocurrency, Metaverse DeFi, NFT, and play to earn gaming sector.

What is Defi?

Decentralized finance (DeFi) works on a distributed ledger that works on a core principle of removing the mediator to build a decentralized ecosystem where people do not rely on a third part and can carry on with the transaction without paying service charges to the third party. DeFi ensures transparency as all transactions are recorded on public leader that is immutable.

DeFi comes with a handfull of advantages of ensuring high level security due to the the distributed ledger technology that maintains the transparency, the listed advantages fueled the deviation towards DeFi. 

CeFi VS DeFi 

In centralised finance (CeFi) the third party completely takes away the tranparency, the conventional trading activities such as marginal trading, lending and borrowing, payments derivatives trading are easily performed with CeFi and DeFi as well. CeFi requires KYC to fully operating all the services and on the other hand DeFi does not requires KYC to access the services instead it requires a unique identification number simply known as key. 

Skyrocketing Adoption of DeFi

DeFi comes with innumerable benefits like it does not  require personal data of the user to leverage the banking services, instead it provide a distinct key to users that is required to avail the financial services. This ensure the full control to the users as they are responsible for their security. 

DeFi Trends in 2023 to Watch

Resurgence of Decentralized Exchanges

Decentralized applications (dApps) does not maintain control over users money. As a result dApps are gaining huge popularity as it does not requires permissions, that are often open, and non-custodian. 

Skecticsm has covered the market of centralised exchanges as in the past few years we got to witness the collapse of centralised excange’s giant like Terra luna, Sam Bankman-Fried’s FTX and several other entities. 

Events like these fueled the deviation towards Decentralised exchange (DEX). As it provided users with complete control over their funds 

Blockchain-Based Assets from the Real World

Real World Assets (RWA)

The blog of Vitalik Buterin expresses his enthusiasm about RWAs and claims that “the principle underpinning stablecoins can be applied to other real-world assets,” such as DAO-governed stablecoins backed by real-world assets.

Development of CBDCs

Transitioning of fiat currency into Digital Currency, known as central bank digital currencies(CBDC).

Emerging Adoption of L2 and Zero Knowledge Technology

The high gas fees and low transaction speed 

Zero-knowledge proof (ZKP) is a way of authentication using cryptography to prove that one party possesses knowledge without revealing underlying information. It paved the way to corroborate the transaction’s confidentiality and protect financial Privacy through a shielded address.