Raze Network: Why DeFi Cannot Be Wrong
You know what people say.
Electorate votes with paper and pen. Market votes with money and that is why the market always wins.
Decentralized finance (DeFi), as the blockchain-native financial service, has been witnessing an irruption of market interest and capital since March of 2020 with TVL (Total Value Locked) growing more than 30 times.
As Ethereum gets ready to test its ATH price level again and again, DeFi is continuing to explode. This coincides with significant growth across some of the top DeFi platforms. With DeFi tokens breaking all-time price highs, more people are flocking to alternative financial systems with better borrowing and lending rates.
Even though transaction fees on Ethereum are at record highs, DeFi platform usage has continued to surge. The DeFi crypto market cap is $83.84B, a 20.70% decrease over the last day.
(Data by https://coinmarketcap.com/defi/)
Now that you know the numbers. Let us understand why the market decides to cast a vote on DeFi.
Before doing that, I would like to take you back to Nov 26, 2020, the day when the CEO of one of the largest centralized crypto exchanges on earth, Brian Armstrong, who is considered a semi-hero/semi-autocrat, issued a warning to the crypto space saying the enemy is now at the gate.
Through the peephole, we can see the authority is unsurprisingly keen to roll out new regulation that would block withdrawals to unknown addresses from regulated crypto wallets, essentially necessitating a whitelist of remittance recipients, single-use personal addresses, unverified merchants, and smart contracts, which would conveniently replicate modern banking’s accessibility issues, and create a two-tiered system of crypto financial services.
If you are a crypto-lover, your disgust is palpable. 😠
If you are a crypto-lover, your delight is shared because the response is a perfect indicator of how disruptive and ideal it is. 😁
Decentralized finance (DeFi), as the blockchain-native financial service, represents the most important values of the crypto community. It is and should stay open, decentralized, permission-less, non-custodial, and pseudonymous.
We would like to say that the whole idea of DeFi is predicated on a very open and water-like philosophy, which makes any regulation and manacles imposed on this sector immediately obsolete and alienating.
DeFi is new, fresh, different and more importantly, it is creative disruption. If capitalism is all about disrupting the status quo with creativity and innovation, then it should embrace DeFi.
As a matter of fact, it does.
And now imagine you have to build a bank-less future, an entirely new financial system from scratch: payments, lending, insurance, asset issuance, exchange, data generation and monitoring.
The list can go on and on.
Any rational mind is going to be overwhelmed by the workload and you will have to wade your way through a long tedious process of the rigid FDIC-insured financial system and e-trade accounts, and then finally land to a crypto equivalent.
Yet over the past two years, crypto space has spawned the building blocks to do just that.
“A parallel financial system first requires a synthetic dollar; the creation and management of that asset require basic lending facilities and reference data infrastructure to maintain the asset’s peg; scaling up and getting rates and spreads competitive with centralized solutions requires hefty incentives for capital providers; if you figure out how these markets can work, you’ll have to contend with the lack of circuit breakers and chargebacks; you’ll have to protect deposits from “bank runs” and hacks; you’ll need savvy risk managers setting the protocol defaults, defenses to prevent application-draining attacks, and low-cost insurance against technical errors.”
Doesn’t that sound fun?
Well, with decentralized finance, Maker (crypto dollars), Uniswap (automated market-making), Compound (liquidity mining), Balancer (dynamic liquidity pool rebalancing), YFI (smart asset management), Aave (flash loans), ChainLink (data oracles), SushiSwap (defensive countermeasures), CVP (proxy aggregation), and bZx (decentralized bug bounty protocol), we have examples of the building blocks needed to power a fully decentralized and algorithmic financial system.
With that being said, we believe DeFi is well justified.
Despite these impressive developments, the DeFi sector accounts for just around 5% of the total cryptocurrency market capitalization, which currently stands at $1.70T.
Despite representing just a small percentage of the total crypto market, DeFi’s rapid growth suggests the sector is primed for explosive growth as cryptocurrency becomes more mainstream.
It would be wrong if we do not participate in the building of future DeFi world.
Raze Network will provide cross-chain end-to-end payment privacy for the entire DeFi stack. And one of the most important components of Raze products is the Secret DeFi Bridge, with which users can hide their trading history as RAZE is compatible across all DeFi products. It can be fully compatible with Uniswap, AAVE, Compound, and also the evolving DeFi ecosystem on Polkadot.
Reference:
https://tokeny.com/defi-ecosystem/
https://cointelegraph.com/news/defi-giant-aave-hits-a-new-high-at-520-tvl-rises-to-4-96-billion
https://beincrypto.com/defi-tvl-breaks-all-time-highs-surpassing-30-billion/
https://cointelegraph.com/news/45b-defi-market-cap-and-soaring-tvl-suggest-the-best-is-yet-to-come
https://twitter.com/brian_armstrong
https://messari.io/pdf/messari-report-crypto-theses-for-2021.pdf
About Raze Network
Raze Network is a Substrate-based cross-chain privacy protocol for the Polkadot ecosystem. It is built as a native privacy layer that can provide end-to-end anonymity for the entire DeFi stack. The Raze Network applies zkSNARKs to the Zether framework to build a second-layer decentralized anonymous module. It will then be imported as a substrate-based smart contract. The objective of Raze Network is to enable cross-chain privacy-preserving payment and trading systems while protecting the transparency of your assets and behaviors from surveillance.
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