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Many people in the cryptocurrency market think that blockchain 1.0 is Bitcoin and 2.0 is Ethereum. EOS, TRON, etc. that appeared later all claimed to be blockchain 3.0, but currently, these projects that claimed to be 3.0 or even 4.0 are either unknown or have disappeared.
Since last year, with the rapid growth of DeFi, there have been a large number of blockchain projects that have achieved remarkable results. The most representative ones are MakerDAO, Compound, Aave, Uniswap, Yearn, and other mainstream DeFi projects. They draw on the traditional financial market and create a centralized central bank, commercial bank, non-financial institution, etc., in the cryptocurrency world by combining blockchain technology. Therefore, these early decentralized financial infrastructure setting scenarios are classified as DeFi 1.0.
Recently, the concept of DeFi 2.0 has begun to appear. It was first mentioned in an online live broadcast by Scoopy Trooples, the developer of the loan agreement Alchemix. According to Scoopy Trooples, the DeFi application built on the earlier DeFi protocol was another innovation from 0 to 1. It can be regarded as the second generation protocol, also known as DeFi 2.0. But so far, DeFi 2.0 is only limited to the emergence of concepts, and there is still no unified concept and classification.
According to Scoopy Trooples' understanding, by re-innovating early successful DeFi applications and deriving new products or mechanisms, these derived products or mechanisms can be classified as DeFi 2.0
Some investors also believe that DeFi 2.0 should have improved user experience, richer liquidity, higher capital utilization, and incentive mechanisms, smooth risk transfer, a high asset portfolio, a more reasonable decentralized community governance structure, and other features.
At present, there are many projects on the market that investors have classified into the ranks of DeFi2.0. Projects such as the cross-chain interest-bearing asset lending application Abracadabra, the decentralized leverage application Fodl Finance, the algorithmic reserve token Olympus, and the high asset portfolio Terra are considered to meet some of the characteristics of DeFi2.0 to a certain extent. However, many of these projects' development capabilities, safety, rationality, and incentive mechanism are worthy of scrutiny and verification.
Risks often accompany the emergence of a new concept. Just as we mentioned that the idea of DeFi 2.0 is still at the stage of being said, there is still no unified concept and standard. Whether DeFi 2.0 could reignite the hot DeFi market can only be verified by time and results. Investors need to judge the risk and reasonable investment in the investment process and not blindly become the victim of the "new concept."
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