Okay before we jump into DeFi 2.0, you must know about Liquidity, LP. Liquidity mining etc... i will not explain those all. Just a little for introduction haha...
DeFi (Decentralized Finance), one of the most successful waves of blockchain-based innovation. DeFi refers to the wide range of decentralized applications that disintermediate existing traditional financial services and unlock entirely new financial primitives. with the advantages of "permissionless composability" and "open-source development culture", DeFi protocols are constantly advancing and iterating upon proven models of financial-based agreements.
The innovation of DeFi 1.0 was to create pools whose liquidity were provided by users, specially pools in new projects.
https://blog.chain.link/defi-2-0-and-liquidity-incentivization/As time passing by and more people started taking money out of the pool to finance their own crypto projects, problems emerged.
- More tokens are released as LP rewards leading to an increasing supply and selling pressure
- LP tokens without an attractive staking or burning mechanism might be relentlessly sold to the market, affecting the token price
- Impermanent Loss
- Lending requires over-collateralized assets and suffers from capital inefficiencies
One solution that has risen on DeFi community in 2021 is OlympusDAO’s bonding model, which focuses on Protocol-Owned Liquidity (POL). Later on Called DeFi 2.0..
https://blog.chain.link/defi-2-0-and-liquidity-incentivization/Later on there's Abdracadabra, Convex, Wonderland, etc etc.. all of them has their own mechanism and treasury with a mind blowing APY tho...
but because of that so much DAO projects is popin out! be careful to choose DAO project now!
Okay, so here's the diff between DeFi 2.0 and DeFi 1.0.
https://cointelegraph.com/defi-101/defi2-0-a-beginners-guide-to-the-second-generation-of-defi-protocolsDeFi 2.0 will be able to do the following with projects focusing on capital efficiency:
- Optimizing Total Value Locked (TVL) and used for the full potential
- Create a sustainable cash flow
As we are see right now, OlympusDAO, Wonderland, Abracadabra has been doin some great work. As well as Terra LUNA and UST for funding other Chain DeFi. making more stable on the native token price. Making more Bond LP. Backed up price.. etc etc...
Solution for making higher demand on UST and LUNA < read here
That's why in my opinion 2022 will be a DeFi 2.0 and Farmer 2.0 year. With a slightly bear cycle on the market, staking is one of the most promising strategy for gaining profit.
It's not about cross-chain anymore. It's now about multi-chain. Backing up one with another. for more sustainable flow.
So Buddy! what token will be affected with this DeFi 2.0 wave?
Here's my prediction..
1. Cosmos Ecosystem... and all of the token in it, for examples ATOM, LUNA, Osmosis, IRIS, Akash, Secret etc.... why? because of the IBC protocols brother... and Osmosis DEX with some new staking mechanism! > READ
1.5. Terra Ecosystem LOL~ a "Farmer Heaven Land"
2. Oracle Project will probably rising up because of the needs of information between chain.
and one of the most bullish token is! The Sleeping Bull! Chainlink! Like i always said on my older post!
~btw you can read all of my recap here << click click buddy for more interesting read xD
3. Polkadot Ecosystem... why? lol why'd you ask? the answer is the same as Cosmos... "multi-chain".
4. DAO project, such as OlympusDAO and InvictusDAO which has been collaborating with Terra LUNA, Wonderland (sushi is now merge with wonderland @_@ wow) , ahh there's RomeDAO a gaming/nft DAO i think it's a good project
and all of the L1 - L2 that got involved with i've been mentioned above
All of these are my personal opinion. You can share yours too! Feel free!
dont forget to check my other post HERE
thanks!