DeFi protocols that are simple to use will become the new crypto gatekeepers

In order for DeFi to survive the market’s unexpected volatility, future and current decentralised ventures must consider utility and accessibility.

Participating in the crypto ecosystem has perhaps never been easier. More people are beginning to realise the possibilities of the business and engage in this ever-growing ecosystem after centralised exchange heavyweight Coinbase recently began enabling its users to deposit portion of their fiat wages into the exchange in the form of crypto.

However, cryptography is frequently seen as being fundamentally complex or lacking in appropriate interfaces, and whether this is correct or incorrect, it has been this way for a long time. Some people will always find the concept of digital currencies to be just too confusing. However, in recent years, easier entry points into the crypto world have emerged for people interested in learning more.

It’s critical to establish why people should consider investing in cryptocurrency. Digitalization, like the rest of the world’s industries, is transforming every aspect of our life. Being able to comprehend it early on will assist more individuals in comprehending the financial benefits of this technology and being accustomed to a future that will most likely largely involve digital currency.

As a result, all developers in the sector should think about making entry points into crypto as simple as feasible. That isn’t to say the business hasn’t progressed, and it continues to demonstrate why decentralisation is the key to a prosperous financial future.

What are the existing crypto entrance points?

The present entrance points into the digital currency business are unquestionably more accessible than they were a year ago. However, much more has to be done to guarantee that existing crypto entry points for newcomers are maintained, developed, and promoted to the appropriate people.

Not only are there tools to assist you learn about and buy cryptocurrency, but there are also applications that put those assets to work. Yield farming is a simple way to get started with cryptocurrency: it’s a form of high-interest deposit returns that was once thought to be a complicated feature of decentralised finance (DeFi), but has evolved into a product that almost anyone can understand and use to start earning on their portfolio quickly. You can just buy some tokens and stake them in a liquidity or lending pool, allowing them to grow in value.

Furthermore, nonfungible tokens have recently become a well-known entrance point (NFTs). In the digital world, NFTs are “one-of-a-kind” assets that may be purchased and sold like any other piece of property but have no physical presence. During the first half of 2021, the space had dramatic exponential growth, with $2.5 billion in sales volume for NFTs alone.

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Fundamentally, NFTs are a novel and unusual technology for the general public. They have a lot of clout because they have only lately come to the attention of mainstream audiences, which boosts their desirability and demand. Because digital artists can reach millions of people/customers inexpensively and rapidly, the “art” world has seen explosive growth in the NFT sector.

Another factor contributing to NFTs’ growing popularity is their perceived status. Some NFTs, such as Crypto Punks and Bored Apes, have developed their own cult-like groups, and possessing one is seen as belonging to a very elite club, not to mention possibly extremely wealthy. Some NFT artworks are fetching astronomical prices, yet this is only the beginning of a very young ecosystem.

What’s the issue with the current access points?

Projects must be ready to adapt in order to promote crypto accessibility, as factors such as high gas prices drive consumers away from the Ethereum network. Because of the expensive gas fees, many projects and users have moved to cheaper blockchains like Solana, which has lately experienced an NFT boom with the creation of Solana Monkey Business, Degenerate Ape Academy, and Meerkat Millionaires Country Club.

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To make crypto approachable, work needs to be done, and concerns with accessibility, high gas fees, and sophisticated user interfaces are preventing new users from realising their full potential. However, more education is required to enable these new users gain the confidence they need to utilise these products confidently and without fear of losing the money they have invested in digital currencies.

DeFi accelerates as alternative blockchains and NFTs gain traction

Although there is noticeable progress in DeFi, which is assisting in the creation of additional easy entrance points into crypto, the NFT space is still a long way off. Given the sky-high prices of some of the most popular NFTs, such as Bored Apes and Crypto Punks, which have sold for hundreds of thousands of dollars, this is almost acting as a deterrent, as those who aren’t in crypto are left wondering why on earth people would pay such a high price for a digital image that can be easily replicated.

This also pertains to the previous point regarding education and how NFTs may be useful when used correctly, which more people need to realise. This will be the result of the NFT initiatives evolving and demonstrating why these tokens may be valuable and useful in everyday life rather than just being a strange piece of online art.

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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