DeFi Frontier July 24, 2023

Welcome to the latest edition of the DeFi Frontier! While there haven't been significant changes since our last update, several noteworthy events have occurred in the world of DeFi that could contribute to its positive momentum, even amidst a temporary pullback. Let's Dive in.

Crypto News 🗞️

EU Reveals Strategy for Web3, Metaverse, AI, and Crypto:

The European Union has recently unveiled a comprehensive strategy encompassing web3 technologies, the metaverse, (AI), and cryptocurrencies. This strategy is expected to shape the regulatory landscape and foster innovation within the region, presenting opportunities and implications for the development and adoption of emerging technologies. Read More

VC Funding in Web3 Plummets 76%: Crunchbase Data

According to a recent report by Crunchbase, VC funding for Web3 startups has plummeted by 76% in the second quarter compared to last year. This decline surpasses the overall drop in VC funding across all sectors, reflecting the challenges faced by cryptocurrency and blockchain startups in the ongoing crypto winter. Although the numbers are concerning, there have been some noteworthy funding rounds, indicating continued interest in select Web3 projects. Despite the funding downturn, key players like a16z and Binance Labs maintain their optimism for the future of Web3. Read More

Trending topics in DeFi

New US Senate Bill Seeks to Regulate DeFi Like Banks:

A recently introduced bill in the US Senate aims to regulate DeFi platforms similarly to traditional banks. This proposed legislation has sparked discussions and raised concerns about the potential impact on the regulatory landscape for decentralized finance. Read More

Uniswap Launches UniswapX Cross-AMM Protocol:

Uniswap, has unveiled its latest protocol called UniswapX. This innovative cross (AMM) protocol aims to enhance liquidity and efficiency by enabling interoperability across various AMM platforms. The introduction of UniswapX is expected to further advance decentralized exchanges and facilitate seamless asset swaps. Read More

Embracing Real-World Assets: A Key to DeFi's Growth

Introduction: To foster the growth and maturity of DeFi, the sector must embrace real-world assets. This article explores the potential of incorporating real-world assets, such as traditional securities and commodities, into the DeFi ecosystem. By bridging the gap between traditional finance and DeFi, the sector can unlock new opportunities and attract a broader range of participants.Read more

Twitter Thread of the week 🏆

Tokenization: The Key to Mainstream DeFi

Despite its $44 billion total value locked, DeFi remains a niche in the financial ecosystem. To expand its reach, DeFi needs to link with traditional finance, allowing it to engage with real businesses and institutional investors. This article discusses the challenges faced by DeFi, including over-collateralization and unstable incentives, and suggests the tokenization of real-world assets as a solution. With traditional financial players beginning to dabble in DeFi, integrating these two financial worlds isn't just probable but imminent, promising greater efficiency, transparency, and inclusivity. Read More

DeFi Learning Zone 📚

Proof of Work (PoW) A consensus algorithm in a blockchain network. PoW requires miners to solve a hard but feasible computation to add a new block to the chain. Bitcoin is the most known network using this consensus algorithm.

Proof of Stake (PoS) An alternative to proof of work, in which the amount of cryptocurrency you hold (your "stake") is used to calculate the odds of you adding a block to the chain. Unlike proof of work, proof of stake doesn't require energy-intensive calculations.

Blockchain This is a decentralized and distributed digital ledger where transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly. It's the underlying technology for most cryptocurrencies.

Smart Contract A self-executing contract with the terms of the agreement directly written into lines of code. The code and the agreements contained within exist across a distributed, decentralized blockchain network. Smart contracts automate transactions and contractual agreements, reducing the need for intermediaries.

Tokenization In the context of blockchain technology, tokenization is the process of converting rights to an asset into digital tokens on a blockchain. Real-world assets, securities, or even other cryptocurrencies can be represented as tokens.