DEFI AND THE STORY OF MASS ADOPTION
Mass Adoption is the ambition but also the inevitable destination of DeFi - Decentralized Finance. However, DeFi and the Mass Adoption story, although not too far away, are not within reach as many people think. To achieve the ambition of Mass Adoption, DeFi has a long journey to work on.
Total assets locked to DeFi protocols (TVL) hit an all-time high of $180 billion in November 2021, equivalent to just 6% of the total market capitalization of the entire crypto market at the time. Currently the market capitalization is down to $755 billion, and the share of TVL in DeFi projects is down to just $38.9 billion, or just 5% of the entire market. And if you compare this number with the traditional financial market, the gap is many times bigger.
It can be argued that DeFi and crypto, like the Internet in the 90s, are still in their infancy, have a limited number of users, and many barriers need to be removed for this number to grow and become widely available. So what are the barriers that users are facing when accessing DeFi?
For those already familiar with blockchain as well as crypto, setting up and installing a crypto wallet will of course be extremely easy. However, as a regular user with no such blockchain experience, setting up such a wallet is an extremely difficult task. Long encrypted wallet addresses, brand new confusing terms, “gas fees”, network selection and differentiation, etc. are enough to make the most potential new users give up even before they start. Metamask wallet was born to make it easier to create and manage wallets, but we still need crypto wallets that are more user-friendly with a more attractive interface for users, and easier to manage assets and network distribution.
After successfully setting up a wallet, users will still face obstacles when using DeFi, with many jargons such as “Yield Farming”, “Liquidity Pool”, “DEX”, etc. After getting familiar with the terminology, users must learn how to navigate DeFi platforms. Each different protocol has a different sequence of operations that users will struggle to overcome. The fact that the market has many protocols with different processes creates diversity, but also makes managing assets on multiple platforms more complicated, thereby making it extremely difficult for users to enter these new areas full of potential.
In addition, the diversity of platforms, and many different blockchain networks make asset management difficult even for longtime users. It is still easy for new users to get confused and make mistakes such as sending assets to the wrong network, resulting in loss and damage.
Although the above barriers are still fundamental, it is from the removal of these fundamental barriers that the DeFi market can reach more of the world's users, and the more efforts in the upgrading of infrastructure and technology, the construction of a legal corridor, etc. can maximize the effectiveness of the Mass Adoption of DeFi.
3S Wallet - the gateway to make DeFi more accessible
3S Wallet is a Multichain wallet designed and built by BHO Network, providing a secure and easy crypto-asset custody solution. 3S Wallet is built around 3 criteria: "Simple", "Security", and "Safe", aiming to give users the smoothest experience. 3S Wallet integrates many features to optimize user experience such as: integration of on-ramp payment gateway through Moonpay, Kyberswap integration allowing users to swap assets quickly with low cost, user-friendly custom interface. The goal of 3S Wallet is to bridge the gap between DeFi and the traditional market, remove barriers for new users, and make DeFi more accessible.
DeFi may be slowing down and is in the self-improvement phase, but we have reasons to believe that in the future, DeFi will play a big role in the world’s financial market, completely changing how we view the financial system as a whole. However, until then, we still have to find ways to improve DeFi, and step-by-step remove the barriers to be able to bring DeFi and its Mass Adoption story closer to reality.
Published on January 04, 2023
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