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Gate.io Research: The Current Development of DeFi Lending and the Possibility for Future Reinvestment after the Market Pullback
Gate.io Research: The Current Development of DeFi Lending and the Possibility for Future Reinvestment after the Market Pullback
2021-07-19 08:22:42 UTC
58683 Lire
Summary
The year 2020 witnessed the “DeFi Summer”, when the lending industry developed in its prime with DeFi projects. However, the exciting time lasted merely one year, and the “Dark May” in 2021 made crypto investors lose their direction. This article focuses on DeFi lending and discusses the current development and layout of the DeFi lending market. To explore the future investment direction of DeFi lending, the Gate.io team studies whether DeFi lending is resilient enough to thrive amid the recent market crash and this article analyzes the possibility for the reinvestment of the lending field through project research and market assessment.
Key Information
◆The recent year has witnessed a wild growth of the DeFi market, as liquidity mining brought about the DeFi Summer and the lending industry took DeFi to its prime time.
◆The prices in the crypto market influenced DeFi lending field through price transmission mechanism and lending protocol liquidation mechanism and increased atic risk under the market crash, which posed a malicious cycle to lending projects.
◆Cryptocurrency prices nearly cut across the board in May 2021, but decentralized lending showed some resilience. For example, the decline of TVL was less than BTC and crypto indexes; lending demands did not shrink as expected but recovered slowly; the capital utilization was enhanced; the pledge rates were shrinking but still supported; lending rates float steadily and are likely to fluctuate reasonably.
◆The high pledge rates and the insufficient support of capital flows (staying in the asset conversion) have become the current issues of DeFi lending. Finance essentially serves for liquidity. Side collateral or unsecured loans remove the existing liquidity restriction and form a new lending paradigm, which is expected to become a future investment direction. The essence of finance is reflected by the real intentions and demands matched by both lending and borrowing parties. Financial capital empowering the economy can significantly amplify the value. The current business-oriented business is gradually taking shape, and the expansion of institutional business may enhance the value of capital utilization.
◆This author predicts multiple blossomings in the future lending market following the innovation of lending mechanisms and the business expansion of institutions.
Disclaimer:
This report is based only on objective market data, and the cited data has been collected accurately and rigorously to the best of the team’s ability. But it cannot guarantee 100% accuracy and cannot be referred to as personal investment advice.
Click here to download the report in PDF: (https://gimg.gateimg.com/image/1626679192855107485_市场回调后DeFi借贷的发展现状与未来再投资性研究.pdf)
The year 2020 witnessed the “DeFi Summer”, when the lending industry developed in its prime with DeFi projects. However, the exciting time lasted merely one year, and the “Dark May” in 2021 made crypto investors lose their direction. This article focuses on DeFi lending and discusses the current development and layout of the DeFi lending market. To explore the future investment direction of DeFi lending, the Gate.io team studies whether DeFi lending is resilient enough to thrive amid the recent market crash and this article analyzes the possibility for the reinvestment of the lending field through project research and market assessment.
Key Information
◆The recent year has witnessed a wild growth of the DeFi market, as liquidity mining brought about the DeFi Summer and the lending industry took DeFi to its prime time.
◆The prices in the crypto market influenced DeFi lending field through price transmission mechanism and lending protocol liquidation mechanism and increased atic risk under the market crash, which posed a malicious cycle to lending projects.
◆Cryptocurrency prices nearly cut across the board in May 2021, but decentralized lending showed some resilience. For example, the decline of TVL was less than BTC and crypto indexes; lending demands did not shrink as expected but recovered slowly; the capital utilization was enhanced; the pledge rates were shrinking but still supported; lending rates float steadily and are likely to fluctuate reasonably.
◆The high pledge rates and the insufficient support of capital flows (staying in the asset conversion) have become the current issues of DeFi lending. Finance essentially serves for liquidity. Side collateral or unsecured loans remove the existing liquidity restriction and form a new lending paradigm, which is expected to become a future investment direction. The essence of finance is reflected by the real intentions and demands matched by both lending and borrowing parties. Financial capital empowering the economy can significantly amplify the value. The current business-oriented business is gradually taking shape, and the expansion of institutional business may enhance the value of capital utilization.
◆This author predicts multiple blossomings in the future lending market following the innovation of lending mechanisms and the business expansion of institutions.
Disclaimer:
This report is based only on objective market data, and the cited data has been collected accurately and rigorously to the best of the team’s ability. But it cannot guarantee 100% accuracy and cannot be referred to as personal investment advice.
Click here to download the report in PDF: (https://gimg.gateimg.com/image/1626679192855107485_市场回调后DeFi借贷的发展现状与未来再投资性研究.pdf)
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Gate.io Team
Jun 21st, 2021
