Feb 24, 2025: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

 explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly Highlight — Mixed Economic Data Leads to Risk-Off Strategies

For the past two months, the strong U.S. economy has given investors confidence to invest in markets, even amidst looming tariffs and a stricter Federal Reserve Board. However, recent data indicates that this support may be weakening.

Last Friday, several reports on consumer sentiment, housing and services contributed to the S&P 500's largest loss of the year as it fell 1.7%, wiping out its weekly gains. In contrast, bonds experienced a rally, driving the yield on 10-year Treasuries down to 4.43%. The VIX {

the Chicago Board Options Exchange's (CBOE) Volatility Index

, known as the "fear gauge"] spiked, but remained below 20, signaling increased market anxiety.

Previously, optimism among investors was fueled by speculation regarding U.S. president Trump’s policies promoting disinflationary growth. However, mixed economic signals are now causing concern, particularly a report showing a decline in consumer sentiment alongside rising long-term inflation expectations — the largest drop since 1995. Additionally, existing U.S. home sales fell for the first time since September 2024, further complicating the outlook.

While January's job growth appeared solid, with 143,000 jobs added and the unemployment rate stable, institutional investors began the year with a pro-risk stance, optimistic about the U.S. economy’s trajectory. Yet, the recent volatility in economic data has prompted a reevaluation of strategies.

Weekly Crypto Highlight — SEC May Drop Lawsuit Against Coinbase

Coinbase announced that the U. S. Securities and Exchange Commission (SEC) has agreed to drop its lawsuit accusing Coinbase of operating an illegal exchange, pending Commissioners’ approval. Following this news, Coinbase shares initially surged in premarket trading, but fell by 4% to $246.30 as of midday in New York. Bitcoin also declined by about 1%, trading at around $97,000.

This decision signals a shift from the aggressive regulatory stance of former SEC Chair Gary Gensler, who faced criticism from the crypto industry for enforcing regulations through lawsuits. Last week, the SEC likewise requested a pause on a similar case against Binance, highlighting ongoing developments regarding a regulatory framework for digital assets.

The SEC's complaint will be unfairly dismissed, meaning it cannot be refiled. Coinbase CEO Brian Armstrong stated that this dismissal will entail no fines or changes in the company’s operations.

Coinbase has actively engaged in Washington, D.C., donating millions to support pro-crypto candidates and recently adding Chris LaCivita, a former Trump campaign manager, to its advisory council. Armstrong has also communicated with Trump directly.

The SEC initially sued Coinbase in June 2023 amidst a broader crackdown on the digital asset industry following the 

. Gensler had claimed that many tokens fell under SEC jurisdiction. 

The dismissal alleviates a significant burden on Coinbase, allowing it to list more tokens and refocus on product development, rather than legal defenses. This outcome removes a key litigation risk, enhancing Coinbase's capacity to innovate. The company recently reported strong fourth-quarter earnings, and now aims to collaborate with Congress and regulators in order to establish clearer rules for the crypto landscape.

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Weekly Institutional Insights: Mixed Economic Data Rattles Market; SEC May Dismiss Lawsuit

Learn everything you need to know about Bybit's recent security incident and the next steps in this article.

Security breaches have shaped the cryptocurrency industry for over a decade, forcing exchanges to evolve, users to become more cautious, and regulators to tighten their oversight. From the infamous 

 collapse to the Binance security breach and 

, history has shown that while no platform is immune to threats, those that respond swiftly and transparently can emerge stronger than ever.

 where over $1.5 billion worth of ETH and stETH were compromised, and while any breach is a serious concern, our rapid response and transparency set us apart from past incidents. Unlike FTX, where billions disappeared in mere hours due to mismanagement, Bybit immediately secured assets, froze affected wallets, and maintained full platform operations. Funds remain backed 1:1, and users can continue to trade, withdraw, and deposit without disruption.

Looking at past events, we can understand how crypto security has evolved, what lessons were learned, and what the industry must do next to ensure a safer future.

A Look Back: The Most Notorious Crypto Hacks That Changed the Industry

One of the earliest and most devastating exchange hacks, 

 — valued at $450 million at the time, but worth over $36 billion today. The platform’s weak security, lack of cold storage, and failure to detect suspicious transactions led to its downfall.

The lesson was clear: Exchanges must prioritize secure wallet management, rigorous internal controls, and transparency. The Mt. Gox collapse led to better industry-wide custodial practices, ensuring that no single exchange could operate without proper security measures in place.

 due to a smart contract vulnerability. In a surprising turn of events, the hacker returned the funds, proving that on-chain tracking and community response could play a key role in recovering stolen assets.

The attack showed that DeFi projects need more rigorous security audits and multi-signature controls to prevent exploits at the smart contract level.

Unlike traditional exchange hacks, FTX’s downfall wasn’t due to external attackers but rather internal mismanagement and misuse of customer funds. In just two hours, billions of dollars were withdrawn, leaving users helpless as the platform collapsed.

This event reshaped the industry by accelerating Proof of Reserves (PoR) adoption, a transparency measure that allows users to verify an exchange’s solvency. FTX’s failure highlighted the need for stricter regulations, better internal accountability, and clear asset-backing policies.

In October 2022, Binance suffered a $570 million hack after attackers exploited a vulnerability in BSC Token Hub, a cross-chain bridge used to transfer assets between blockchains. The exploit allowed hackers to move 2 million BNB tokens off the network. 

Binance’s swift response helped limit the damage, with the exchange pausing the BNB Chain for several hours. This attack highlighted the risks associated with cross-chain bridges, reinforcing the need for stricter smart contract audits, real-time threat detection, and stronger validator coordination to prevent similar exploits in the future. 

Each of these incidents led to major security advancements and industry-wide improvements. Now, Bybit faces its own challenge — and just like Binance and other top exchanges, we are committed to coming back stronger than ever.

How Exchanges Have Improved Security Over Time

The best exchanges don’t just survive hacks—they emerge stronger by adopting new security protocols, improving transparency, and prioritizing user protection.

One of the most significant changes has been the shift to cold storage dominance, where most exchanges now keep 90% or more of user funds in offline wallets to minimize exposure to potential attacks. Security audits have also become an industry norm, with regular penetration testing, bug bounty programs, and white-hat hacker collaborations helping to identify and fix vulnerabilities before they can be exploited.

User protection funds, like Binance’s SAFU, have set a new standard for ensuring users don’t bear the cost of security breaches. AI-powered fraud detection and real-time transaction tracking have also become essential tools for identifying suspicious activity before it escalates.

Beyond individual exchange improvements, the broader industry has adapted through regulatory changes. Proof of Reserves (

) has become a key transparency measure, allowing users to verify an exchange’s solvency. Licensing requirements and exchange accountability frameworks have also become more stringent, making it harder for bad actors to operate unchecked.

How Bybit’s Response to the Crypto Hack Sets a New Standard

The way an exchange responds to a security incident defines its long-term reputation and user trust. Over the years, some platforms have struggled to manage hacks transparently, while others have turned crises into opportunities to strengthen security. Bybit’s response to this incident demonstrates our commitment to transparency, operational resilience, and user protection.

The speed of response is one of the most critical factors in mitigating damage during an attack. Bybit acted immediately, isolating affected wallets and preventing further losses. Unlike past incidents where breaches went undetected for hours or even days, Bybit’s security teams responded in real time. The ability to contain the situation quickly is a testament to our proactive monitoring systems, robust security protocols, and dedicated cybersecurity team.

Full Transparency and Real-Time Communication

Many users lose confidence in exchanges when there is a lack of clear communication during a crisis. From the start, Bybit has maintained full transparency, providing regular updates to reassure users that their assets remain secure and backed 1:1.

Rather than delaying information or releasing vague statements, Bybit has been upfront about the incident, outlining the exact steps taken to contain the breach and reinforce security. This level of openness is crucial in maintaining user trust and setting a new industry standard for responsible crisis management.

One of the biggest concerns during an exchange hack is whether users will face withdrawal restrictions or see trading halted. Bybit ensured that trading, deposits, and withdrawals remained fully operational throughout the incident.

This highlights the exchange’s financial strength and liquidity, ensuring that user funds were not affected. No restrictions were placed on withdrawals, and all assets remained backed 1:1. 

Bybit isn’t just focused on resolving the immediate issue; we are using this incident as a catalyst to further enhance security across the platform. While we already implement industry-leading security measures, we are now working with top blockchain security firms to audit our systems and implement even more advanced security solutions.

Bybit remains financially strong, with all user funds fully backed and secure. Our commitment to industry-leading security practices, user transparency, and rapid response times ensures that we will emerge from this incident stronger than ever.

As the crypto industry continues to evolve, Bybit is setting a new standard for how exchanges should handle security challenges — with transparency, operational resilience, and an unwavering commitment to user protection.

While exchanges continue to improve security, users must also take proactive steps to safeguard their assets. Here’s how you can strengthen your crypto security:

 or SMS-based 2FA to add an extra layer of protection. This prevents unauthorized access even if your password is compromised.

Use withdrawal whitelisting to ensure only pre-approved wallet addresses can receive funds. This minimizes risks from phishing scams or unauthorized transactions.

If you’re holding large amounts of crypto, consider hardware wallets like Ledger or Trezor. Unlike exchange hot wallets, cold storage keeps assets offline and safe from cyberattacks.

Hackers often exploit major security incidents by impersonating exchange support teams. Always:

Enable transaction alerts to receive real-time notifications for any account activity. Report any suspicious actions immediately to Bybit support.

By following these best practices, you can further protect your assets even during uncertain times.

The Bybit incident reinforces the need for continuous security improvements across the industry. Moving forward, we can expect:

Stricter Security Standards for Exchanges

Regulators may push for mandatory insurance funds to protect users in the event of security breaches. Additionally, exchanges will be expected to adopt stronger internal controls and more frequent security audits.

To combat sophisticated attacks, exchanges will likely invest in AI-driven risk monitoring that detects anomalies before a hack can escalate.

Greater Transparency and Proof of Reserves

 to ensure their funds are secure. Bybit remains committed to maintaining full backing of user assets and transparent operational updates.

More exchanges may introduce hybrid custody models, where users can trade while maintaining partial self-custody of their assets.

Crypto’s Strength Lies in Solidarity: Bybit’s Gratitude to Partners and Users

One of the most powerful takeaways from this incident has been the overwhelming support from our partners, industry leaders, and users. As soon as the news broke, top security firms, blockchain analytics teams, and exchange partners reached out, offering their expertise and assistance to track the stolen assets and enhance security.

We are incredibly grateful for the outpouring of support from our community. Crypto has always been an industry built on resilience and collaboration, and this event has reinforced that when one exchange is attacked, the industry stands together to protect users and strengthen security.

Bybit would like to extend a heartfelt thank you to our partners, users, and the broader crypto ecosystem for standing with us during this time. Your trust, patience, and unwavering support fuel our commitment to come back stronger, set new security benchmarks, and continue providing a safe and innovative trading experience.

Bybit’s Commitment to a Stronger Future

Despite this setback, Bybit remains one of the strongest and most well-respected exchanges globally. Our response to this incident proves that:

Bybit’s journey doesn’t end here. We will continue to improve, evolve, and set new security standards for the industry.

The crypto space must learn from every challenge, and with greater security, transparency, and resilience, we can build a safer, more trustworthy future for all users.

The road ahead is clear — Bybit is here to stay, and we are stronger than ever.

For real-time updates, you may refer to our official channels such as the 

Beginner

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Hacks That Strengthened Crypto: Responses That Build a Safer Future For All

As of mid-February 2025, the cryptocurrency market is experiencing movements driven by economic pressures and regulatory movements. 

As of mid-February 2025, the cryptocurrency market is experiencing movements driven by economic pressures and regulatory movements. Recent inflation data has rattled financial markets, leading to a sharp reassessment of expectations for Federal Reserve policy. A higher-than-expected Consumer Price Index (CPI) report has caused Bitcoin to dip below $94.2K before rebounding to approximately $98.1K. This fluctuation illustrates how macroeconomic factors are increasingly influencing digital assets, mirroring trends seen since early 2022 when the Fed began raising interest rates.

Santiment data reveals that discussions around the terms “CPI” and “inflation” surged to 1.75% of all crypto conversations, the highest level since 2022. This heightened sensitivity indicates that when markets are stagnant or declining, economic news is met with increased concern and fear, often leading to sell-offs. Despite the increased uncertainty, Bitcoin has demonstrated resilience, staying above the $98K mark. Nevertheless, continued inflation could lead to further volatility in risk assets such equities and crypto.

The LIBRA scandal has further complicated the crypto landscape. Argentine President Javier Milei's endorsement of the cryptocurrency led to a dramatic rise — and an even more significant fall in value, as it plummeted by 80% within days. Allegations of fraud surrounding Milei have intensified scrutiny of speculative assets, particularly meme coins, leading to a crisis of confidence among investors.

The fallout from this scandal reflects a broader trend of growing impatience with high-risk assets. Retail sentiment has turned bearish, as evidenced by increased mentions of selling across social media platforms. This shift highlights the need for thorough research before investing in speculative projects. The LIBRA incident serves as a stark reminder of the risks associated with relying solely on endorsements for investment decisions, prompting many traders to seek more stable and established cryptocurrencies.

Emerging Opportunities and Investor Behavior

Litecoin is gaining traction, driven by the possibility of a spot ETF approval that could pave the way for broader access to altcoins, further maturing the crypto market. As discussions around the term “Litecoin ETF” spike, market analysts are optimistic about the likelihood of approval, which could enhance investor interest in Litecoin and similar assets.

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Bybit x Santiment: LIBRA Scandal Gives Rise to Meme Coin Crisis; Litecoin ETF Anticipations Build Up

KAITO is the core currency of Kaito AI’s InfoFi ecosystem, enabling transactions, governance, staking, and community engagement.

The S&P 500 fell 0.43% amid Walmart’s weak outlook, with investors eyeing PMI and home sales data next. Gold rose 0.23% to $2,939 on safe-haven demand but retreated from a $2,954 high. Traders await S&P Global Flash PMIs. Coindesk Indices, an index measuring broader cryptocurrency market performance was up by 0.02%, with Bitcoin and Ether rising by 2.46% and 0.69%, respectively in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today’s top performer is BERA, which surged nearly 15.8% after The Graph integrated Berachain Mainnet on day one, enabling seamless onchain data access.

Berachain (BERA), founded in 2021, is a Layer 1 blockchain with Proof-of-Liquidity consensus, ensuring security and liquidity while maintaining full Ethereum compatibility. The Graph has 

 support for the newly launched Berachain mainnet from day one. Developers can now query Berachain data using Subgraph Studio, making it easier to organize and access onchain data. This integration enables the creation of fast and efficient frontends for Berachain-powered dapps.

Check Out the Latest Prices, Charts, and Data of 

 is the core currency of Kaito AI’s InfoFi ecosystem, enabling transactions, governance, staking, and community engagement. The total supply is allocated as follows: 56.67% to community and ecosystem initiatives (including ecosystem growth, creator incentives, and liquidity rewards), 25% to core contributors, 10% to the foundation, and 8.3% to early backers. Distribution is merit-based, using AI-driven assessments of engagement, governance participation, and long-term alignment with Kaito’s vision. Staking provides rewards and voting rights, ensuring active participation. A claim process for KAITO will be announced soon.

Yesterday, BTC Spot ETFs recorded a net outflow of $252.8M, including $33.5M from GBTC and $219.3M from non-GBTC funds.

. With $43 million in funding, this presents a valuable opportunity. To maximize your points, complete the "Generate at least one transaction on Sahara Testnet" task by sending a small amount of SAHARA via Metamask. This earns 20 points, a significant amount compared to other tasks. Ensure you take full advantage of this opportunity.

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KAITO Powers the InfoFi Ecosystem with Governance Staking and Community Rewards

DeFi

Investing

Are you looking for upcoming DeFi projects to invest in 2021? Look no further as the article details the top 8 DeFi projects of the year.

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The year 2020 saw a phenomenal rise for the entire crypto industry. In that growth, the industry segment of 

, or decentralized finance, was one of the most prominent contributors.

Decentralized finance is a system that leverages blockchain technology to make the world of finance more accessible. It includes diverse financial applications aimed at removing banking intermediaries or centralized exchanges from the financial system.

 applications, platforms and tokens are revolutionizing the world of crypto-economy and finance in general. In the coming paragraphs, we will study them in detail.

When you use legacy digital payment methods such as credit cards, there remains a bank that has issued you the card to authorize your transaction between you and the seller. In decentralized finance, no such centralized authority or financial intermediary sits between the payer and the payee. Except for the parties involved, no one has the power to stop, pause or record the transaction in the private ledger.

 blockchain as their foundation. Ethereum is more conducive than any other blockchain to building peer-to-peer decentralized applications. What gives this distinct advantage to Ethereum is the self-executing smart contracts. Languages, such as Solidity, are specifically designed to create and deploy these smart contracts.

There are several types of DeFi applications. The most popular ones include decentralized exchanges, stablecoins, lending platforms, wrapped bitcoins and prediction markets. Newly evolving DeFi concepts such as yield farming, liquidity mining, composability, money legos and more enrich these applications.

$110 billion. With more than $18 billion market capitalization, 

 top the chart, followed by LINK ($16.9 billion), WBTC ($9 billion), LUNA ($6.2 billion) and Aave ($5.4 billion). The other protocols whose tokens occupy the rest of the five places in the top 10 list include Avalanche (AVAX), 

 (DAI), PancakeSwap (CAKE) and Maker (MKR).

DeFi applications have expanded the scope of blockchain. Yield farming, stablecoins, lending platforms and several similar derivative applications of DeFi have helped blockchain to become more rewarding and inclusive—and less volatile. Investors are seeing great potential in DeFi, with the billionaire entrepreneur Mark Cuban comparing its growth to that of the

early days of the internet. Cuban himself has invested in multiple DeFi protocols, including

The promise that Cuban sees in DeFi reflects its growth. Even in February 2020, the total value locked in DeFi was hovering around $1 billion. By the end of 2020, the TVL had crossed the mark of $13 billion, registering nearly 2,000% growth over a year.

 It’s a decentralized crypto trading protocol with more than $205 billion in trading volume. The protocol has over

72,000 liquidity providers and more than 200 DeFi integrations. It has so far facilitated around 41 million trades. With features such as token swaps, programmable liquidity, flash swaps and highly decentralized, manipulation-resistant price oracles, it is rewarding for developers to integrate their projects with thousands of tokens and billions in liquidity through Uniswap. 

60% of the UNI genesis supply goes to its community members. This is followed by 21.51% allocated for the team members, 17.80% for the investors and 0.69% for the advisors. UNI tokens have their maximum supply capped at

 stands short for Decentralized Autonomous Organization. MakerDAO runs by leveraging smart contracts executed on the Ethereum blockchain. The platform helps generate Dai, a stablecoin that anyone can use anywhere, anytime. The price of Dai is soft-pegged to the US dollar, and it uses a mix of other cryptocurrencies as collateral. 

The supply-demand mechanism of Dai coins does not come under the purview of the protocol. Dai is not produced by mining, like Bitcoin or Ethereum. Neither does any private company mint Dai coins, according to its issuance policy. What makes Dai unique and decentralized in the truest sense of the term is that any willing user can mint it using the Maker protocol. The total 

 of Dai tokens has crossed the mark of 3.4 billion.

 helps you build your universally connected smart contract. Its decentralized oracle network provides reliable, tamper-proof inputs and outputs for complex smart contracts on any blockchain. Chainlink is revered across the industry for its capacity to empower the future of smart contracts. Several leading DeFi protocols, such as AAVE, Synthetix, Yearn.finance and Celsius leverage the services of Chainlink. It enables the smart chains to access real-world data and off-chain computation, while maintaining the security and reliability guarantees inherent to blockchain technology. The maximum supply of LINK tokens is 1 billion, while the circulating supply hovers a little above

 comes with multiple game-changing features that have the power to radically boost the future of DeFi. It enables cross-blockchain transfer of various types of data or financial assets In addition, it helps to create a custom blockchain using the Substrate framework, thus building the foundation for economic scalability. Polkadot can upgrade without hard forks. Its novel data availability and validity scheme ensures safety for everyone. The governance of the protocol is user-driven in the truest sense of the term. DOT, the native token of the platform, has a total supply of more than 1 billion tokens, with the circulating supply being nearly

UMA is short for Universal Market Access. It helps create synthetic assets on Ethereum in a fast, flexible and secure way so that DeFi users can also access traditional market instruments. Using UMA, you can create tokens that track the price of almost anything. Its economic guarantees ensure that your contract is beyond manipulation. UMA’s minimal on-chain transactions also help increase security and reduce costs. With 11 projects building their synthetic assets on UMA, the total value locked in UMA contracts is nearly

$193 million. The native currency, UMA tokens, have a total supply of a little more than 102 million. The circulation stands at 60 million.

PancakeSwap positions itself as the number one automated market maker on the Binance 

. Using its exchange service, you can buy or sell crypto. PancakeSwap farms allow you to earn by staking liquidity pool tokens. With its pools, you can stake the native token of the platform, CAKE, and earn new tokens. You can “unstake” them at any time with rewards calculations per block. The protocol also offers you chances to win lotteries, and trade in collectibles. At present, the circulating supply of CAKE tokens stands at nearly

 is an open source DeFi protocol built of non-custodial liquidity. It helps earn interest on deposits and borrowed assets. Using Aave, you can deposit or borrow a large variety of assets. These include DAI, USD coin, USDT, BUSD, WBTC and many more. Aave gives you access to a market size of more than

$4.1 billion, growing each day. Aave, the native token of the platform, has a circulating supply of nearly 12.5 million. It has a maximum supply of 16 million.

Popular as a derivative liquidity protocol, Synthetix is the backbone for derivative trading in DeFi. It helps you gain on-chain exposure for a wide range of assets from anywhere. The total value locked in Synthetix has already crossed the mark of $2.4 billion. Users can earn rewards by providing collateral to the protocol. Many platforms, including Kwenta, Drudge, ParaSwap, and several projects and interfaces leverage the liquidity of the derivatives enabled by Synthetix. SNX, the native token of Synthetix, has a total supply of a little more than 215 million. The circulating supply stands at nearly

To buy DeFi tokens, you first need to head over to the exchange you choose. The process of buying DeFi coins will differ depending on the type of exchange: centralized or decentralized.

If you want to buy DeFi tokens from a centralized exchange, you will have to sign up for an account by providing your legal name and email address. You will also have to go through a standard know your customer (KYC) process to activate your account. To complete the KYC process, submit your personal details, banking details and a government-issued identity card.

After KYC approval, head over to the trading interface and select the token that you want to buy. If you want to purchase with fiat currencies, deposit funds in your account.

Enter the amount of the token that you wish to purchase and click on the trade confirmation button.

After you click on the buy button, the fiat amount equivalent to the total value of DeFi coins you bought will be deducted from your fiat wallet on the exchange. 

There is no signup or KYC process on a decentralized exchange. The only things that you will need to buy DeFi tokens from a decentralized exchange are a wallet and enough supported crypto funds to exchange against the DeFi token you wish to buy. 

If you have sufficient funds, connect your wallet and log in via the wallet you wish to trade with. Once you log in, the trading interface of the exchange will appear. Select the token you want to exchange, or select the token you wish to purchase. Select them from the relevant drop-down menu.

Now set up your order by choosing either how much you want to spend, or how much you want to buy, by entering the appropriate figure in the relevant field.

At the end of the order menu, the exchange will show you how much you can expect to receive.

If you are content with the figures you see, complete the order by clicking on the appropriate trade confirmation button.

Is DeFi a Better Investment Compared to Other Tokens?

Although it cannot be said in absolute terms that all DeFi tokens rank the same in terms of their utility and value, some DeFi tokens and protocols prove to be better investments compared to others. This distinction stems from the sheer versatility that the DeFi protocols have to offer. The DeFi space provides loads of opportunities for retail investors to generate passive income. DeFi token holders, for instance, can deposit their funds into liquidity pools to earn more. 

Several protocols benefit their token holders with additional facilities such as reduced fees, improved loan-to-value ratios and staking rewards. The more utilities, the greater is the worth of the token.

DeFi encourages accessibility and inclusion. With intermediaries removed, DeFi transactions enable peer-to-peer transactions where banking services are underdeveloped or inaccessible. Since there is no intermediary to intervene, no risk of blocked transactions or revoked accounts arises. One can lend or borrow instantly from a smartphone.

Built on the layer of Ethereum, DeFi networks have verifiable nodes, making them tamperproof.

DeFi applications are innovative and versatile. They make the entire financial system highly flexible where you can trade in divided assets.

Like any other evolving system, DeFi has its drawbacks, too. The entire domain of blockchain technology is going through shifts. These changes often bring instability to DeFi. For instance, protocols changing their consensus mechanisms pose unforeseen risks to DeFi projects.

The host blockchain may not have enough scalability potential. This often creates trouble for DeFi protocols. Transactions take a long time to complete, and become expensive during network congestion.

Flaws in smart contract codes may lead to the loss of funds from the protocols. DeFi protocols also face challenges relating to low liquidity and low interoperability. However, several new protocols are emerging that tackle these issues head-on.

Will DeFi’s Price Continue to Rise in 2021?

Users finding easy and intermediary-free access to loans, insurance, margin trading, exchanges and yield farming will help DeFi to grow in 2021. Several eWallets, the backbones of blockchain transactions, are rising to the challenge to ensure secure, transparent and easy access to funds. The wide range of utility features of these protocols encourage newer investors to join in, and existing ones invest heavily. As a result, a surge in liquidity and trading volume will help DeFi’s prices to rise in 2021. 

A preview of this expected rise is already evident. Let’s compare the monthly trading volume of some of the decentralized exchanges. On April 1, 2020, the monthly volumes of 0x Native, Synthetix, Curve, Uniswap and dYdX were approximately $121 million, $34.5 million, $38 million, $170 million and $123 million, respectively. Within a year, these five DEXs rose to nearly $2.2 billion, $191 million, $4.7 billion, $21 billion and

To reach their maximum potential, the leading DeFi protocols would have to work more on interoperability. They would need to pose a coordinated front in order to become a challenger to the traditional banking system or centralized exchanges. Easy accessibility, enhanced inclusion, autonomy, transparency — these are some of DeFi’s most enticing advantages. The only thing that needs to be done at this moment is for the leading exchanges and protocols to increase their coordination.

Top 8 DeFi Crypto Projects to Invest in for 2022

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards