DeFi has seen tremendous growth in recent years, with the total value locked in DeFi protocols reaching over $120 billion as of July 2021. The main reason for this growth is that DeFi offers a new way to access financial services, which is cost-effective and inclusive. DeFi allows anyone with an internet connection and a digital wallet to access financial services, which was not possible before.
One of the main reasons why DeFi is gaining popularity among investors and entrepreneurs is that it provides an opportunity for innovation. DeFi allows developers to build new financial products and services that were not possible in the traditional financial system. The ability to create new products and services has attracted many entrepreneurs to the DeFi space, and many investors are also interested in investing in DeFi projects because of the potential for high returns.
DeFi is also gaining popularity among investors because it offers a transparent and secure way of investing. Traditional financial institutions often have opacity in their operations, which can make investors uncomfortable. However, DeFi is built on blockchain technology, which is transparent and secure. Investors can see all transactions happening on the blockchain, which adds a level of transparency and trust to the system.
Another reason why DeFi is growing in popularity is that it offers higher interest rates than traditional financial institutions. The traditional banking system offers low-interest rates, which means that investors’ returns are meager. However, DeFi protocols often offer high-interest rates that are attractive to investors.
Finally, DeFi is gaining popularity among investors and entrepreneurs because it is permissionless. Anyone can participate in DeFi, which means that people in countries where access to financial services is limited can also access DeFi. This inclusivity has attracted many individuals to the DeFi space, and many entrepreneurs are building products and services to cater to this market.
In conclusion, DeFi is gaining popularity among investors and entrepreneurs for several reasons. DeFi offers a new way to access financial services that is cost-effective, inclusive, and innovative. DeFi offers higher interest rates, transparency, security, and permissionless access, making it an attractive alternative to traditional financial institutions. As the DeFi ecosystem continues to evolve, we can expect more investors and entrepreneurs to enter the space, leading to further growth and innovation.