The Cryptocurrency Space: Taking Off Into New Orbits

Like so many areas of technology, the cryptocurrency space is developing at light speed.

Almost nothing has drawn more attention in the cryptocurrency community than the advent of DeFi (Decentralized Finance) applications.

The concept basically involves traditional financial transactions that take place on the blockchain.

These transactions are typically enabled by the use of smart contracts.

And, unlike traditional payments or transfers, they avoid the need for financial intermediaries altogether.

DeFi transactions usually range from traditional lending to the creation of derivatives.

DeFi Pulse reports that the Total Value Locked (TVL) – a measure of the total value of cryptocurrencies that are committed to a smart DeFi contract – grew from $2 billion to $15 billion in 2020.

And 2021 brought unprecedented TVL growth, ending the year at just under $100 billion.

One of the most popular recent DeFi applications has been yield farming, which involves lending crypto assets to other platforms in return for interest or new cryptocurrencies.

Analysts believe that another interesting development in the crypto space is the rise of non-fungible tokens (NFTs). These tokens basically represent digital claims to a unique thing or asset. The item they represent can be digital or physical.

NFTs went relatively mainstream in 2021. And are likely to remain a large part of the crypto landscape moving forward.

Fungible tokens – like bitcoin – do not necessarily represent any claim to an asset or physical thing.

They can be traded and divided into smaller pieces.

NFTs, on the other hand, represent claims to things like domain names, physical or digital artwork, collectibles, and video game add-ons.

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