The crash won’t kill DeFi – instead, it creates a solid base for strong projects to thrive in the future.
DeFi projects on Ethereum such as MakerDAO, Aave, and Uniswap, among others, may have different directions and goals, but they are united in their goals to survive the bear market and bring their blockchain-powered offerings to the masses.
The Crypto Spring Will Come
The prominent lending protocol Aave is planning to develop a decentralized stablecoin that supports collateral loans and is pegged to USD on Ethereum. The team called it GHO and the plan was already proposed to DAO.
Stablecoin development is a risky bet, especially after a series of project collapses exposed by the iconic USDT.
While Aave chases the promise of decentralized stablecoin, according to its belief in the role of a stablecoin in Web3, the plan could attract plenty of derision since the term “stablecoin” still reminds us of an underwhelming event.
Many Connections Will be Made
MakerDao, on the other hand, is mulling a proposal to collaborate with traditional finance.
The decentralized stablecoin issuer, known for stablecoin DAI, seeks approval to integrate a Pennsylvania-based bank – Huntingdon Valley Bank – into its lending services.
If passed, it will be the first traditional financial institution to take out a loan from a DeFi protocol. The agreement with the bank will also assist the platform in issuing real-world asset loans directly to borrowers.
The proposal came a few days after the protocol voted in favor of investing 500 million DAI in U.S. treasury bills, aligning more closely with traditional finance.
NFTs Are Still a Thing!
Unlike MakerDao and Aave, Uniswap turns to non-fungible tokens (NFTs) despite the bear market. Uniswap Labs previously acquired an NFT market aggregator platform for an undisclosed amount. This is seen as a positive move amid the current crypto market turmoil.
With this acquisition, the firm seeks to enable DEX to integrate NFT stores into its web application and integrate NFTs into its developer APIs and widgets.
The goal is to empower the Uniswap platform, making it a one-stop destination for Web3 users and developers.
Ethereum co-founder Vitalik Buterin suggested the Uniswap protocol should become a price oracle token for stablecoins in order to enhance its utility and foster the Ethereum stablecoin ecosystem.
Buterin’s proposal is currently the topic of discussion at the Uniswap governance forum. Perhaps a stablecoin-enabled future, apart from NFT, is also a noteworthy point in the coming plan of Uniswap.
Despite the ongoing development, the DeFi protocols are taking everything slow. The understandable reason is the market crash, giving no single project a chance to pump.
Compared to the same period last year, the DeFi market has been on a decline. The governance tokens of Aave, MakerDAO, and Uniswap are all a far cry from their all-time high and recovery will definitely take a while.
The global financial crisis, together with the ongoing downtrend, could push the market to a worse scenario despite recent achievements in governance.
Crypto Users Are Patient
Mercuryo recently revealed that market volatility does not drain investors’ patience. The cryptocurrency wallet recently conducted customer research, and the key findings revealed that users are diversifying their holdings.
So it’s not a complete exit; they’re restructuring… their investing strategy and waiting patiently to return.
It’s a good indicator, especially given the market’s recent gloomy news about Terra’s collapse and bankruptcy filings from large crypto lending sites.
“Despite average balances of BTC in wallets having fallen by almost 30% since the outset of 2022, the balance of stablecoins has actually increased, and in fact, average USDT holdings are up +40%,” said Petr Kozyakov, CEO of Mercuryo.
Furthermore, Mercuryo’s consumer research shows that 35% of UK citizens possess cryptocurrencies, and 52% plan to do so soon.