Everything to Know about DeFi 2.0

TLDR;

  • What is even DeFi 2.0? Then what is DeFi 1.0?
  • The problem and solution
  • Avalanche Network, the future of DeFi?
  • DAOventures Avalanche Index Funds

WHAT IS DEFI 2.0?

As the name suggests, DeFi 2.0 is the second stage of the decentralized finance ecosystem. The aim of DeFi 2.0 is to solve the issues inherent in the first wave of decentralized finance infrastructures.

  • Liquidity — Liquidity is the ability to exchange between currencies easily.
  • Centralization of Authority — So far, the only central authority DeFi has avoided is government. The platforms are still governed by centralized teams that decide on features, policies, community leadership, etc.
  • Security and Oracle Attacks — DeFi’s heavy reliance on blockchain oracles can be a strength and a weakness. Not integrating with reliable oracles opens some DeFi protocols to attack. In the advent of an attack, the platform will have a hard time compensating losses.

HOW DEFI 2.0 SOLVES THE ECOSYSTEM’S PROBLEMS

  • Scalability — DeFi 2.0 promises to reduce gas fees. With a reduction in gas fees, it becomes easier for users to maximize the benefits of DeFi. As a result, the development of an alternative infrastructure to Ethereum, Avalanche, is justified.
  • Liquidity — DeFi 2.0 aims to solve the problem of liquidity by helping users earn yields. As of now, the total value of the DeFi ecosystem is at $235 billion. With more projects creating more value, the sector is bound to onboard more users and capital.
  • Centralization of Authority — Creating Decentralized Autonomous Organizations (DAO) for DeFi platforms solves the centralization problem. When DAOs begin to function fully, everyone has a voting right on decisions across the platform.
  • Security and Oracle Attacks — Security remains a major issue for DeFi 1.0. However, with the fully decentralized approach of DeFi 2.0, it becomes near impossible to compromise any part of the financial infrastructures, from the dApps to the blockchain oracles.

THE FUTURE OF DEFI?

Beyond solving the problems of DeFi 1.0, the second wave of decentralized finance promises to contribute to solving the world’s environmental menace. For instance, DeFi 2.0 promises to promote sustainable and healthy cash flow.

FOLLOWING THE HYPE OF DEFI 2.0, AVALANCHE NETWORK

Avalanche is one of the smart-contract blockchains, which focuses on increasing transaction speed while being eco-friendly and low cost. The avalanche platforms solve the problem plaguing DeFi 1.0 in one sweep. In addition, the platform provides scalability, sustainability, liquidity, decentralization and security.

HOW TO GET THE MOST PROFIT ON AVALANCHE

The DeFi 2.0 wave is coming faster than many had imagined, and the avalanche platform is at the vanguard of it.

RECOMMENDATIONS TO DAOVENTURES AVALANCHE INDEX FUNDS

DeFi 2.0 promises to be better, with speed at the core of everything it offers. The avalanche network contributes immensely to DeFi 2.0, which has seen the platform rise quickly in valuation. You can get started with the platform by learning more about the Avalanche ETF Index Fund by DAOventures.

About DAOventures

DAOventures is a DeFi ETF Index Fund for fund managers and crypto investors. Its mission is to make DeFi simpler, more accessible, and inclusive. DAOventures provides baskets of auto-compounding LPs, upon innovatively designed crypto ETF index funds.

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DAOventures

DAOventures

DeFi ETF Index Fund, basket of auto-compounding LPs