The Economist: The DeFi market battle is heating up

For believers, open public blockchains offer a second chance to build a digital economy. The fact that applications built on these blockchains collaborate and the information they store is visible to everyone recalls the idealism of the early architects of the internet, before most users embraced it The "walled garden" provided by the tech giants. Over the past year, as applications built on various blockchains have flourished in scale and functionality, a new "decentralized" digital economy has become possible.

Perhaps the most important part of this digital economy are decentralized finance (DeFi) applications that enable users to trade assets, obtain loans, and store deposits. Now, the battle for market share in this area is intensifying. On top of that, Ethereum, the leading DeFi platform, appears to be losing its near-monopoly status. The race shows how DeFi has been affected by the standards wars that have erupted in other emerging technologies—think Sony’s Betamax and VHS tape battles in the 1970s—and also illustrates how DeFi technology can be lightning-fast. progress at a similar rate.

The idea behind DeFi is that blockchains — databases that are distributed across many computers and kept secure by cryptography — can help replace centralized institutions like multinational banks and technology platforms. The value of assets stored in this nascent financial system (DeFi) has climbed from less than $1 billion in early 2020 to more than $200 billion today,