There have been a lot of Central Banks’ plans to establish their own, virtual currencies (corresponding to the currencies they now own), but with the crypto segment already full of market successes, they already could be too late to do so. But maybe somebody else has already succeeded at it?
DeFi was backed by Coinbase
In January 2020 Coinbase published a piece about the DeFi (Decentralized Finance). It covered the different types of apps and dapps, and other structures based on smart contracts. At the time of writing the blog, users have already deposited cryptocurrencies worth $600 million into the mentioned smart contracts.
That was even before the pandemic destabilized the global economy, and had produced sometimes weird scenarios. Some companies started to boom, with Tesla being the prime example of that. But as their rapid growth started to slow down, DeFi began an impressive rise.
DeFi Pulse announced that there was $11.23 billion of the total value that was locked in the company in October 2020. And as you can imagine, that amount is growing. At the time a big chunk of it was traded on DEXes (the decentralized exchange platforms), with the biggest one being Uniswap (almost 25%)
Uniswap works only on smart contracts, and the platform lets you trade tokens directly from the wallet. You can become something of a liquidity provider too, by supplying the crypto to the platform and receiving a share of the fees. Automated Market Making is an innovation that automatically settles your trades.
It was just a matter of time for Coinbase. They got involved and helped to create the Stablecoin - the USD coin which is always worth the same as USD is. It allows everybody to hold USD assets, but virtually. By July 2020 its Market Cap reached $1 billion. What will be next?
To find out more about Stablecoin and DEX, feel free to read Andy Samu’s Disruption Banking piece. To access it, simply use the link: https://disruptionbanking.com/2020/10/20/defi-dapps-and-dex-the-new-world-of-the-stablecoin-you-need-to-know-about/.
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