DeFi 2.0: The Evolution of Decentralized Finance
De centralized finance (DeFi) has emerged as a revolutionary force in the financial landscape. By leveraging blockchain technology and smart contracts, DeFi offers a glimpse into a future where financial services are permissionless, transparent, and accessible to everyone. However, the first generation of DeFi protocols faced limitations, particularly around usability and liquidity. Enter DeFi 2.0, the next iteration aiming to address these shortcomings and usher in a new era of financial innovation. DeFi 1.0: Laying the Foundation DeFi 1.0 established the core functionalities that define the space. These include: Lending and borrowing: DeFi protocols like Compound and Aave allow users to lend and borrow cryptocurrencies without relying on traditional financial institutions. Users earn interest on their loaned assets and can borrow funds at competitive rates. Decentralized exchanges (DEXs): DEXs like Uniswap and SushiSwap facilitate peer-to-peer trading of cryptocurrencies, eliminat...