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Home Business & Finance How does DeFi reach mass adoption?

How does DeFi reach mass adoption?

Document Analysis NLP IA

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objective
redaction

Subjectivity0.44550685425685
probably it's an affirmation
Affirmation0.40880503144654

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Summary (IA Generated)

A report on Friday from Ethereum metrics website Dune Analytics showed that the decentralized finance (DeFi) ecosystem now counts over 1 million unique Ethereum addresses as participants — an over tenfold increase from the 91,000 addresses on Dec.

The Dune Analytics report, compiled by aggregating the total number of addresses which have ever utilized popular DeFi protocols such as Uniswap, Compound, and Aave, noted that their calculations interpret “users” as “unique addresses,” meaning that the millionth address mark might not be as bullish as it seems at first blush.

So how will DeFi truly reach a million users and beyond? Flynn explained that the first step in attracting a larger number of unique users will be a “killer application focused around speculation” similar to CeFi trading platform Robinhood, which enjoyed a remarkable boom in participation during the Covid lockdowns.

Over the long term, however, finding ways to incentivize users to participate in governance and infrastructure-layer elements of DeFi is what will lead to sustainable success.

“Many users understand how to trade tokens on Uniswap or an aggregator, but don’t understand how these protocols work under the hood,” he said.

”.

“We need users going further down the rabbit hole and moving from speculators to participants in an open economy.

To this end, Flynn revealed that Rabbithole has “several” campaigns planned with leading DeFi platforms to incentivize richer protocol participation from users in exchange for governance tokens.

Encouraging users to become more active actors in the DeFi landscape is one promising step towards adoption, but another may be attracting different kinds of users altogether.

Patrick Rawson, a co-founder at DAO engineering and blockchain experimentation outfit Curve Labs, says that the current user experience in DeFi is tailored to a very specific demographic.

“The people who are using these mechanisms, they skew male, they skew younger, they skew wanting to earn profit , they skew towards being technically savvy,” said Rawson.

“This profile of user is going to demand whatever makes them the most profit.

If DeFi truly wishes to “bank the unbanked” and reach “the last mile” of users, they might have to contemplate new outreach strategies, argues Rawson — one which better empowers users to seek their desired outcomes.

Is this user going to want profits at the expense of everything else? .

Flynn agrees that focusing on profits above all else might be a restrictive way to preach the gospel of DeFi.

The manner in which current participants in the ecosystem discuss DeFi with friends and family will also play an important role in building towards the future:.


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