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Defi has been a leap for financial and income generating platforms. Recently, Luna's fall has shaken faith in cryptocurrency and defi, but the truth is that defi is a more accurate lending and borrowing medium than the banks due to smart contract technology.
I was first exposed to defi through Compound Finance and AAVE. The returns I gained when investing in pools was beyond what I considered possible at the time. Loaning my cryptocurrency to the platform enabled me to gain daily interest and cut out the middleman. Defi gives us a return closer to what our investment is worth because the return is mediated by a smart contract, and not a man in a suit from a major bank.
Defi has made an indellible mark on the cryptocurrency space. The concept of a financial product that is not centralized under a large investment firm or group is a new concept. Large investment houses do not have a say in the space, and lenders are met with borrowers on the Blockchain in asset based exchanges. In essence, the middleman has been automated and removed to a large extent. Smart contracts make defi a great leveler.
The recent Luna cryptocurrency collapse was a blow to the cryptocurrency industry and defi in general. Established cryptocurrency defi platforms including Curve, Compound and even staking wallets like Nexo have been scrutinized after the fourth largest cryptocurrency at the time tanked. Defi will continue to exist, but the stain of Luna's fall and it's stablecoin that depegged is wearing on defi. At the end of the day, a currency is worth as much as the faith we give it, but defi will continue to persist.
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