Consumers find more use cases onchain, devs face challenges: Solana Foundation

Derek Andersen3 hours agoConsumers find more use cases onchain, devs face challenges: Solana FoundationDecentralized finance is becoming more things to more people. That’s not easy to do.1220 Total views2 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksLife is getting harder for developers of decentralized finance (DeFi) protocols. Emerging use cases that appeal directly to consumers are offset by inconsistent regulation and cutthroat competition, the Solana Foundation concluded in a newly released report.

Solana’s overview presents a detailed but concise history of DeFi’s evolution. It traced the growth of blockchains from simple digital currency exchanges to complex ecosystems that provide opportunities for lending, borrowing, yield generation and more, thus creating a DeFi consumer market. The introduction of stablecoins was a turning point. “It is no exaggeration to say that stablecoins have turned out to be one of the main ‘killer applications’ of crypto so far,” the report stated.DeFi’s growth pains

The report considers the barriers to DeFi expansion along with its increasing use. It mentions unstable demand, unsustainable incentive structures, ineffective governance models and security risks among them. The role of the hostile US regulatory environment is also examined.

Related: Analyst tips Solana ETF deadline for mid-March after new filingsMakerDAO"s architecture shows the complexity of app design. Source: Solana Foundation

Technical differences emerged between blockchains, leading to specialized use cases for the chains and competition for users. Blockchains with a large existing user base and those with the lowest fees will appeal to different developers, Solana noted. Innovation can have a downside:“In many cases, users eventually become overwhelmed by the sheer number of possible apps to choose from or distrustful of on-chain apps overall. […] It has also become harder for existing users — much less everyday people — to find significant, sustainable value when interacting with DeFi apps.”DeFi has a bright future

Diversification and the development of “super apps” have benefitted blockchains. Uniswap’s acquisition of Crypto: The Game and Solana’s launch of the Bond customer loyalty platform are examples of the former. Blockchain’s movement into social media is as well. The TON chain’s rapid development embodies both of those trends.Source: Solana

Solana concludes that the development of DeFi has been “rapid and dramatic.” It is creating new markets and penetrating existing ones:“Emerging trends point towards greater integration with existing Web2 infrastructure, improved user experience, and bespoke approaches to fostering social interactions and user loyalty.”

The report continued that developers can expect competition to intensify as existing challenges become more acute, and their choice of blockchain will become more crucial for success.

Magazine: What do crypto market makers actually do? Liquidity, or manipulation# Blockchain# DApps# Social Media# DeFi# SolanaAdd reaction