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DeFi is growing fast.

We imagined DeFi expansion “horizontally” in the balance sheet and “vertically” in interest rate market about three months ago. In less than a quarter, many ideas and predictions that were once daring are being tested quickly.

As interest-bearing underlying or synthetic asset classes become richer, more and more lending protocols begin to support all kinds of LP Token collaterals, a diversified DeFi financial system is becoming systematic and multi-dimensional.

Still, DeFi can never grow without assets, and we see three main ways to generate excess returns: leveraging, expand durations, and bring in new types of credit.

So as the second half of our last article, here is

If credit creation and balance-sheet expansion are DeFi’s “horizontal expansion”, the tools and ways to enrich the DeFi market to leverage is a “vertical expansion” — as underlying assets become more complex, the asset-end of the DeFi protocols will face more demand for fixed-term and fixed-rate financing. …

Andre Cronje’s recent announcement of the acquisition of Pickle Finance, C.R.E.A.M., COVER Protocol, and Sushiswap, four of the best-known DeFi protocols, has attracted market-wide attention. When industry pioneers start consolidating their market positions through mergers and acquisitions, we have always wondered if DeFi is becoming over-crowded, or growth is slowing down and the market is being carved up by big players.

“Is it possible for DeFi to continue to grow?

We are very optimistic about the answer to that question. The reason why we are optimistic has to start with the real change brought by DeFi.

“Asset” is of…

DeFi is a Big Thing, but we’ve only just glimpsed a corner of the Holy Grail.

To understand the meaning of DeFi — decentralized finance, in a narrow sense, is “using decentralized networks to transform traditional financial products into a disintermediated, trustless, and transparent protocol”. We think the more ambitious vision of DeFi is to realize a “universal market access”, which allows anyone in the world with access to the internet to own or trade any financial assets openly.

From the recent explosion in DeFi market, we can see some significant features. From DEX, stable coin, leveraged lending, synthetic assets…

Incuba Alpha Labs

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