The crypto industry has already seen significant developments in 2024. The SEC reluctantly approved spot Bitcoin exchange-traded funds (ETFs) in January, and the recent Bitcoin halving event has been a major topic of discussion. Ethereum also made strides with its Dencun upgrade in March, enhancing its integration with layer-2 blockchains. But what about decentralized finance (DeFi)?
Back in December 2023, Cointelegraph asked industry experts to predict the future of DeFi in 2024. Kevin de Patoul, CEO of crypto market maker Keyrock, highlighted the tokenization of U.S. Treasurys (T-Bills) and other real-world assets (RWAs) as notable trends to watch. Cointelegraph recently caught up with de Patoul to see if DeFi was progressing as he expected.
De Patoul confirmed that more real-world assets are being brought onto the blockchain. T-Bills were particularly successful last year, although growth has slowed down due to less attractive rates. Nevertheless, de Patoul believes that this trend will continue, but it will take time to fully unfold.
De Patoul mentioned BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) as an example of the convergence between tokenized real-world assets and stablecoins. BUIDL aims to maintain a stable value of $1 per token and pays daily dividends to investor wallets at the end of each month. Additionally, over $1 billion in U.S. Treasurys have been tokenized.
De Patoul also mentioned PV01, which recently issued its digital native bond. However, he emphasized that these examples are just the beginning of a larger transformation where all assets will eventually be digitized. De Patoul believes that this transformation will take time to fully realize.
The tokenization of assets was a widely predicted trend, but it still surprised Eduard Jubany Tur, founder of perpetual trading exchange ZKX, due to the level of real-world adoption. Tur mentioned that institutions have realized that decentralized networks meet their risk parameters, leading them to directly deploy on Ethereum and other networks. This achievement was not anticipated a few years ago.
Danny Chong, founder of yield-enhancing asset tracker Tranchess, agrees that the predictions made in 2023 are being realized in 2024, particularly regarding RWAs. Chong sees the convergence of crypto and the real world as a significant development in DeFi. He also noted that centralized DeFi has emerged as a trend, demonstrating that some element of centralization may not be a bad thing. Ultimately, people in DeFi want the protection of their money and returns.
However, Tur pointed out that there are areas where reality erodes idealism. During bear markets, there is a tendency to believe that good intentions and positive changes will prevail. But when the market turns bullish, those intentions are often forgotten, and old habits resurface with even more energy. In this bull market, the market has embraced “recursive airdrops,” where depositing liquidity on a protocol can make one eligible for multiple airdrops. However, the rules for airdrop qualification are not always clear, making it a form of educated guesswork.
Tur also warned of the influx of layer-2 solutions, predicting that many of them will fade away or disappear, as has been the case in the past. Nevertheless, developers and airdrop hunters are willing to take the risk and embrace the gambling spirit that comes with bull market optimism.