Prediction 4: The DeFi industry will continue to grow but meets regulations.
The DeFi industry grew in 2021, with a significant increase in TVL of 370%. In 2021, multiple outstanding projects have been launched, and as highlighted in the previous prediction, DeFi experienced a substantial inflow of new users. Additionally, the innovation within the DeFi industry is significant due to a competitive market whereby the profit margins are relatively high.
The regulation of stable coins and DeFi protocols is slowly starting but is not a substantial framework. Due to that, constructing regulatory frameworks is time-consuming; we do consider this an ongoing process. Each year, legal components will be added until there is a solid foundation, which will be utilised as a policy framework.
We expect the DeFi industry to grow in 2021, shifting to a new 'unbanked' audience. However, this only can happen if DeFi products can be utilised without a financial constraint (e.g. high transaction fees).
