CrossFi Analysis: DeFi Trends of 2024

The DeFi market revenue is projected to reach $26,170.0m in 2024. With a projected annual growth rate of 9%, the DeFi industry will be worth well over $37,040 M by 2028. Several factors propel the growth of the DeFi market. These include escalating demand for decentralized financial services characterized by accessibility, transparency, and inclusivity surpassing traditional finance. Furthermore, the adaptability and programmability of blockchain technology enable the inception of financial instruments and services previously inconceivable. The availability of decentralized lending, borrowing, and trading platforms further fuels DeFi’s expansion, empowering users to engage with financial markets in a decentralized and permissionless manner.

Looking ahead, the DeFi market is poised for continued expansion. Anticipated drivers of this growth encompass the ongoing development of new DeFi applications and use cases, mainstream investor adoption of cryptocurrencies, and the continual emergence of fresh DeFi platforms and protocols. Nevertheless, the market is likely to encounter challenges such as regulatory ambiguity and security apprehensions, potentially impeding its growth in the future.

George is the Defi Strategy Lead at CrossFi and has been working in Web 3 since 2019. I sat down to talk about the state of the DeFi market today and what's expected in 2024. Here are the top trends he thinks will be pivotal to the adoption and growth of blockchain technology in 2024.

1. Regulators warming up to crypto

As the Bitcoin ETF was approved late last year, it created a rush of new buyers into the crypto market. These new buyers are financial systems comfortable with purchasing ETFs rather than purely deFi assets. This rush of new capital and buyers brings legitimacy from the regulatory side because established firms and banks are putting money toward crypto. After the lessons learned from past failures like FTX, regulators are more open to the wide adoption of crypto through established channels.

2. LSDeFi

The Capella upgrade in Ethereum’s proof of staking consensus layer enabled staking withdrawals, providing users with the opportunity to finally withdraw their assets after staking. Liquid staking has sparked new life into the market as new investors are drawn to this trend. EigenLayer, a protocol built on the Ethereum blockchain, empowers users to actively borrow Ethereum’s security offerings and validate new applications on the network, thereby strengthening the overall integrity and resilience of the Ethereum ecosystem. It's revolutionary because at its launch in June 2023, EigenLayer’s total value locked (TVL) was $13.3 million and by September of 2023, the TVL was $226.5 million. They have fueled adoption and new investment through innovation and robust technology.

3. Cross-Chain Integration

The past years have seen competitive projects spring up, but the future looks more cooperative. Infrastructure companies are creating tools like oracles and APIs for interoperability and integrations across chains. It is very promising to see projects taking a step towards opening doors within the blockchain ecosystem.

4. Technology Talks

As experienced investors look towards Web 3, the projects to get funding will have strong technology and not just an idea they are pursuing. Investors expect to see a built-out proof of concept; only the strongest tech will survive their due diligence.

5. Crypto Events

The past 2 years saw a drop in event participation because of the bare market. This year excitement is high, and the number of crypto events taking place has doubled. Hackathons are full of hundreds of developers working hard to crack the tough challenges in Web 3 and make a name for themselves in this space. Many projects are expected to make big announcements at crypto events this year, so it is important to follow what is happening on the road.

Summary

Web3 is now in a bull market, but past years have taught users, investors, innovators, and regulators some hard lessons that make them well-equipped to take advantage of the new interest in the space and make some world-changing products, with CrossFi being one of them.