Defi 2.0

Credit: Finematics

Why does DeFi 2.0 matter?

Let’s first briefly see what DeFi 1.0 is and what it solves, etc.

Major players in DeFi 1.0 :

- DEX (Uniswap, curve)

- Lending and borrowing ( Aave, compound)

- Yield optimisers (Yearn, convex)

- Insurance (Nexus)

Solutions offered by DeFi 1.0 :

- Lending and borrowing

- Yield farming

- Swapping tokens (ETH to LINK, etc)

- Synthetic assets

Technologies used by DeFi 1.0:

- Smart contracts, Blockchain

- Oracles( Chainlink, API3, etc)

- AMM (Automated market makers)

Main problems in DeFi 1.0:

- Liquidity

- Capital efficiency

- Centralization

Yield farming is a great DeFi 1.0 concept but it does not solve liquidity problems in the long run

Overview of DeFi 1.0 (Credits: alphapoint.com)

Enter DeFi 2.0

What DeFi 2.0 solves:

- Introduce new finance technologies

- Improve capital utilization

- Add long term liquidity to DeFi 1.0

Major players in DeFi 2.0:

• Abracadabra
• Olympus
• many other forks of olympus including Klima, wonderland, etc

Olympus is a major DeFi 2.0 protocol (Credits: medium.com)

DeFi 2.0 is still evolving and we may see many protocols in the future!

If you have any questions, regarding this article, comment below your questions and I will respond to it ASAP!