Defy’s bull market defies expectations with RWAs and ‘recurring airdrops’

It may only be April, but it's already been quite an event for crypto.

In January, the United Securities and Exchange Commission (SEC) reluctantly approved the location of Bitcoin (BTC) exchange-traded funds (ETFs), while the fourth Bitcoin halving event recently dominated the news.

In non-Bitcoin news, Ethereum launched its Denkun update in March, improving its integration with Layer-2 blockchains.

So what is decentralized finance (DeFi)?

In the year In December 2023, Cointelegraph asked industry experts to predict the future of DeFi in 2024. One of the experts we spoke to was Kevin de Patul, the CEO of crypto market creator Keyrock.

At the time, de Patul pointed to US Treasurys (T-Bills) and other real-world asset tokens (RWAs) as significant trends. Amidst the market's upswing, Cointelegraph caught up with de Patol to ask if DeFi is progressing as expected:

“We see real-world assets on the chain,” confirmed de Patul. “The T-Bills were a huge success last year. Things continue to grow, but less so because the stories are less compelling. We continue to see that story unfold. We are on the way but it will take a long time.

BlackRock's U.S. Dollar Institutional Digital Liquidity Fund (BUIDL), launched in March, is one example where De Patul stands out as being on trend, featuring the integration of real-world assets and stablecoins. BUIDL aims to provide a stable price of $1 per token while paying a daily accumulated dividend to investors' wallets at the end of every month.

De Patol mentioned the PV01, which recently released its digital native booking on April 8.

But for de Patol, these examples of “baby steps” lead to a big change where every asset will eventually go digital. De Patol says these changes will take time to fully materialize.

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“It's not something I see happening in a year,” de Patul said.

As de Patol explains, “Crypto is a proof of value represented by digital,” and if the past 15 years have shown the effectiveness of that proof-of-concept, the next 15 will be about expanding the franchise.

“Where will we be in 15 years – what will the world look like when all assets are on the chain?”

It's a question that requires unusual long-term thinking in an industry where many participants are notoriously impatient.

More than expected in DeFi

Asset tokenization is a widely predicted trend, but Edward Jubani Tur, the founder of the eternal trading ZKX, still finds some surprises in the details.

“We've spent years talking about crypto going into the real world, and actually, the real world came into crypto,” Tur told Cointelegraph.

“RWs are happening, and they're happening in chains on major networks,” Tur said. I think this shift is very different from what the entire industry has been working on for the last ten years, which has traditionally allowed for blockchains and specialized infrastructure built for institutions.

Tur explained, “What we're seeing right now are institutions realizing that these decentralized networks fit their risk criteria and deploying directly to Ethereum and other networks.

According to Tur, this is an “incredible achievement for the industry” and something that could not have been predicted just a few years ago.

The evolution of DeFi

Danny Chong, founder of yield-enhancing asset tracker Tranchess, believes 2024 is realizing the predictions of 2023 – especially when it comes to RWAs.

Similarly for Tur, Chong points to the convergence of “crypto into the real world, the real world into crypto,” and told Cointelegraph that “DeFi is evolving.”

“Crypto is now being invested in or viewed with interest by financial giants, like Fidelity, like Blackrock, banks and so on.”

For Chong, the spot Bitcoin ETFs are another example of this convergence, but they won't be the last. In fact, traditional finance and crypto are becoming increasingly intertwined.

Chong admits to being surprised at the speed at which “centralized def” has emerged and accelerated as a trend, even though the concept seems counterintuitive.

“People are realizing that having some centralization in DeFi might not be a bad thing. It's becoming more acceptable as time goes by. So now we have DeFi protocols that have some element of centralization,” Chong said.

Some extreme Diff users have come to appreciate the fact that it might not be such a bad thing after all. At the end of the day, what people in DeFi – or in the real world of finance – want is to protect their money first and returns second.

So while it may hurt the idealism of the sector, centralization will continue to rise in DeFi.

A good idea doesn't last.

Tur represents another area where reality erodes idealism.

In the year In December 2023, the crypto market was under the control of a long winter, but as April came to an end, the market turned violent again. Tur believes the psychology of the bear cycle will be reflected in industry forecasts in December 2023.

“It's an interesting situation because during every bear market, people think that's where we're going, and excuse the language,” Tur told Cointelegraph.

It is often said that a bear market is a construction period. Tur explains that it's time for good causes and to see the best in the market. But when the bull starts to beat the bear, those good thoughts are easily forgotten.

As Tur puts it, “Every round we get in the market, we prove ourselves wrong, and we go back to our old shenanigans – but with a lot more energy.

“We're back to what I call ponzinomics, which is probably the law of gravity in crypto. How do you store and distribute incentives in a way that motivates users to come and use different protocols?

The market's preferred solution this time around is what Tour calls “recurring airdrops.”

Tur explained, “The idea of ​​recurring airdrops is that you can use different platforms, and each platform gives you points or eligibility for airdrops from other third-party platforms.

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In this new example, placing Liquidity on a protocol makes you eligible for multiple airdrops. The issue with airdrop hunters is that the rules for airdrop qualifying aren't always clear or announced in advance, making the sport a form of educated guesswork.

Similarly, picking a winner with layer-2 can be challenging. “He says he's ready for a Cambrian layer-2 explosion, and as we've seen in crypto in the past, 90% of them will disappear or disappear,” Tur says.

But for developers and weather hunters, this gambling spirit of a bull market creates optimism.