History Of DeFi — From Inception To 2021 And Beyond

Bitcoin

The first of them was the creation of Bitcoin in 2009 by Satoshi Nakamoto.

Ethereum

Although sending Bitcoin around the world is cool — finance doesn’t stop there. Every robust financial system needs a set of other important services such as lending, borrowing, trading, funding or derivatives.

Maker

This leads us to one of the oldest DeFi projects on Ethereum — Maker.

EtherDelta

Another project worth mentioning that was really popular in 2017 was EtherDelta.

ICOs

Also during 2017, one of the first big use cases for Ethereum — ICOs — became prevalent.

  • Aave — lending and borrowing
  • Synthetix (previously known as Havven) — a liquidity protocol for derivatives
  • REN (previously Republic Protocol) — a protocol for providing access to inter-blockchain liquidity
  • Kyber Network — an on-chain liquidity protocol
  • 0x — an open protocol that enables the peer-to-peer exchange of assets
  • Bancor — another on-chain liquidity protocol

Before COMP

On the 2nd Nov 2018, the initial version of Uniswap was published to the Ethereum mainnet. This was the culmination of over a year’s worth of work by its creator Hayden Adams.

Black Thursday

On 12th March 2020, the price of ETH sharply dropped by more than 30% in less than 24 hours as a result of fears over the global pandemic.

DeFi Summer

The main catalyst for DeFi Summer was the liquidity mining program of COMP tokens launched by Compound in May 2020.

DeFi Winter

DeFi’s parabolic ascent was, of course, not sustainable long term. The market sentiment quickly changed at the beginning of September 2020. Major DeFi tokens started sharply losing their value. The yields from liquidity mining that are derived from the value of the distributed tokens also became lower and lower. The DeFi Winter has come.

Future

Looking further into 2021 and beyond, the future of DeFi is bright.

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