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- At present, over 1400 DApps are functioning in the market.
- The collective gross value of DeFi products lies from $78billion to $224 billion at the beginning of H2 of 2022.
Currently, there are approximately 14,00 DApps, and the number of operating DApps is constantly increasing. As per the United Federal Board discussion paper dated in June 2022 and released on 30th August. Ethereum is listed among the biggest hosts, with 470, nearly 31 percent.
The author of the discussion paper mentioned that these Decentralized finance products denote small numbers of the global financial system but also pose the risk of financial stability.
The collective gross value of DeFi products lies from $78billion to $224 billion at the beginning of H2 of 2022. Depending on how DeFi was programmed, the paper mentioned. These figures have fallen dramatically since then as the crypto winter descended. During the same period, technological growth is enhancing DeFi’s processing capability. The author highlighted that wholesale investors are the most prominent DeFi users.
The majority of the paper focuses on the risk and benefit factors that the author observes in the DeFi ecosystem. Cryptocurrency volatility hinders DeFi’s growth, and risks to the broader financial system are small at present, the author said but: “The ability to build large leveraged positions and to conceal trades to some extent, merged with the novelty of the financial products allowing such leverage, have been common elements in the history of financial crises of the past century.”
The resistance to censorship is stretched, and clarity could be a competitive drawback for institutional investors and an invitation for misconduct. The author also quoted that Retail investors will always be vulnerable since: “If crypto is to become a mainstream product, then it is going to be widely used by people who can adequately assess the programming and economic risks associated with their crypto transactions.”
The report underlined that “If a user suffers losses transacting through a dapp, the user could find it challenging to determine who to sue on the DeFi side, but it may not be difficult to identify the traditional intermediaries that might bear some legal liability.”
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
