From Crypto Winter to Crypto Weirder
The crypto industry shifts from a bleak winter into a bizarre but promising new phase as DeFi emerges as the next frontier.
NYC Blockchain Week kicks off with the ConsenSys-hosted "Ethereal" conference as the crypto industry transitions from a bleak "crypto winter" into a "crypto weirder" era. Following the burst of the bubble in early 2018 and subsequent layoffs at ConsenSys, the current scene features an eclectic mix of participants and projects. Former hedge-fund billionaire Michael Novogratz, Rocket Lawyer's new blockchain wallet, and neo-Dadaists mingle with CryptoKitties developers who auction off "digital couture."
Amidst this colorful chaos, decentralized finance (DeFi) establishes itself as the serious next frontier for the blockchain space. This movement incorporates and transcends the initial coin offering (ICO) craze by building decentralized infrastructure for loans, stablecoins, insurance, clearinghouses, and derivatives. Instead of relying on traditional central authorities, these new financial protocols use smart contracts to automate complex economic activities.
MakerDAO stands out as the poster child for this DeFi movement through its innovative approach to stablecoins. Rather than backing a digital currency directly with fiat collateral, MakerDAO maintains its stability through a system of cryptocurrency loans and automated smart contracts. This model demonstrates how the industry is maturing to create practical, functioning financial products out of the underlying blockchain technology.