The Evolution of DeFi: From Geek Toy to Mainstream Financial Darling

In recent years, decentralized finance ( DeFi ) has become a hot topic in the financial world. From the initial niche experiments on Ethereum to the emerging field that now attracts Wall Street's attention, DeFi has undergone a tremendous transformation.

From 2020 to 2021, the DeFi market experienced explosive growth. The overall locked value ( TVL ) skyrocketed from over a billion dollars to a peak of 178 billion dollars. Projects like Uniswap and Aave have become stars in the crypto world.

However, for the majority of ordinary investors, DeFi still resembles a maze. Complex wallet operations, obscure smart contracts, and security risks have all become barriers to entering DeFi. Data shows that the proportion of traditional financial institutions truly participating in DeFi is less than 5%.

To address this issue, the decentralized ETF ( DeETF ) has emerged. DeETF combines the advantages of traditional ETFs and blockchain, preserving the convenience of funds while also considering the high growth potential of DeFi assets. It acts like a bridge, connecting the new land of DeFi with traditional investors.

The development of DeETF has gone through several stages:

1. Early exploration (2017-2019): MakerDAO, Compound and other projects demonstrated the potential of Decentralized Finance. The emergence of Uniswap greatly simplified on-chain trading.

2. Market Explosion and Concept Formation ( 2020-2021): The DeFi market scale has surged, but it has also exposed significant participation barriers. Some traditional financial companies have started to launch products that track DeFi protocols.

3. Market Reshuffling and Maturity of Models ( 2022-2023: After experiencing black swan events, DeETF gradually developed two models: ETP products through traditional financial channels, and on-chain decentralized platforms.

4. Advantages manifest while challenges coexist: DeETF lowers the participation threshold, increases transparency and flexibility. However, regulatory uncertainty and smart contract security remain challenges.

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Currently, DeETF is developing along two paths: one is to issue ETPs through formal exchanges; the other is a purely on-chain, decentralized DeETF platform. Emerging projects like YAMA are introducing AI-driven asset allocation recommendation systems, making DeETF smarter and easier to use.

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In the future, with the continuous growth of the DeFi market, DeETF is expected to become an important application scenario for on-chain asset management. Different types of explorers are injecting new vitality into this field, redefining the way on-chain asset management is conducted.

The development of DeFi and DeETF reflects the continuous progress of financial freedom, transparency, and inclusiveness. This story is still unfolding, but the future has already begun to take shape.