Decentralized finance (DeFi) has been moving a fairer Internet into the spotlight since the beginning of 2020 and we are on the verge of something that will change the world. DeFi technology would not be possible without today’s widespread web infrastructure, and it shows the tremendous strides we’ve made in next-level innovation. The third era of the Internet has already dawned with a new economy, new careers, and new business opportunities.
Many experts believe that the rise of DeFi helped non-fungible tokens (NFTs) become more liquid so that users can view them as a more realistic investment opportunity. The rise of NFTs is further evidence of how this area of finance is leading to a more promising and fulfilling evolution towards the full adoption of Web 3.0. NFTs are empowering the democratization of the new web – one of many benefits of blockchain technology – while DeFi aims to deliver on the promise of financial democratization.
Connected: How NFTs, DeFi and Web 3.0 are intertwined
DeFi was the catalyst for the NFT avalanche that we have seen in the past few months, aided by the ideas and infrastructure of Web 3.0. Billionaire investor Mark Cuban is just one of many who believes in the power and potential of DeFi, compares its growth to the dawn of the internet, and enjoys all of its untapped potential.
While DeFi undeniably helped the recent boom in NFTs, the relationship between the two is certainly symbiotic. NFTs help open up new collateral options in DeFi lending and can even represent more complex financial products. In addition, projects such as Centrifuge, a protocol for decentralized wealth financing, or Aavegotchi, a DeFi-enabled crypto collecting game that enables players to set NFT avatars with interest-generating aTokens and interact with other users, are already working at the interface of DeFi and NFTs.
Connected: NFTs enable gamers to have digital property rights
Users looking for more transparency, fairness and open source solutions could slowly but surely create a domino effect that will lead to full adoption of Web 3.0. While the next era of the internet is still undefined, NFTs, tokenization, and other next-level developments, coupled with a growing need for more decentralized solutions, have opened the door to a better and stronger web ecosystem that can evolve with the industry.
Connected: The DeFi snowball turns into a Web 3.0 avalanche
A solution-oriented web
While the DeFi rollout continues its rollout on a global scale, designed to challenge traditional finance, mainstream use cases are essential for this new era of the web to thrive. The next generation of the web is more focused on everyday use and less on technical infrastructure, creating an atmosphere that both challenges and changes human interaction as we know it.
The decentralized web will build a global plethora of applications and add value to everyone, from teachers to doctors to fashion entrepreneurs and more. Large companies like Microsoft, Sony and Samsung are already turning to blockchain, machine learning and other Web 3.0 technologies and are seeing their value in building a more scalable real-time solution.
Connected: Is a new decentralized Internet or Web 3.0 possible?
But how do we get there?
There is already a demand to close the gap between Web 2.0 and Web 3.0 in order to create a more censorship-resistant, more flexible and more open-source Internet. DeFi continues to show its resilience in financial markets as Total Value Locked (TVL) in smart contracts is still above $ 111 billion, showing the wider market confidence in decentralized financial solutions despite some declining trends elsewhere.
Connected: DeFi proved resilient during the market crises in March 2020 and May 2021
Web 3.0 is a global movement, as the increased momentum surrounding digital DeFi assets shows. The price of Ether (ETH) is currently over 1,000% higher than a year ago, proving that Web 3.0-era products have the potential to mimic traditional financial products and achieve the same success, but in a decentralized way. It is a surefire thing that one day these applications will bypass banks, Wall Street trading firms, and brokers entirely.
While DeFi Web 3.0 is pushing full steam ahead, a seamless and efficient onboarding process is needed. Moving from one version of the web to the next requires a wider adoption of DeFi in everyday businesses to really improve the learning curve that comes with the new and improved features of Web 3.0. It will be crucial that companies provide the financial support and technical expertise to make our new Internet brilliant and usable for all.
The wait is over: Web 3.0 is no longer just a futuristic idea, but also a rapid approach. While there is still much to be done before these new technologies become part of everyday life, decentralized funding has paved a clear path for a new generation of bigger, smarter, and better mindsets that will test the limits of mainstream adoption. NFTs are the most well-known use cases right now, and the DeFi movement can create tools that eliminate the need for intermediaries in any field and lay the foundation for endless possibilities in DeFi and beyond.
As more centralized applications, institutions, and traditional financial markets adopt blockchain technology and other cutting-edge applications, all industry giants will follow suit. The web as we know it is dying, and that’s not a bad thing. The DeFi domino effect will continue throughout 2021, leading to widespread adoption of Web 3.0 – and crypto will lead the way.
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The views, thoughts, and opinions expressed herein are those of the author alone and do not necessarily reflect the views and opinions of Cointelegraph.
Maria Paula Fernandez is advisor to the board of directors of Golem Network and founder and managing director of the decentralization department (ETHBerlin). Maria Paula has been part of the crypto community since early 2017, joining the Web3 Foundation and Polkadot in her early days. In her free time, Maria Paula uses the Department of Decentralization (ETHBerlin) collective to explore various verticals of the community, from social experiments such as the Berlin culture and hacking festivals to the project management of the Ethereum Görli Testnet. One of her favorite subjects is the interface between technology and art.