Bernstein’s analysis reveals a significant shift in the world of decentralized finance (DeFi), with six out of the top 10 revenue-generating protocols being DeFi applications. Among these are Uniswap, Aave, Maker, GMX, Synthetix, and Sushi. The authors highlight how the previous cycle of DeFi was characterized by unsustainable yields that eventually collapsed, with Luna stablecoin serving as a prime example of this downfall.
Stablecoins, such as Luna, are cryptocurrencies that are typically pegged to stable assets like the U.S. dollar. DeFi, on the other hand, encompasses a broad range of financial applications in the crypto space aimed at disrupting traditional financial intermediaries.
What sets this current cycle apart, according to the report, is the sustainability of the yields being generated. The authors argue that these real yields, coupled with increased regulatory clarity, could pave the way for global asset managers to explore the possibility of DeFi exchange-traded funds (ETFs) and active DeFi funds.
Overall, Bernstein’s analysis sheds light on the evolving landscape of DeFi and hints at the potential for further mainstream adoption of decentralized financial products in the future.
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