Newcomers to decentralized finance, or DeFi, would be hard-pressed to believe how much the industry has grown, changed and matured in just over a year. At the end of 2018, Maker returned to the scene with relaunched tooling and a buzzy investment from the experts at Andreessen Horowitz. Compound Finance launched around the same time, offering money markets for Ethereum-based assets and has also received funds from Andreessen Horowitz, which invested more in Compound at the end of 2019.
Although the DeFi industry has moved at a remarkable speed, it’s still possible to make simple sense of the industry. I find that a four-phase model helps define the major changes already accomplished and the radical developments still to come. There are no hard-and-fast divisions between these phases; one company or market may enter a new stage while others languish in the previous phase. The DeFi industry, after all, has never operated in lockstep.
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