In the dynamic realm of cryptocurrency and blockchain, innovation serves as the driving force behind transformative change.
Today, we'll take a look at two trailblazing entities—Primex.finance and Hydranet.ai—that stand at the forefront of redefining decentralized finance (DeFi). Primex Finance is a non-custodial prime brokerage protocol, and Hydranet.ai is a platform enhancing Bitcoin's access to DeFi.
So let's dive deeper into this.
The decentralized finance (DeFi) industry has experienced rapid growth and volatility in recent years. The TVL (Total Value Locked) across multiple DeFi blockchains was only $120 million at the end of 2017, but it rose to $1.2 billion by June 2020, and then skyrocketed to $166.7 billion by January 2022. However, it also experienced a sharp drop of 76% in dollar terms in 2022, due to the market crash and regulatory uncertainty. As of November 17, 2023, the TVL stands at $42 billion, according to DefiLlama2.
TVL matters because it is a measure of how much value is locked in DeFi protocols, such as lending platforms, decentralized exchanges and stablecoins.
TVL reflects the demand and adoption of DeFi services, as well as the growth potential of the DeFi ecosystem.
DeFi aims to create a more open, transparent and accessible financial system. An estimated 1.7 billion people worldwide are currently unbanked, meaning they have no access to traditional financial services such as bank accounts, loans, and insurance. This lack of access to financial services can have a devastating impact on people's lives, making it difficult to save for the future, start a business, or even meet their basic needs.
The potential of blockchain technology to revolutionize financial inclusion is huge. By making financial services more accessible and affordable, blockchain can help to reduce poverty and inequality around the world.
Some of the benefits of DeFi include:
- Faster and cheaper transactions: DeFi transactions are processed by a network of computers (nodes) that validate and record them on a public ledger (blockchain). This eliminates the need for intermediaries such as banks, brokers, or payment processors, who often charge high fees and take time to process transactions. DeFi transactions can be completed in minutes or seconds, with minimal or no fees.
- More control and security: DeFi users have full ownership and control of their assets, as they are stored in digital wallets that only they can access. DeFi transactions are also secured by cryptography and smart contracts, which are self-executing agreements that enforce the terms and conditions of a transaction. Smart contracts reduce the risk of fraud, human error, or censorship, as they are immutable and transparent on the blockchain.
- More innovation and inclusion: DeFi enables anyone with an internet connection and a digital wallet to access a variety of financial services, such as lending, borrowing, trading, investing, insurance, and more. DeFi also fosters innovation and experimentation, as anyone can create and launch new application
Despite its immense promise, DeFi's path to widespread adoption is riddled with hurdles. These include fragmented digital asset markets and the absence of native, efficient and decentralized access to DeFi for Bitcoin.
To bridge these gaps and foster trust, innovative solutions are urgently needed. I've embarked on a quest to uncover how two groundbreaking DeFi protocols, Primex and Hydranet, are tackling these challenges head-on. Here's what I've discovered:
Primex Finance: How Is it Addressing Key DeFi Challenges?
- Fragmentation of digital asset markets. Primex is an EVM-compatible multi-chain protocol integrated with multiple DEXs, which aggregates multiple liquidity pools to optimize the trading experience.
- Overcollateralization in DeFi. Primex allows traders to seamlessly borrow liquidity and amplify their spot trading positions without overcollateralizing their loans.
- Centralized trade execution (order books) is still present in DeFi. Primex uses a network of special instances called Keepers to execute trades when certain criteria are met, rather than relying on centralized trade execution mechanisms/back-ends/order books.
- Limited availability of assets for margin trading on existing non-custodial platforms. Primex integrates with multiple DEXs, giving traders unlimited access to a variety of assets for leveraged spot trading.
- Accessibility - Primex is designed as a completely open DeFi protocol for spot margin trading. This makes margin trading accessible in regions with constraints or limitations related to derivatives trading. In the next versions, Primex has plans to expand its feature set to include other leveraged operations across various DeFi protocols, such as lending, providing liquidity on AMM-based DEXs, etc.
Hydranet.ai: How Are You Enhancing Bitcoin's Access to DeFi?
- Lack of native, efficient, and decentralized access to DeFi for Bitcoin. We solve multiple problems at once, such as the scaling issue, the custody issue and the liquidity centralization issue. We solve the scaling issue by combining multiple Layer 2 solutions (Lightning and Connext's Vector, but we'll transition to our own EVM scaling solution soon for our Web3 debut).
- Solving the scaling, custody, and liquidity centralization issues for Bitcoin. We solve the custody issue by enabling permanent and total control of the users' assets so one never has to give up custody.
- We solve the centralized liquidity issue by enabling both individuals and communities themselves to have their own isolated liquidity. This is overseen by HUBs and checked with Watchtowers, which is all secured by Layer 1 (no more giving up liquidity for someone else to "keep safe", hoping they'll give it back once one goes to claim it).
How are you uniquely placed to solve this problem?
Hydranet.ai is in a good position to solve this problem because we're very used to bear cycles. We're experienced at operating with low funds and grassroots efforts are something we're really comfortable with. This has caused us to be very efficient and when coupled with our very gifted developers and dedicated team of former community members, we've concocted a very potent approach to the blockchain startup environment.
The Future of DeFi
Many people are excited about the future of this industry. What excites top leaders at Primex?
I am excited that DeFi is headed to becoming the new standard of how people exchange value. The mission of DeFi is to decentralize ownership and eliminate middlemen. With more and more financial products moving towards decentralized environments and the growing sophistication of financial use cases, it will eventually replace the majority of existing financial services.
What excites the top leaders at hydranet.ai?
Currently, we're most excited about the expansion of DeFi in all its forms. Finance needs to have its Spartacus moment and we're making a fervent effort to see that happen so the bullies in the legacy finance world no longer get to have their cake and eat it too.
In striving to make that happen, we hope to lead as an example; not as vultures only looking to extract value from smaller players or sequester the means to further the industry, but by offering value to the industry without asking for the whole world in return.
This post explores the transformative potential of decentralized finance (DeFi) and the key challenges it currently faces. It delves into the innovative solutions offered by Primex Finance, a non-custodial prime brokerage protocol, and Hydranet.ai, a platform enhancing Bitcoin's access to DeFi, to address these challenges. From addressing fragmentation in digital asset markets to enabling native, efficient, and decentralized access to DeFi for Bitcoin, these platforms are uniquely positioned to drive the future of DeFi.
There is a lot of excitement surrounding the expansion of DeFi. It will be interesting to track the role of Primex Finance and Hydranet.ai in advancing this industry.
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