Predictions on DeFi Development Trends: Options Trading, Modular Blockchain, and Introduction of Real-World Assets

In 2023, the cryptocurrency and Decentralized Finance ( DeFi ) sectors are expected to witness several significant developments. Here are a few predictions for future trends:

1. The potential of the DeFi Options market is enormous

Options trading has shown great revenue potential in traditional financial markets. However, for DeFi options to become mainstream, further improvements in user experience are needed, especially in mobile operations. Currently, the complexity of options trading leads to significant information asymmetry. If a user-friendly and low-threshold DeFi options platform can be created, there will be an opportunity to achieve considerable profits.

2. Modular Blockchain Becomes a Hot Topic

Modularity is a key concept in the expansion of blockchain, and this trend may accelerate in 2023. Some emerging projects will attract significant attention, while some mature blockchain ecosystems will also benefit from this trend. The modular structure allows blockchains to add new features and protocols more efficiently, thereby improving scalability and transaction processing capabilities.

3. Ethereum is expected to perform better than Bitcoin

The trend of Bitcoin is closely related to monetary policy, and the current monetary easing policy has been suspended. In contrast, Ethereum's performance may be more outstanding, which is related to the development of Layer 2/Layer 3 scaling solutions, yield opportunities, DeFi, and NFT activity as well as environmental sustainability. However, Ethereum's "paradigm shift" beyond Bitcoin may not occur in the short term.

4. Soulbound Tokens (SBT) May Rise

Soulbound tokens represent non-transferable on-chain identities, with the potential to bring real-world assets and identities onto the Blockchain, simplifying representation and transaction methods. The success of SBT hinges on whether true practical use cases can be found.

5. Decentralized Finance introduces real-world assets to enhance returns

As the DeFi market matures, more protocols may seek to introduce traditional finance/real-world assets ( RWA ) for higher returns. This may also create opportunities for traditional financial institutions to enter the DeFi space.

6. Increased Competition in DEX and Diversification of Business Models

The competition in the decentralized exchange ( DEX ) sector will become increasingly fierce, prompting various platforms to develop new features and expand to other blockchains. The capital efficiency of the spot market will become a key to survival. Some platforms may launch new features beyond trading to achieve business diversification.

7. The Metaverse and VR May Regain Attention

As mainstream tech companies may launch virtual reality devices, the crypto world’s interest in decentralized metaverse may be reignited. Crypto metaverse projects that can access mainstream app stores or VR platforms may gain significant advantages.

8. Growth of Simplified DeFi Applications

To attract new users, various protocols may launch simplified versions targeting key features. These user-friendly applications will help lower the entry barrier for new users and increase the adoption rate of Decentralized Finance.

9. Web2 Giants May Integrate NFTs

After some platforms have successfully showcased ways for NFTs to enter the mainstream, more Web2 companies may seamlessly integrate NFT technology in the future.

10. The new generation of hardware wallets is coming soon.

2022 highlighted the importance of self-custody of crypto assets. The next generation of hardware wallets is expected to make progress in user experience, DApp integration, and other aspects, enabling users to conveniently and securely store cryptocurrencies and access the DeFi ecosystem.