The year 2020 has been a year in which many countries’ economies suffered massive economic dip and recession. However, the same cannot be said for Defi, whose immense success stands out as a significant breakthrough for the cryptocurrency world at large. Amid the ravaging Covid-19 pandemic, which has seen several monetary policies and regulations to revive the global market place employed by government and financial institutions.

Alternatively, a massive shift to cryptocurrency as an investment option has been used by Investors, businesses, and institutions to get the best of what is left of the year. It has also been a good year for Bitcoin(BTC), which has risen to levels that have not been seen since 2017, where it broke records.

BTC continues to be the forerunning cryptocurrency globally, and its market capitalization has also witnessed an increase in 2020. The Defi boom of this period had seen itself being compared to BTC’s 2017 boom when it approached the $20,000 mark.

DeFi has been impressive this year

Defi, not without its cons, has been on a steady rise, having laid down impressive numbers in 2020. It continues to enjoy massive popularity in the ethereum space. Simultaneously, the ethereum space has also seen a surge of activities and value in the year, earmarking it as one of the leaders of the cryptocurrency space.

However, there are concerns that the yield farming and pump-and-dump schemes in Defi could lead to many losses. Alternatively, this negativity around it may be a stumbling block towards any future development that the sector is building. Furthermore, this is not a good image for an industry looking to build on the success that they have enjoyed in an economically troubled year.

In August 2020, the success enjoyed by Defi was further cemented as it announced that it had surpassed $7billion in value locked into its platform, and the overall market capitalization currently stands at about $14Billion. Users also attested to this rise and have capitalized on the gains by increasing investments.

Investors concerned about pump and dump schemes

Yield farming continues to be a major concern for Defi as crypto users with several tokens stand to make gains by staking it to earn yield. This continues to be a dark side of Defi as a few investors have made a gain on investments, many more have been deceived by half-baked projects and scams to capitalize on the hype it is gaining. The “pump-and-dump” schemes (P&Ds) in the cryptocurrency market is also a major concern for Defi. The artificial price inflation of cheaply acquired assets before selling it will lead to investors losing money.

Defi must build on the success of 2020 by breaking away from the negative perception of its “yield farming” and “pump-and-dump” schemes. The impact of these schemes will hamper current investors and future investors in the system. This will give investors confidence, and the cryptocurrency system at large will continue to enjoy massive growth.