2022 has witnessed fallouts of several crypto ecosystems, and there has been significant damage to investors’ money. More than 30 decentralized finance protocols have united as a proactive damage control measure and an initiative to rebuild trust among investors. Several players from the decentralized finance ecosystems have showcased the incentive behind interoperable, trustless, and permissionless platforms.
From February 6 to 7, for 24 hours, 30+ DeFi protocols joined forces as an initiative to share tweets from other protocols in a “permissionless” way. It highlighted the interoperable and trustless nature of Web3 technologies, especially in developing finance solutions. Several DeFi projects, including Yearn.finance, SushiSwap, MakerDAO, and Aave participated in this trust-rebuilding campaign that finance experts much anticipated to deal with the damaged image of Blockchain technology due to recent market fallout.
An experiment in social coordination with @MakerDAO pic.twitter.com/lXOFPeqToS
— Element Finance (@element_fi) February 6, 2023
Decentralized finance has gained mainstream acceptance and adoption as a potential replacement for traditional centralized finance systems, but the shaky reputation for several reasons is still present. The Chief Marketing Office at MakerDAO, Mamun Rashid, said that to equip the “full potential” of decentralized finance(DeFi), a collaboration among different expertise and ideas is a must.
”Together, we can push the boundaries of traditional finance and build a more inclusive and accessible financial system through DeFi.”
The collaboration depicted a “spirit” of decentralized finance as a collaborative ecosystem eliminating the limitations imposed by the competitive environment among enterprises developing DeFi solutions.
Jared Grey, the CEO of SushiSwap, also contributed and said, “Leveraging the composability of this new technology, we can democratize and provide more equitable, safer, and transparent financial tools and products to reach a global audience.” He said that the decentralized finance ecosystem is under development, and we need to develop it to address the challenges in the current status quo of popular financial frameworks that reduce financial freedom and oppose barriers.
He added that the brands and businesses working in the DeFi space must take it up and portray the true message of decentralized finance. In 2022, there have been several instances where DeFi became a major target of exploitation.
Beosin published a report stating that decentralized finance registered the highest volume of attacks in 2022. It resulted in a more significant 47.4% rise in security losses in 2022 than the previous year, with cumulative losses totaling $3.64 billion.
As new projects enter the DeFi market, these numbers may increase in 2023 with more sophisticated attacks. However, 2023 started with magnificent growth in DeFi solutions, as per DappRadar’s report. Injective created a $150 million ecosystem fund to boost Cosmos and DeFi adoption in the market.