From BitFi to DeFi: Over a Decade of Cryptocurrency Evolution

Looking back at the countless evolutions in the crypto sphere during a little over a decade, I find it fascinating we still think of this time as early adoption.

If we are only to count the financial side of blockchain and the cryptocurrencies that are built upon this technology, let's take a minute to realize how far we have gone from the early days.

The Early Days of the Bitcoin Verse (BitFi)

I called it bitcoin verse because, even if bitcoin forks started to happen, its dominance was simply crushing the market at the time. BitFi ("bitcoin finance") name is a bit forced, even if everything revolved around bitcoin, but it suits well for the rest of the post, so I'll stick with it.

Let's see how easy it was to get in, out or transfer bitcoin back in 2011:

In Oct. 2011, you only had a few options to get into Bitcoin: mail a check, wire money, or use Dwolla. The few exchanges that did exist included Mt Gox, Bitinstant, and Tradehill. People complain these days when BTC drops $500 bucks in an hour and trading platforms go on the fritz, but in Feb. 2012, Tradehill had to shut down because someone withdrew $100,000 from their service without warning.

Both Bitinstant and Mt. Gox are gone in flames too from those days, not just Tradehill, as the quote above mentions.

The only exchange from the early days I still know to be in operation is Bitstamp.

The odds of seeing your bitcoin back if you had them on an exchange during those early years didn't look good at all. Not your keys, not your crypto, right?

From the Early BitFi Years to CeFi Reign

Slowly, the crypto verse started to become more than bitcoin and its crushing dominance.

Ethereum was released in 2015, other types of protocols and governances were attempted on newer blockchains, including proof-of-stake (POS), one of the most commonly used now. Ethereum, bitcoin and all their (previous) forks were based on the proof-of-work model. Even so, bitcoin is still the most dominant cryptocurrency of the world, as we know.

With the number of cryptocurrencies - now into thousands - the number of exchanges grew as well.

I guess we can split this period in two: before and after the rise of Binance. Before, exchanges like Poloniex, Bittrex and maybe others I don't remember right now were kings. Now Binance has secured that spot in the crypto cefi world. Not as much on the institutional front, from what I heard in an interview, where Coinbase Pro is leading. But Binance has its hands in the decentralized finance too through Binance Smart Chain, something very few crypto cefi seriously do.

Other types of businesses were developed too, during that period, like the lending platforms. You know, the likes of BlockFi, Nexo, Celsius, Crypto.com etc.

One thing common to all these businesses: unlike the decentralized desiderate of many blockchains, they were (and are) highly centralized.

Decentralized Finance (DeFi) Starts to Take the Lion's Share

DeFi is something that's been around for a few years. If we count staking rewards or other types of inflation distribution that's been around the crypto sphere, we can say decentralized finance has been around for quite some time, and it's at least as old as the POS blockchains.

Otherwise, many specialized DeFi protocols are based on blockchains with smart contract support.

Hive Example

On Hive we have dlease for a few years I guess, to seek and receive ROI for delegating our staked coins (powered up Hive).

Everyone who has powered up Hive also receives a small interest for that (a little over 3%).

And recently there is an interest being introduced to the HBD tokens you keep in your savings account. Currently 7%, but might go higher than that. And HBD is a stable-ish coin. All that at level 1 on the Hive blockchain.

DeFi and Yield Farming

We can't deny defi has become a buzz word now.

And we can also see some might consider being involved in decentralized finance as yield farming. That's simply wrong. Yield farming means to actively move funds around from smart contract to smart contract and often from platform to platform seeking the best (short term) yield.

One can be involved in DeFi simply to make a trade (i.e. swap). Or to park some of the coins held for a passive yield. Much like on the CeFi lending platforms, but in a decentralized manner. Or to become a liquidity provider for some fees. Or if we count the previous example of Hive I gave (and not only), to stake some tokens for a return.

Anyway, yield farming is just a small portion of what happens on Defi. A very small thing. So are rug pulls actually, considerring how new everything is.

CubDeFi: Homebase for Many Community Members

If you are part of the Leofinance community, you likely made a step towards CubDefi. For many, that was their first adventure outside the Hive ecosystem and into the Binance Smart Chain.

If I'm not mistaken CubDefi started in early March. We are in early July, 4 months from the beginnings.

During this time, the project had to practically be re-written to smoothly shift to a new and sustainable economical model.

Now we find ourselves in the Week of CUB, a good marketing strategy meant to drop an exciting announcement or feature related to CubDefi every day for a week.

There are some interesting announcements coming that will likely make CUB price go higher.

In the yield farming game, long term means something like a few weeks. In DeFi, in general, long term could mean years (see some comparative staking rewards).

Posted Using LeoFinance ^Beta