DeFi trends in 2021 that you can use in your business

Maciej Zieliński

04 Mar 2021
DeFi trends in 2021 that you can use in your business

DeFi has seen a gigantic growth of nearly 1000% in 2020, and as decentralized finance continues to gain popularity, this number continues to grow. What DeFi trends will be crucial this year?

By the end of last year, the total value locked up in DeFi had managed to exceed $26 billion. By comparison, just a year ago there was just 831 million locked up in DeFi protocols. DeFi's incredibly rapid growth in 2020 helped set the stage for another wave of adoption in 2021. Because despite such rapid growth, DeFi still remains a very young industry with plenty of room for innovation. 

If so, what DeFi trends are worth keeping an eye on in 2021?

Proof of Stake (PoS) as a consensus mechanism

One of the most important DeFi trends in 2021 will definitely be the displacement of Proof-of-Work (PoW) by Proof of Stake. PoW is currently the most common consensus algorithm used in blockchain networks to confirm transactions. Its operation relies on the use of computing power to secure and verify data. 

So-called miners play a key role for its operation. Essentially, "mining" is the process of creating a block of transactions to be added to the blockchain. The function of miners is thus to process pending transactions in exchange for rewards in the form of cryptocurrency, such as ETH in Ethereum (respectively, 2 ETH for each block generated).

Generating a block requires the use of a lot of computing power due to the difficulty level set by the Blockchain protocol. It is proportional to the total amount of computing power used for mining and serves as a way to protect the network from attacks, as well as tune the rate at which subsequent blocks are created.

Disadvantages of PoW:

  • high energy intensity
  • networks prone to centralization of extraction
  • - limited scalability
  • - relatively low throughput

It was Ethereum, the world's most popular Blockchain protocol, that initiated the widespread transition from Proof-of-Work to Proof-of-stake algorithm. In 2021 with the next phases of updates - Ethereum 2.0, Ethereum networks will fully transition to PoS.

DeFi trends : What changes PoS brings?

  • Significantly lower energy consumption 
  • improved scalability 
  • decentralisation behaviour

Proof of stake is a consensus process by which a cryptocurrency becomes a validator for a Blockchain network. By using PoS, the security of the network is achieved through financial commitments rather than the consumption of computing power - energy. The validator runs software that confirms the transaction and adds new blocks to the chain. 

To become a full validator in Ethereum 2.0 , you will need 32 ETH. However, there will be an opportunity to join a pool of smaller validators and thus offer a smaller stake. When processing transactions, validators will take care to maintain consensus over the data and thus the security of the entire network.

DeFi trends

Liquidity of pledged tokens

However, PoS has one drawback: validators receive rewards for staking, but at the same time they freeze the pledged funds. In 2021, it is definitely worth watching what solutions to this problem the market will come up with.

Already today, DeFi platforms are starting to allow validators to create synthetic versions of their pledged tokens, which can then be used in cryptoeconomics. An example of this is Fantom's Liquid Staking, which allows pledged tokens to be converted into sFTMs, which can then be traded on Fantom Finance or used to mint stablecoins.

The ability to give liquidity to pledged funds makes this form of investment significantly more attractive. Therefore, due to the growing importance of PoS, it can be expected that the increase in the popularity of such solutions will be one of the most important trends in DeFi in 2021.

DeFi Trends: Stablecoins

Currently, stablecoin supply has surpassed $26 billion, with $20 billion added to the market through 2020 alone. Tether USDT has remained the main player for years, holding as much as 79% dominance. The stablecoin market is thus invariably dominated by the US dollar. However, as the sector matures and the macroeconomic effects of government stimulus packages become apparent, we can expect stablecoin secured in other currencies to grow rapidly in popularity as well.

Increase in importance of DEX

The latest report from Kraken Intelligence finds that nearly 96% of blocked ETH is on decentralized exchanges - DEX or lending protocols. While the amount of ETH blocked in lending protocols still outpaces that on decentralized exchanges, the growth for DEX in 2020 was far more robust. The total amount of ETH on the DEX grew by as much as 2,800%, when it only grew by 60% on lending protocols. The report indicates that at this rate, "DEX will soon control the vast majority of TVL (ETH) in the DeFi space."

DeFi trends in 2021 - summary

The year 2020 was undoubtedly an extremely favorable time for decentralized finance. That's when DeFibecame a permanent fixture in the blockchain community, attracting the attention of even those not previously associated with the technology.

But what if 2021 turns out to be an even better year for the sector? The growing public interest and numerous innovations aimed at improving scalability make it possible to consider such an eventuality highly probable. That's why many DeFi enthusiasts are looking at the current year with an almost decreasing optimism. 

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What is Account Abstraction?


10 Nov 2023
What is Account Abstraction?

Account abstraction is a new way of thinking about how users interact with blockchains. Instead of using traditional externally owned accounts (EOAs), account abstraction allows users to create and manage their accounts using smart contracts. This has a number of potential benefits, including improved security, enhanced privacy, and increased flexibility.

What is account abstraction?

Account abstraction is a concept that, at its core, aims to simplify the user's interaction with blockchain networks. It is a transformative approach that seeks to mask the technicalities of blockchain operations from end-users. It is making transactions as straightforward as sending an email. Account Abstr. allows users to interact with the blockchain without worrying about the underlying technical details.

How does account abstraction differ from the traditional model?

In the traditional account model, each user has an EOA. EOAs are controlled by private keys, which must be kept secret in order to protect the user's funds. Acc. abstraction allows users to create and manage their accounts using smart contracts.

Historical Context

The journey towards acc. abstraction began with the first generation of blockchain technologies, characterized by their "one-size-fits-all" approach to account management. Bitcoin, for instance, introduced the concept of accounts and transactions in a form that was accessible to tech-savvy individuals but remained perplexing to the layperson. Ethereum expanded on this by introducing smart contracts, which opened the door to programmable transactions but did not alter the fundamental account structure. The idea of acc. abstraction has been discussed in the Ethereum community for several years as a part of various Ethereum Improvement Proposals (EIPs), particularly as a feature to be potentially implemented in Ethereum 2.0. It is a direct response to the need for a more versatile and user-centric design that can cater to a broader audience and spur the widespread adoption of blockchain technology.

The Technicalities of Account Abstraction

Account abstraction is not merely a theoretical construct but a technical innovation with specific mechanisms underpinning its operation. In essence, it alters the way transactions are initiated and executed within a blockchain network.

How Account Abstraction Works

Under traditional blockchain models, initiating a transaction involves an externally owned account (EOA) signing a transaction with a private key. This transaction is then broadcast to the network for validation and inclusion in the blockchain. Account abstraction, however, replaces this process with a more flexible one. Here, every account is a smart contract, and transactions are messages sent through these contracts. These smart contracts can encode complex rules for transaction validation, beyond what EOAs can do, such as multi-signature requirements or conditional transactions based on certain triggers.

The technical crux of account abstraction lies in the smart contract’s ability to define its own conditions for transaction execution. This means that user accounts can have unique security protocols or automated operations without the user needing to understand the underlying smart contract code.

Hey! Are you interested in the latest technologies in the blockchain area? be sure to read the article 'Top Zero-Knowledge Proof Projects to watch in 2023'

The Benefits of Account Abstraction

The implications of account abstraction are profound, offering a range of benefits that can enhance the blockchain experience for users and developers alike.

Improved User Experience

One of the most significant advantages of account abstraction is the improvement it brings to user experience. By abstracting away the complexities of key management and transaction rules, it presents a more intuitive interface for users.

Enhanced Security Features

Account abstraction also allows for the implementation of advanced security measures. Since each account can define its own logic, users can tailor their security settings to their specific needs. For instance, one might set up an account that requires additional verification for transactions exceeding a certain value or restricts withdrawals to certain addresses.

Future Implications

The future implications of account abstraction are vast. As the technology matures, it could become a standard feature of blockchain networks, potentially making the current distinction between user accounts and smart contracts obsolete. This could lead to a new wave of blockchain applications that are both powerful and accessible, bringing us closer to the vision of blockchain technology as a seamless part of everyday life.

Challenges and Considerations

Technical Limitations

One of the primary technical challenges of Acc. abstraction lies in its integration with existing blockchain protocols. Current networks are optimized for the EOA model, and introducing a new account structure necessitates significant changes to the core protocol. This includes modifications to the way transactions are propagated in the network, how gas fees are calculated, and how the state of the blockchain is managed. Ensuring that these changes do not compromise the network's performance or security requires careful planning and extensive testing.

Compatibility with Current Systems

Another consideration is the compatibility of account abstr. with the vast ecosystem of existing blockchain applications and services. Wallets, exchanges, and other services have been built around the traditional account model. Transitioning to an acc. abstraction model will require these services to update their infrastructure, which may be a complex and resource-intensive process. Furthermore, there is a need for standardization across the industry to ensure that different implementations of account abstr. can work seamlessly together.


Acc. abstraction represents a significant leap forward in the quest for a more user-friendly blockchain experience. By streamlining the transaction process and offering enhanced security features, acc abstraction has the potential to make blockchain technology more accessible to a broader audience. However, the path to widespread adoption is not without its obstacles. Technical challenges and compatibility issues must be carefully navigated to integrate it into the existing blockchain landscape.

Key Takeaways

How to Add Gnosis Chain to MetaMask: A Simple Tutorial


03 Nov 2023
How to Add Gnosis Chain to MetaMask: A Simple Tutorial

As the cryptocurrency ecosystem expands, there is an increasing need for various blockchains with distinct capabilities. Gnosis Chain enters the scene, offering a selection of unique characteristics. By integrating Gnosis Chain with MetaMask, users can access a more comprehensive array of decentralized services. We will walk you through the steps to add Gnosis Chain to your MetaMask wallet in this tutorial.


Setting up MetaMask

Before exploring the integration of Gnosis Chain, it is crucial to have MetaMask installed and operational:

  • Download and Install: If you have not done so already, visit the official website to download and install the MetaMask browser extension.
  • Setup Account: After completing the installation, create your account and make sure to remember the provided seed phrase. This phrase serves as your primary means for account recovery, so keep it secure.
  • Secure Your Account: Protecting your MetaMask account is of utmost importance. Use a robust password and never disclose your seed phrase to anyone.

Gnosis Chain

It is always helpful to have a basic understanding before incorporating any new blockchain into your wallet:

  • Gnosis Chain Overview: Gnosis Chain, a rising star in the blockchain world, brings a range of decentralized solutions to the table, such as prediction markets and decentralized trading platforms.
  • Benefits & Features: Among Gnosis Chain's main selling points are its accelerated transaction speeds and potentially lower fees when compared to congested networks.

Tutorial: How to Add Gnosis Chain to MetaMask

In the top right-hand corner of your browser, you'll find the wallet. If pinned, click on the MetaMask fox icon; if not, click the three dots in the top-right corner. The following screen will appear:

An option to expand the wallet to a new browser page is available by clicking "Expand view:"

This action will launch MetaMask in a new tab:

By clicking on the ‘Ethereum mainnet’ in the top left corner, you can add another network. Click ‘Add Network’

Choose option ‘Add a network manually’

Then, input the information below:

Network Name: Gnosis Chain formerly xDai


ChainID: 100

Symbol: XDAI

Block Explorer URL:

After saving the settings, Gnosis Chain will be added to your network.

The Benefits of Adding Gnosis Chain to MetaMask

With multiple blockchains becoming more common, integrating Gnosis Chain with MetaMask offers numerous advantages:

Expanded Capabilities: Accessing Gnosis Chain through MetaMask opens up a collection of exclusive applications and features inherent to this particular blockchain, which may include unique dapps or cutting-edge financial products.

Diversification: The crypto domain is extensive and constantly growing. By incorporating various chains like Gnosis into MetaMask, you broaden your potential investment opportunities and decentralized application experiences, ensuring no opportunities are missed.

Speed & Cost-Effectiveness: Network congestion and high gas fees on established platforms like Ethereum can discourage many users. Gnosis Chain's architecture has the potential to provide relief through quicker transaction times and more affordable fees.

In summary, as the possibilities within the crypto sphere continue to evolve, tools like MetaMask grant users access to this expanding world. By adding chains like Gnosis, users can stay ahead in this decentralized revolution.


By bridging platforms like Gnosis Chain with accessible tools like MetaMask, individuals not only amplify their engagement with decentralized applications but also fortify their position in this expansive realm. The integration of Gnosis Chain to MetaMask epitomizes the evolution of the crypto landscape – a testament to its ever-growing diversity and potential. As we continue to delve deeper into the decentralized future, tools and integrations like these will undoubtedly play a pivotal role in shaping our digital experiences and opportunities. Whether you're seeking more efficient transactions, diverse dapp interactions, or simply a broader understanding of the crypto ecosystem, this guide's steps open doors to a new horizon.