DeFi and DeFi 2.0

DeFi is the abbreviation form of Decentralized Financial, also known as Open Finance. It is in nature a decentralization contract that builds the open financial system, aiming at allowing anyone in the world to conduct financial activities anytime and anywhere. DeFi is a peer-to-peer financial system with transparency, accessibility and inclusiveness. DeFi has been developing in two directions: one is to release credit potential; the other is to improve the efficiency of capital utilization. However, most of the current DeFi project liquidity providers have not formed long-term mutually beneficial cooperation with the contract. Therefore, the voice for launching DeFi 2.0 is getting higher and higher. The key to DeFi 2.0 projects is to reduce non-permanent losses, promote the development of the lending market and direct governance operations. Projects need to focus on optimizing TVL, creating healthy cash flow, optimizing capital efficiency, and improving the infrastructure layer. DeFi 2.0 allows people and funds to flow faster, that is, through DAO to inspire individual users to contribute to the project, and fully improve the utilization of funds through new stackable contracts. DeFi 2.0 will affect our real life at a deeper level, including traditional insurance, rare commodity NFTs, credit loans, and more types of assets including stocks, bonds, and even real estate.