Decentralized finance, or DeFi, is getting ready for a big comeback! A new report from Steno Research says that the total amount of money in the DeFi world could reach its highest by the middle of 2024. 

Can DeFi Outperform in 2024?

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• Record Growth Expected: According to Steno Research, DeFi’s total value locked could reach new highs by mid-2024.
• Interest Rates Count: U.S. interest rates are essential for DeFi because they influence how much people want to invest in these markets.
• Stablecoins and Assets Help: More stablecoins and interest in digital versions of real-world things, like stocks, are key reasons DeFi is expected to grow again.

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One important thing is interest rates in the United States. These rates are like a guide, showing people if it’s an excellent time to put their money in DeFi, which can be risky. Mads Eberhardt, who knows a lot about this, says these rates help people decide if they want to try DeFi.

Back in 2020, there was something called “DeFi summer.” It was a time when many people started using DeFi. This happened because the Federal Reserve, a big bank, lowered interest rates to help during the COVID-19 pandemic, which made people curious about trying new ways to manage money.

The report discusses interest rates, stablecoins, and digital money used in DeFi. Since January, stablecoins have grown by about $40 billion! They help make trading steady and safe. When interest rates go down, stablecoins become even more popular for use in DeFi.

Another cool thing is the interest in real-world things like stocks and bonds but in digital form. These have grown by 50% this year, showing that many people want to use DeFi for money.

DeFi is growing because technology is improving. New tools and systems are being created to make DeFi easier and safer. This makes more people interested in trying DeFi because they feel their money is safer.

The report further claims that the cost of using Ethereum- the primary network on which most DeFi applications run- has become more affordable; thus, people from most countries can afford to use DeFi.

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