The hype surrounding DeFi has dimmed as the crypto industry focuses on NFTs. Yet, DeFi protocols continue to innovate to accommodate new types of DEX consumers.
Investor protection is essential, and protocols need to reformulate the CEX experience to develop a locale for DeFi to thrive.
Serum, the permissionless DEX ecosystem built on Solana, is progressing its decentralized proposition while outperforming blockchain standards.
Serum is rightfully shifting the momentum in the DeFi sector. Existing protocols such as Uniswap, Pancake Swap, or other blockchain-dependent DEXs only provide the minimum solution. Serum builds an inclusive DeFi ecosystem to streamline DEX and DeFi adoption.
Although Solana’s TVL of $8.7 billion is only 10% of the TVL of Ethereum, Serum is altering the structural behaviors of DeFi markets and protocols.
Serum offers users the possibility to create dynamic and interactive DEXs, working as a functional layer for the growth of the DeFi sector on Solana. While low costs and transaction speeds are paramount growth factors for the general DeFi sector, Serum suggests a new dynamic, where users can create DEXs that perform similar actions as CEXs.
The non-custodial exchange’s value in the grand scheme of blockchain things is to facilitate a transition to decentralized finance. Serum’s in-depth order book is used across many DeFi outputs, including borrowing-lending, swaps, NFTs, social media networks, and even games such as Star Atlas.
Solana’s expansion as a viable contender to Etheruem created a network effect, influencing the community’s focus. As a catalyzing factor, Crypto trader KALEO illustrated Serum’s current price is below undervalued and “way too cheap,” given its extensive use cases. Zhi Ko, the co-founder of Solstarter, reiterated a similar view, declaring: “$FTT & $SRM are undervalued.”
Solana technologically backs Serum, and lower transaction fees and immutable transactions influence price actions on Solana, which reciprocally coact to Serum. Zhu Su, CEO of 3AC, showed a parallel between Ethereum and Solana. He emphasizes there is a similarity between Ethereum in 2017 and Solana in 2021.
As Solana is beginning a mild flippening process, adjacent ecosystems built on it can use the positive PR as an industry-boosting mechanism. Wormhole, Solana’s bi-directional bridge, between SOL-ETH adds additional value to Serum. Thus, Serum supports cross-chain trading, making transactions safer and cheaper than utilizing custodial exchange.
At the time of writing, SRM’s price is $10.30, as it continues to trade around the $10 mark after reaching $12.1 on September 9th.
Low transaction latency, familiar UI, and a growth mechanism together constitute an expandable product. Adding an order book function to a DeFi project innovates decentralized trading processes as it builds the common ground for financial interaction.
With more financial services such as 01 Protocol, Star Atlas, and Cyclos built to interact with Serum, DeFi on Solana creates a well-known standard, attracting more users to consider Serum a viable ecosystem. Moreover, every new project adds additional value to Serum as it helps increase the network liquidity.
While Serum offers CEX-like functions, it is still a decentralized, immutable ecosystem, which relies on smart contracts to conduct financial interactions on-chain between buyers and sellers.
2020’s DeFi summer did not fade. Instead, users transferred their funds to other speculative blockchain products like NFTs, which to a certain extent are also financial assets, in a less liquid market. However, development and innovations on DeFi protocols and DEXs continue, and projects that add a new dynamic to the field will thrive.