Nowadays, many people shed light on crypto, the Metaverse, and NFTs, but what are these terms? And why are investors keen to invest in these big-time projects?
In layperson’s terms, all these terms come under one category DeFi (De-centralised finance) – an emerging financial technology that has gained much popularity. DeFi is when there is no central authority authorizing transactions. All transactions are kept on digital ledgers, which are then stored on a database called the blockchain.
Take the current centralized finance system for example: If you want to make a payment, the bank is notified, the banker updates your ledger, and the money you own is sent outwards. The whole process is all controlled by the central authority of the bank (the government).
Nowadays, venture capitalist firms and companies are keen to invest in new exciting technology. The Metaverse is a new concept that has got investors intrigued. The Metaverse is a virtual reality space consisting of digital worlds where people can work, play, shop and socialise as characters called avatars.
All of these projects offer big-time returns. With futuristic technology having gained much popularity and traction, it is a no-brainer for investors to put their money into these projects.
Many companies have noticed this; Google’s parent company, Alphabet, has been one of the most active investors in cryptocurrencies and DeFi technology. The innovation giant invested a staggering $1.5 billion into four separate blockchain companies between September 2021 and June 2022. M12, Microsoft’s venture capital fund, funded $20 million into a Web3 startup- Space and Time, as the tech giant wants to focus on shedding light on decentralising data.The total value locked in DeFi protocols is over $78 billion and has increased 10x since May 2020. There is no question that DeFi will continue to grow, which is why investors want to and will continue investing in DeFi and Web3 projects.
