Over time, the internet has experienced abrupt evolution from read-only, static content to more interactive and decentralized experiences. We have shifted from Web 1.0 to Web 2.0 and now Web 3.0. There have been innovations such as decentralized finance (DeFi), blockchain, the metaverse, cryptocurrencies, and even distributed ledgers. For the past few years, cryptocurrencies have been the latest hype among investors, with a <a href="https://coinmarketcap.com/">market capitalization</a> of $2.2 trillion as of December 2021.

Cryptocurrencies, however, have not received the best welcome from everybody. Governments worldwide are looking to regulate them, with China and Singapore already banning crypto transactions. The reason is that they have been associated with money laundering and criminal activity. With crypto issues such as high volatility, scalability, security, and limited use cases, maybe it is about time we shifted focus to DeFi and Web 3.
<h2>Changing How Finance Works</h2>
With DeFi and Web3, consumers will be able to manage their finances in a whole new way. Notably, <a href="https://www.cryptoknowmics.com/news/common-types-of-defi-options">DeFi</a> forms the basis of blockchain technology and digital assets. DeFi is a type of finance that, as the name indicates, does not rely on centralized intermediaries (such as banks) to function because everything is already on the blockchain. Web3, on the other hand, is the next generation of the internet that will feature DeFi and other blockchain systems. With this in mind, the two are the gateway to truly peer-to-peer financial services that include lending, insurance, borrowing, and payments.

DeFi will transform the way banks and financial advisors operate. For instance, it will allow consumers to create and manage their accounts and investments using a "robo-advisor." The same technology will enable firms to work with new clients who traditional systems would not have previously served. 

Cryptocurrencies have primarily been focused on daily price swings and investment profits. DeFi, on the other hand, has been focused on creating a more long-term approach to establish itself as a pillar of the economy and put emphasis on its utility and potential. 
<h2>Transforming Web 3.0 with Data and AI</h2>
Financial institutions face a significant problem due to networked devices and enlarged ecosystems, as well as data quantities that must be collected and stored. Data will undoubtedly be a crucial asset that banks must better monetize for future development.

<a href="https://www.cryptoknowmics.com/news/the-significance-of-blockchain-in-web-3-0">Web 3.0</a> allows financial institutions to develop and deliver differentiated products and services that meet the needs of today's consumers. Therefore, it is essential for banks to continuously invest in digital innovation and transform their physical interactions with consumers. Hence, ensuring a seamless omnichannel banking experience.

Banks need to rethink their customer journeys to deliver more personalized and relevant banking experiences with digital technology. It means aggressively leveraging digital interactions.

Due to the increasing volume of data, countries like Singapore, Japan, and Australia have enacted laws requiring local data storage.
<h2>The Web 3.0 Landscape is Evolving</h2>
The evolution of the internet has been centered around Web 3.0, which refers to the use of distributed ledger technology(DLT) and artificial intelligence (AI), and machine learning (ML).

Web 3.0 is expected to bring about a convergence of various technologies such as blockchain, DeFi, and artificial intelligence to improve data ownership and control. It will also enable the creation of hyper-personalized customer experiences. Virtual and augmented reality will enable increased online and physical convergence, <a href="https://www.cryptoknowmics.com/news/spatial-is-livestreaming-boss-beauties-womens-day-event-in-the-metaverse">three-dimensional</a> internet, and engaging websites.

The rapid emergence of digital technology has created new businesses and made it possible for institutions to provide various new services. These services can reshape and revolutionize the future of money, digital assets, and payments.
<h2>Demand for Financial Change Among Consumers</h2>
As much as it's a bit early for DeFi and Web3, it is time to make observations about the shift right now. Consumers are more interested in decentralizing their finances. In the past, they relied on their primary bank for financial services, but now they use multiple banks and digital wallets. Notably, they do all this primarily in the comfort of their smartphones.

The move is more out of preference than it is preference. Even though many people are looking for ways to improve their financial relationships, there is still a lack of innovation in the financial services industry. With the rise of digital financial services, it is more cost-effective to work with multiple providers.

Although decentralized financial services are not the same as decentralizing a wallet, it creates an accessible environment for consumers to dive into DeFi. Despite the various advantages of decentralized financial services, industry leaders still need to improve their offerings to compete with their DeFi competitors.
<h2>Integrated Value Exchange</h2>
It's not crazy to think that we'll have a world where almost anything can be valued and transacted in the future. This concept is called integrated value exchange. Despite the immense potential that tokenization offers, the lack of liquidity prevent users from effectively managing it. It is where the <a href="https://www.cryptoknowmics.com/news/is-it-possible-for-nfts-to-revive-the-present-bearish-defi-cycle">innovation</a> of DeFi comes in.

In DeFi, liquidity is supplied and pooled across several cryptocurrencies to facilitate decentralized trading. Rather than needing to match a buyer and seller at the moment of transaction, creating pools of liquidity that may be drawn from quickly. DeFi incentivizes users who provide up-front liquidity to create a marketplace between assets. An algorithm then calculates how much of a given asset you should get based on the price.

The concept of decentralized value can transform how people pay for goods and services. In the next decade, they will be able to shop for everything from clothes to cars using a digital wallet.
<h2>Author’s Thoughts</h2>
The value of the DeFi industry has exploded, with the total value locked <a href="https://defillama.com/">now</a> at $228.49 billion. The robust growth is likely due to yield and speculative activity factors. However, they also noted that the industry's increasing popularity is linked to various long-term trends.

While some of the products in the DeFi ecosystem are unique, they also have many similarities to traditional finance. For instance, no banks or insurance companies are operating in the marketplace. According to experts, the potential disruption that DeFi can bring to the financial industry is very promising. They also believe that its use cases could support the creation of new market valuations.

The Future of DeFi: Is it Time to Shift Focus to DeFi and Web 3?

Over time, the internet has experienced abrupt evolution from read-only, static content to more interactive and decentralized experiences.

Adam is an outgoing young lad who likes adventures and discovering new things.Despite his boring life, he loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.

The Future of DeFi: Is it Time to Shift Focus to DeFi and Web 3?

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