I’ll try to assemble a logical DeFi puzzle for Cosmos L1 chains.
In 2021 the DeFi revolution was actively forced. According to various estimates there were 2 millions of active users. There are rather active participants in pools/landings/synthetic assets and other tools then ordinary swap users
The Economist actively shilled decentralized finance and predicted TVL (total value locked) growth in hundreds of times as well as about 30 million of active users by the end of this decade.
So we can assume that more than one injection of money into the crypto economy is expected
Defi protocols or DeFi dApps are built on L1 blockchains like Ethereum or L1 appchains like in Cosmos (osmosis , umee etc ). In order to provide safety for investors in Defi protocols, the TVL of the project should not exceed the L1 mcap of the blockchain on which it is built. For example, the TVL of the Junoswap DEX must not exceed the mcap L1 of the Juno blockchain itself.
What leads us to the possible gem that came out this year — Umee.
Umee , Brent-xu — is one of the creators of the Cosmos SDK framework and raised 6.3mil$ in a private round from such tier 1 funds as Polychain , Alameda , Coinbase Ventures , Consensys and others.
Umee is too cheap. Its market cap is only $25-30mill. To build something on it it needs to boost market cap and pump the price. Now answer the question: «is it possible to lock liquidity of hundreds of millions of dollars on such blockchain»? The answer is «no, because the blockchain itself costs 25-30 million dollars, you can’t lock hundreds of millions of dollars in Umee».
So we can conclude that Umees mcap doesn’t meet the level of security that is needed to create large liquidity that could compete with other L1 ecosystems. But with such funds on board, it seems to me that growth is inevitable. However I do not give any financial advice,
The same applies to other L1 blockchains that have a small cap and backed by big funds