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By Vincent MARTIN, Managing Director at Deloitte Luxembourg
Decentralized Finance, or DeFi, experienced a tremendous rise in 2020 and 2021. During that period, we witnessed an explosion of DeFi projects with compelling use cases and investment opportunities. Indeed, with FED(1) and ECB(2) rates close to 0% at that time, investors seeking higher yields turned to the world of DeFi, where they could achieve returns of 20% to 30% on stablecoins. Such returns led significant amount of capital into DeFi.
However, the high yields paid by DeFi protocols were sustained by the strong on-chain activity, which generated massive transaction fees and interest income from lending protocols. For some projects, this model was supported by the fact that a...
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