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Definition: DeFi 2.0


The second generation of decentralized finance protocols and applications. Starting in 2021, crypto wallets emerged that are easier to use than the first round of wallet interfaces, many of which were downright awful. DeFi 2.0 protocols also attempt to provide stronger governance of projects as well as offer greater incentives to users.

The DeFi industry is relatively new, and initial products tended to be aimed at crypto enthusiasts, who had an early understanding of DeFi principles and processes. In order for DeFi to become mainstream, the software has to be as easy to use as a Web browser. In addition, DeFi applications must often integrate and cooperate with the existing centralized infrastructure. All of this takes time, and DeFi 2.0 is an umbrella term for the latest advances beginning in the 2020s. See DeFi and crypto glossary basics.