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We often get asked why certain assets aren’t classified as “DeFi” on our screener
It’s become a nebulous term referring to any asset tangentially related to decentralized finance but now we’re going to more clearly define it
1/ https://messari.io/screener/defi-assets-7EE8EDB1
It’s become a nebulous term referring to any asset tangentially related to decentralized finance but now we’re going to more clearly define it
1/ https://messari.io/screener/defi-assets-7EE8EDB1
In order for a token to be classified as DeFi it must meet the following criteria:
Its primary use must be financial in nature
This means lending, borrowing, exchange, derivative/synthetic asset issuance or exchange, asset management, or prediction markets
Its primary use must be financial in nature This means lending, borrowing, exchange, derivative/synthetic asset issuance or exchange, asset management, or prediction markets
The protocol must be permissionlessThe code is open-source allowing anyone to build on top of it without going through a third party
Option to be pseudonymous Users are not forced to go through KYC
Non-custodial Users have the option to hold onto their own funds
Decentralized governance Upgrade decisions and administrative privileges are not held by a single entity or at least a credible path exists towards removing them
So that’s what classifies but it's helpful to show common examples of assets people feel we exclude but that we don’t believe fit our definition
@chainlink is the most popular oracle used in DeFi and clearly stands to benefit from its continued growth BUT...
@chainlink is the most popular oracle used in DeFi and clearly stands to benefit from its continued growth BUT...
Porting data into smart contracts is not in and of itself a financial application
From that same reasoning, smart contract platforms that are also necessary to facilitate DeFi applications do not have their native tokens included
From that same reasoning, smart contract platforms that are also necessary to facilitate DeFi applications do not have their native tokens included
Lastly, tokens that are tied to the financial activities of a company like BNB or NEXO are not DeFi because they are not open-source, non-custodial nor is the governance process sufficiently decentralized https://messari.io/article/messari-methodology-what-constitutes-a-defi-token?utm_source=jpurd17&utm_medium=thread&utm_campaign=defimethodology
