The above introduces some DeFi-related protocols, but there are still some less "hardcore" areas that have not been mentioned, such as algorithmic stablecoins, oracles, layer 2 networks, cross-chain bridges, etc. In fact, there are few areas that are unrelated to DeFi, because it seems that all areas are related to activities such as lending, trading, and liquidity enhancement. There will be no further expansion here.
The important feature of DeFi protocols is "composability". The concept often mentioned in the DeFi field is DeFi Lego, or more formally called "financial primitives", which refers to each DeFi protocol serving as an atomic function that can be combined with other protocols, just like Lego blocks. The vision of DeFi is this: there are some DeFi protocols on the market that implement basic functions such as lending, trading, insurance, etc. When an ordinary user sets their risk preferences, their assets will automatically capture opportunities such as borrowing, trading fees, liquidity mining, etc. through a combination of protocols, and they will purchase insurance for different investment targets. So which protocols will become the "traffic hubs" in this DeFi network, capturing the most intensive asset circulation, and these protocols themselves will gain significant value. Using the Internet as an analogy, it is a kind of traffic thinking, and here the traffic specifically refers to the flow of capital.
Here we can see how the product of blockchain technology implies the possible transformation of traditional capital markets. For example, liquidity mining is a new way of distributing equity assets to users. On the blockchain, a user's account is both their financial account, and it is only under these technological conditions that it is possible to distribute equity assets to users. You can't imagine Amazon distributing stocks to users based on their usage of Amazon before it went public, because Amazon cannot obtain all users' stock accounts at a low cost and solve compliance issues. Another example is DEXs like Uniswap, which provide stockholders with a new choice through trading methods such as liquidity pools, allowing them to not only buy stocks and pay transaction fees to exchanges, but also provide liquidity and earn fees.