# ReDeFining DeFi

*A sectoral deep dive*

By [Coin Kotei](https://paragraph.com/@coinkotei) · 2024-12-13

---

Based on the original datonomy™ methodology and the publicly available approximated list of underlying assets as of late 2022, I came up with a structured plan for re-evaluating the existing framework, specifically focusing on the decentralised finance (DeFi) sector and its sub-sectors, since it encapsulates about 20% of the entire classification and arguably has the most innovation happening.

As a result of the sub-sector analysis, the following updated token analysis framework is proposed:

*   **_301010, Decentralised Exchanges  
    _Definition**: Protocols enabling peer-to-peer asset exchanges using automated market-making or order book models.  
    **Example:** $UNI
    
*   **_301020, Derivatives Trading  
    _Definition**: Platforms facilitating the creation and trading of derivatives like options, futures, and synthetic assets.  
    **Example:** $DYDX
    
*   **_301030, Decentralised Lending  
    _Definition**: Protocols offering lending and borrowing services, often using collateralised assets in liquidity pools.  
    **Example:** $AAVE
    
*   **_301040, Stablecoin Issuers  
    _Definition**: Protocols managing the issuance and governance of stablecoins.  
    **Example:** $MKR
    
*   **_301050, Prediction Markets  
    _Definition**: Protocols enabling users to wager on the outcomes of events, leveraging blockchain-based decentralised predictions.  
    **Example:** $GNO
    
*   **_301060, Asset Management  
    _Definition**: Platforms offering portfolio management tools for optimising yield or managing risks in DeFi.  
    **Example:** $YFI
    
*   **_301070, Crowdfunding  
    _Definition**: Platforms enabling peer-to-peer funding for projects using tokenised governance mechanisms.  
    **Example:** $GTC
    
*   **_301080, Insurance  
    _Definition**: Protocols offering decentralised risk mitigation services, such as smart contract failure or hack insurance.  
    **Example:** $NXM
    
*   **_301090? Yield Optimisers, TBD  
    _Proposed Definition:** Carving out protocol-specific yield farming out of Asset Management due to its growth in popularity  
    **Example:** $CVX
    
*   **_3010100? Liquid Staking, TBD  
    _Proposed Definition:** A sub-sector for liquid staking governance tokens due to staking innovation and not a direct fit into Decentralised Lending or other sub-sectors  
    **Example:** $LDO
    
*   **_3010110? RWA Tokenisation, TBD  
    _Proposed Definition:** A sub-sector for RWA initiatives facilitating the tokenisation of physical assets and not a direct fit into Decentralised Lending or other sub-sectors  
    **Example:** $ONDO
    
*   **_3010120? Restaking and Liquid Restaking, TBD_**  
    **Proposed Definition:** A sub-sector for restaking and liquid restaking governance tokens due to restaking innovation and not a direct fit into Liquid Staking or other sub-sectors  
    **Example:** $EIGEN
    

This proposed structure ensures alignment with the original methodology while addressing the rapidly evolving DeFi landscape.

I would be happy to hear your thoughts on the additional sub-sectors, proposed methodology and approach, as well as prioritisation for the future analyses' direction.

Follow for first sub-sectoral analyses in the coming weeks, introducing new assets to each sub-sector, removing the old ones from the original methodology and cross-sectoral performance review for the year of 2024 as we wrap up this exciting year and gear up for an even more exciting 2025.

* * *

Sources:

*   [https://www.msci.com/documents/1296102/33887102/Datonomy+Methodology.pdf](https://www.msci.com/documents/1296102/33887102/Datonomy+Methodology.pdf)
    
*   [https://sectors.coinmetrics.io/](https://sectors.coinmetrics.io/)
    
*   [https://coinmetrics.io/datonomy/](https://coinmetrics.io/datonomy/)
    
*   [https://gitbook-docs.coinmetrics.io/reference-data/datonomy-overview](https://gitbook-docs.coinmetrics.io/reference-data/datonomy-overview)
    
*   [https://docs.coinmetrics.io/api/v4/#tag/Catalog/operation/getCatalogExchangeAssetMetrics](https://docs.coinmetrics.io/api/v4/#tag/Catalog/operation/getCatalogExchangeAssetMetrics)
    
*   [https://coinmetrics.substack.com/p/state-of-the-network-issue-277](https://coinmetrics.substack.com/p/state-of-the-network-issue-277)

---

*Originally published on [Coin Kotei](https://paragraph.com/@coinkotei/redefining-defi)*