How have the four basic financial elements evolved in DeFi?

Abstract: Most factors driving market development can be attributed to four basic financial elements: liquidity, leverage, risk, and arbitrage. This article outlines the evolution of DeFi through these four aspects. Although it remains experimental, DeFi has matured significantly since I first wrote about it in June 2019. As DeFi protocols launch v2 and v3, I revisited this industry and how it has evolved. After working in the financial industry for many years, I realized that most factors driving market development can be attributed to four basic financial elements: liquidity, leverage, risk, and arbitrage.