Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights – a newsletter created to bring you the most significant developments of the past week.

The past week in DeFi has seen new advancements in zero-knowledge proofs (ZK-proofs) as a scaling solution as more DeFi protocols embrace the technology.

A new US Senate DeFi bill has attracted a lot of attention – although not necessarily of the positive kind – as several players have come out to slam the “impossible” legislation.

The CEO of the dydx Foundation made a bold prediction that centralized exchanges will eventually become a gateway to DeFi, while Polygon 2.0 laid the foundations for decentralized governance.

The top 100 DeFi tokens had another mixed week of ups and downs, with most tokens continuing to trade in the same range as the previous week.

Centralized exchanges will become gateways for DeFi – CEO of DYdX Foundation

The dYdX Foundation – an independent DeFi non-profit founded to support the dYdX protocol – recently launched a public testnet for its latest version, v4. According to the foundation, this puts dYdX ahead of the upcoming v4 mainnet launch, something the foundation says represents full decentralization for dYdX.

As Cointelegraph recently reported, the July 5 testnet launch represented the fourth of five milestones dYdX set out in its 2022 roadmap toward decentralization.

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Polygon 2.0 lays the groundwork for decentralized governance

Polygon Labs has begun work on an expansion aimed at including all blockchains and applications running on the Polygon network, and seeks to democratize the update process and encourage community participation.

On July 19, the developers of the company proposed to strengthen the governance mechanism for the future roadmap Polygon 2.0 to establish several layers 2 on the network.

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The Coin Center and the Blockchain Association criticize the US Senate’s DeFi bill

Crypto industry advocacy groups have slammed a new US Senate bill for what they say is a confusing approach to regulating the DeFi sector.

On July 20, crypto think tank Coin Center and crypto advocacy group the Blockchain Association released separate statements describing the legislation as a “messy,” “unconstitutional,” and “unconstitutional” way to regulate DeFi.

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Chainlink launches cross-chain bridging blockchain protocol at TradFi

The development company behind the Chainlink protocol and its native LINK token has gone live with its cross-chain protocol aimed at providing interoperability between traditional financial companies, and public and private blockchains.

In a July 17 post on the Chainlink blog, Chainlink Labs product manager Kemal El Moujahid announced that his cross-chain interoperability protocol has launched under early access to Ethereum, Avalanche, Polygon, Arbitrum and Optimism.

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The DeFi liquidity protocol adds the zkEVM Linea rollup developed by ConsenSys

Amidst the growing popularity of layer-2 scaling solutions based on ZK-proofs, decentralized financial liquidity protocol Symbiosis has added support for Linea, a scaling solution based on Ethereum Virtual Machine (zkEVM) for cross-chain exchanges developed by ConsenSys.

Symbiosis said in a statement that Linea is a developer-ready zkEVM rollup, which means it is compatible with Ethereum and thus allows developers to reuse a lot of existing infrastructure to create multi-asset solutions. Linea comprises more than 100 protocols, developer tools and decentralized applications, making it a potentially useful scaling tool for developers in the Ethereum ecosystem.

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DeFi Market Overview

The total market value of DeFi saw a bullish growth after three bearish weeks. Data from Cointelegraph Markets Pro and TradingView show that the top 100 DeFi tokens by market capitalization had a bullish week, with most tokens trading in the green. The total value locked in DeFi protocols remains below $50 billion.

Thanks for reading our roundup of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.