DeFi is heating up. A secondary wave of interest is surging following the initial DeFi boom during the summer of 2020 that has already seen the sector grow to a market cap of over $35 billion. In recent weeks, blue chip DeFi tokens have soared, with household names UNI, AAVE, SNX, and others experiencing new highs.
While several so-called blue-chip DeFi protocols have become well-known in the crypto space, others with huge potential have gone under the radar despite having working products and impressive traction. Insiders and the crypto-savvy might know of these projects, but they still present significant upside for the casual or even new crypto investor.
So what are the projects to look out for in 2021, and why are they worth watching?
Radix is the first layer 1 protocol built specifically to serve the rapidly growing DeFi industry, solving the scalability issues that persistently hamper protocols like Ethereum. Radix has recently started receiving significant attention across the sector, no surprise given its tech outcompetes across all metrics. It provably delivers frictionless linear scaling without breaking composability, challenging Visa-like speeds.
Radix’s last consensus algorithm already demonstrated 1.4 million TPS, the current algorithm ‘Cerberus’ is theoretically infinitely scalable. Radix is currently the only solution that solves atomic composability on a sharded platform. A successful $12.7 million eXRD token sale has already been completed and will later be exchangeable for native XRD tokens when Mainnet is released in Q2.
In combination with its own functional programming language, Lego-like building block development environment, and on-ledger developer incentives, Radix's unique ecosystem seems to offer the only future-proof solution to the blockchain trifecta, delivering the level of scalability, security, and decentralization that the expanding DeFi industry requires without having to choose a trade-off. Assuming a successful product rollout, significant growth and adoption can be expected from this excellent project.
Finxflo is the world’s first regulated hybrid liquidity aggregator, providing a liquidity sponge for users to execute trades at the best prices via more than 25 CeFi and DeFi venues. It compiles this liquidity through one platform without the need for multiple accounts, delivering minimal slippage, reduced risk, and zero withdrawal fees. It offers protection from front running and access to optimal prices without limitations on liquidity supply.
The Finxflo ecosystem is fueled by the native FXF token, a blockchain 3.0 asset allowing users to mine FXF tokens by trading on the platform. FXF holders access additional features including, staking, liquidity mining, governance voting rights, and reduced trading fees. It also opens up the world of DeFi protocols and cross-chain interoperability across the Ethereum and Tron ecosystems, introducing users to yield farming, liquidity provision and arbitrage opportunities. Finxflo recently announced that the final stage of their successful token-based capital raise will be held on Polkastarter in early February.
DAOVentures is going after one of the most important roles in the DeFi market: educating and onboarding the next wave of DeFi users, regardless of their experience level. Currently, the DeFi market is flooded with a quick information cycle, creating a tricky environment filled with challenging learning curves and complexities. For the novice or aspiring DeFi user, there was previously no product that could assist in simplifying DeFi - until DAOVentures came to market.
DAOVentures is helping make DeFi investments simple through their innovative robo-advisor and automated money manager. From sophisticated DeFi investors to first-time DeFi users, DAOVentures offers a robust set of tools to evaluate, track, and invest in various DeFi opportunities within a safe and secure application. Using smart contracts, users will always remain in control of their funds as DAOVentures offers self-custody. Keep an eye out for their highly-anticipated token launch in February.
Manta Network is a set of open-source, secure and auditable protocols based on Substrate frameworks. It uses zkSNARK and will run as a layer-one Polkadot parachain to provide complete end-to-end anonymity, high throughput, and high cross-chain interoperability.
Manta Network allows users to swap Polkadot and its parachain tokens with corresponding privacy tokens, pay with privacy tokens, redeem base coins from privacy tokens, and anonymously trade private versions of tokens on the platform, previously challenging to leverage in DeFi.
Manta Network solves the existing pseudo-anonymity issue of DeFi transactions, which provide solutions to front-running and unauthorized transaction or asset viewing. The MANTA utility token offers both governance and redemption value from privacy-preserving network usage and growth in DeFi, with fees collected for minting or exchanging private tokens.
e-Money is a layer 2 solution for fiat, innovating with a new form of multi-currency stablecoins that are fully backed by bank deposits and government bonds, such as the eEUR. In contrast to collateralized stablecoins, e-Money’s currency-backed stablecoins are interest-bearing and have more in common with a bank deposit than cash, so can increase in value over time. This process makes them more resilient to changes in the economic climate while offering benefits to owners of these fiat-backed tokens with positive interest.
e-Money is built on Cosmos, an ecosystem of independent but interoperable parallel blockchains. NGM (Next Generation of Money) is e-Money’s staking token, securing the e-Money network by bonding with one or more validators. NGM will be inflated by 10% per year and distributed as staking rewards. By staking NGM, holders of these bonded tokens will receive a pro-rata share of the newly minted NGM tokens. In addition to this, the stablecoin supply is inflated (1%) and sent to a NGM buyback module on chain. This creates a buy & burn scenario that will decrease NGM’s supply and create buy side support.
ExeedMe is an innovative platform that combines NFTs, DeFi, and gaming to help gamers monetize their gameplay, regardless of their skill level. Gamers on the platform can earn by winning in matchmaking events or with friends, by having an engaged audience, and by staking the company's native token ($XED) to earn unique NFTs. The company recently highlighted the platform’s functionality in their first live trial which brought together 16 gamers from their community to play with 4 of the leading Counter Strike Global Offensive gamers.
ExeedMe’s beta test marks one of the first products to effectively combine DeFi, NFTs, and gaming into an easy to use platform. The company came to market in late 2020 after launching on Polkastarter’s launchpad and amassing an audience of over 10,000 global supporters. ExeedMe will be a must watch for anyone interested in gaming and also interested in the various DeFi incentivization mechanisms that allow for vast earning potential on the platform.
Based on Ethereum and Wanchain, FinNexus is an up-and-coming DeFi platform that allows users to trade options in a seamless and permissionless way. The platform does not rely on traditional order books to exchange options. Rather, liquidity is pooled and premiums are shared among participants through an innovative system powered by FNX, the platform’s token. The mechanism makes it easy to buy and exercise BTC, ETH, LINK, SNX, and MKR options in a secure and decentralized way.
The team behind the project is having a busy January, launching upgrade after upgrade, including a new UX/UI and a mining mechanism that will bring the rewards multiplier for staking up to a whopping 320x. They are now working on a pool with algorithmic stablecoins and potentially a one-of-the-kind risk-hedging product.
With options booming in legacy finance and FinNexus growing at a rapid pace, there is little doubt that FinNexus is one of the most promising projects around.
Since launching, finance.vote has quickly become one of the most exciting DeFi projects in the market. The robust platform includes a decentralized auction system, a farming product called yield.vote, and prediction markets which will allow crypto influencers to publish their predictions for top gainers in the market and determine how much influence they really have.
Besides providing consistent market alpha, finance.vote gives users the ability to earn FVT tokens in a variety of ways, including by participating in vote markets which are currently rewarding users with up to 5x-6x their gas costs in FVT tokens. finance.vote has recently partnered with leading DeFi companies including CommerceBlock, Tidal, and Reef, with more partnerships in the works.
Soon, finance.vote will launch their own snapshot voting platform, which utilizes quadratic voting and aims to bring a governance upgrade to all of the DeFi space. Together these “consensus apps” create a dApp suite that will deliver all the tools required for spinning up a successful decentralised organisation and discovering the price of the new wave of digital assets.
Alien Worlds combines the rapidly growing DeFi and NFT industries, creating a gaming environment that includes token staking, mining, and virtual land sales. According to DappRadar, Alien Worlds is currently the second biggest blockchain game and 7th biggest over all dApps. In a nutshell, Alien Worlds utilizes both the Ethereum and WAX blockchains to offer players a new way to buy, sell, and earn digital collectibles as they work their way through a strategy game across six alien planets comprising 3,343 land packs.
Each land pack contains a single land NFT and seven other NFTs that accompany it, much rarer than in projects like Decentraland or The Sandbox. Users can acquire other NFTs, like mining tools, to upgrade and enhance their experience and rewards in the game.
Owning land introduces the benefits of Trilium (TLM), the game’s native token. Land owners can earn TLM by mining the land themselves or allowing others to do so in return for a commission, delivering DeFi-like yielding properties. TLM can be staked to earn additional rewards and governance rights, with each planet having the potential to become its own DAO. Planets can then develop more unique games with extra rewards and NFTs on offer, expanding the metaverse. Keep an eye out for Alien Worlds in 2021.
Shroom Finance is a DeFi protocol and DAO focused on in-game asset minting, launch, and trading. The protocol is wholly driven, owned, and governed by a community of vested users.
Shroom Finance sees a future where in-game assets, fungible and non-fungible, trade freely in a decentralized fashion. While any token can be tradeable on the Shroom platform, the clear focus is on targeting the $10 billion in-game asset industry on a decentralized platform that facilitates its ownership to a community of gamers.
Shroom Finance is laying the foundations for a truly decentralized ecosystem that enables minting, final ownership, and cross-platform trading of virtual items. It helps game developers to decouple and easily bootstrap their in-game economic structures and currency systems.The SHROOM token acts as a governance token for the direction of the protocol, with its value directed solely by the community and its token holders.
Is 2021 the Year of DeFi?
While the growth potential is substantial, DeFi can only gain mass adoption by breaking down the obstacles holding it back. With projects like these removing the remaining barriers, 2021 could well be the year that decentralized finance hits the mainstream.
Disclaimer: This post is informational in nature and does not constitute financial advice. Please consult your financial advisor before investing in any cryptocurrencies or exploring new technologies as they could be volatile and pose risks for the average investor. The writer is a user, investor, or could have a personal relationship with some of the companies mentioned.
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