Investing in Decentralized Finance (DeFi) at the start of the 2020 decade could turn out to be an idea as bright as that of having bet on Bitcoin 10 years ago. Indeed, this is the emergence of a new financial paradigm that a handful of early adopters are currently witnessing. These pioneers are torn between excitement generated by quick wins – and sometimes even astronomical -, and legitimate concern about the strength and credibility of this new edifice.
However, if Decentralized Finance is unprecedented both by the vigor of its growth and by the exoticism of new models, it nevertheless meets certain fundamentals, which are universal. And among these, the fact that many reckless will lose their feathers and that the flashiest projects of today may be gone in a few weeks.
In this context, rather than embarking on the latest shimmering project out of nowhere, it might turn out to be smarter to position yourself alongside older industry players whose robustness and credibility more than make up for it. absence of “hype” around their activities. Discover today 5 projects that could well write the next chapter of Decentralized Finance, that of maturity and global adoption of the models of tomorrow.
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DeFi in Crash-Test mode
Except for having spent the last 3 months in the International Space Station, you have hardly been able to get through the crypto sensation of summer 2020: the rise of Decentralized Finance (Challenge). There is a lot to say about this short but particularly intense period which has seen the worst come together with the best.
Rise and fall
The better, because for the first time, the mechanics of a true alternative finance were able to be deployed in real conditions, nourished by a significant inflow of capital allowing it to gain credibility and maturity. The TVL (Total Value Locked, the total amount of crypto capital locked in DeFi devices) has thus continued to increase, exceeding $ 11 billion in October 2020.
This growth, which we can without fear of abuse of language qualify as exponential, has thus enabled many initiatives to move from the stage of simple think tanks to that of real formal demonstrations of the relevance of new models. We will think in particular of Yield farming – or yield farming – whose meanders you will better understand in this dedicated article.
However, the excitement induced by this impression of having discovered a kind of machine to generate endless profits also provoked the worst : a proliferation of rapidly assembled, unaudited projects carried out by teams that are often anonymous. This adulterated cocktail was not long in provoking, in a very predictable way, thunderous collapses (we embrace YAM very strong), battle exit scams and more generally a massive evaporation of capital from thousands of unwary investors.
And even for those, more talented or lucky than the others who have managed to maneuver without too much damage in the maelstrom of this staggering summer 2020, the colossal transaction fees charged on a blockchain Ethereum – which will have shown in passing all its organic limits -, will have been enough to discourage the most motivated.
The ransom of crypto-success
This period, if it will leave many on the side, durably sickened by the exercise is in a way specific to the crypto ecosystem whose alternation “Irrational excitement – speculative bubble – collapse – hangover” is kind of a trademark.
We will remember for this purpose the “madness of ICOs” of 2017 which followed the same type of cycle. However, if at the time the phenomenon had spread over 18 months, this time it will only have taken a handful of weeks to witness the entire process …
Should we therefore consider that Decentralized Finance has failed? To be satisfied with this analysis would, however, be to ignore the importance of what is happening and to miss the real result of this surreal summer: demonstration of the operational potential of Decentralized Finance and the ability of its new models to partially replace a centuries-old centralized architecture that has never faced such competition!
As such, see the giant Binance launching into the race is a sign that never fails. Two observations should be made:
- The future of both the crypto industry and traditional finance (CeFi) will be written in DeFi letters
- In the end, the bubbling of innovations carried by multiple micro-projects will be largely absorbed and offered to the general public. by older crypto players, more traditional and more sustainable.
The 5 projects mentioned today offer DeFi components, or are putting themselves in battle order to be able to deploy them shortly. They both have two essential characteristics: the solidity of already operational crypto initiatives and the ability to boost their potential by implementing DeFi mechanics. This combination of characteristics thus offers them the potential to become future giants of DeFi 2.0, actors who will be able to standardize and secure the sector in order to make it accessible to as many people as possible.
Feel Mining offers you DeFi, turnkey
And to wait comfortably before the possible explosion of these 5 projects, you will be happy to learn that each of them already comes with staking or from masternodes. These devices allow you to obtain rewards via setting collateral a certain amount of cryptoassets. Did this sentence put you in a daze? Get up to date on the Investor’s Primer with this article.
Feel Mining that you know to know well if you regularly browse the Tribune du Mining, has thus made sure to make this promising panel accessible to its community of investors. After registering on the official website, it will only take you a few clicks and as many minutes to position yourself on the projects you have selected and start collecting dividends in tokens.
You can discover the project ALGORAND and his token ALGO more in this article.
The initial promise of ALGORAND
Algorand is part of the current trend – eminently strategic – the emergence of blockchains “infrastructures ”, or those which do not seek to limit their value proposition to very specific services (such as for example the tokenization of financial assets, or oracle services), but plan to serve as a medium for the future“ Internet of value ”whose growth is inevitable.
How ALGORAND integrates DeFi into its roadmap
Algorand’s very recent update added new smart contracts at the base layer of the network, the fast catchup and the rekeying. This implementation, which increases the performance of the blockchain and alleviates many processes, is clearly motivated by the DeFi shift of the project. A detailed article from the developer Gonzalo Martinez looks back on these developments, highlighting in passing the advances in NFT and multi-signature (essential for DeFi and the tokenization of assets such as derivatives, options, swaps or securities).
You can find out more about the project Tezos and the XTZ token (and its staking) on this dedicated article.
The initial TEZOS promise
We continue in the discussion of infrastructural blockchains. Tezos is a project with a strong French touch, well known in the ecosystem both for the dynamism of its partnerships and an obvious ambition to influence the industry. Tezos is also regularly mentioned when we talk about notions of governance, “liquid democracy” and voting on blockchain.
How TEZOS integrates DeFi into its roadmap
At the end of October 2019, Jonas Lamis, CEO of Tezos, announces the launch of StakerDAO.
StakerDAO is a Decentralized Autonomous Organization – Decentralized Autonomous Organization (DAO) – which combines decentralized governance and Challenge. Everything is based on blockchain Tezos (XTZ) and on its governance token STKR. Holders of STKR make proposals on the management of the portfolio of assets of StakerDAO but, also on applications Challenge to develop.
You can find out more about the project COSMOS and the ATOM token (and its staking) on this dedicated article.
COSMOS’s initial promise
COSMOS and its ATOM token pushes to guarantee the interoperability of existing and future networks, allowing the truly operational emergence of a global crypto-Internet which will make the exchange of value of peer-to-peer without borders as simple. and ergonomic than sending an email in 2020.
How COSMOS integrates DeFi into its roadmap
Last July, COSMOS joined forces with Polkadot and Terra Network to unveil a new decentralized loan product (lending): Anchor.
Presented as a pure savings product, rather against the current of project volatility as Compound or Maker, Anchor is a DeFi initiative that foreshadows the future of purely decentralized financial products. In addition, COSMOS was highlighted by Messari analysts for the robustness of its protocol and the profitability of its DeFi and stacking devices.
You can find out more about the project LOKI (and its staking) on this dedicated article.
LOKI’s initial promise
Fork of MONERO, LOKI is a protean project that has placed data privacy at the heart of its value proposition. Besides a crypto currency, LOKI is also an encrypted messaging service and an anonymous browser similar to TOR.
How LOKI integrates DeFi into its roadmap
We will start by mentioning the DEX (decentralized exchange platform) BlockSwap, currently under construction, an interface inspired byUniswap and which will allow fluid liquidity exchanges, on funds of liquidity pool.
If the Blockswap project is moving forward, it is above all the announcement by the team of the appearance of a version “”wrapped“(” Wrapped “) of the LOKI token which commands attention. This ERC-20 version of the original crypto will be able to evolve on the blockchain Ethereum in this new form, and therefore able to benefit from the new potential brought by the mechanics of the Decentralized Finance, and in particular yield farming. Concretely, LOKI token holders will be able to fund Pools of liquidity on the pair LOKI / ETH on Uniswap, and get rewards
LOOM’s initial promise
The project Loom is an overlay of the Ethereum network. The goal of the project is to improve the Ethereum architecture in order to avoid congestion of its network by increasing the number of applications. The project has developed the “Loom SDK” tool which makes it easy to create blockchain networks commonly known as “Sidechains”. Loom focuses more particularly on data management, particularly in relation to health.
Note its generous staking mechanism which offers nearly 12% dividends per year.
How LOOM integrates DeFi into its roadmap
LOOM technology has been implemented in architectures BinanceChain and TRON, allowing in particular the implementation of the DAI stablecoin. LOOM’s ambition is clear: not only to offer purely DeFi services, but above all to be a leader in the strategic sector ofinter-blockchain operability.
While “DeFi”, Yield Farming ”and other“ TokenSwap ”are buzz words whose power has not escaped anyone in the industry, the greatest caution should be exercised when it comes to forays into this new branch. As such, and even if the promises of returns seem a little less spectacular, the informed investor will often have every interest in favoring well-established projects, whose teams are perfectly identified and which will privilege the work and the coherence to the effect. fashion. To discover this new world in the best possible safety conditions, go to the new DeFi section of Feel Mining and let yourself be guided!
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Nice to meet you, I’m Hellmouth! Editor-in-chief of Cryptocurrencies, the crypto medium that you do me the honor to survey right now (well done, you have good taste).
Crypto-enthusiast of the second hour, nothing is more important to me than to support the global adoption and democratization of the treasures offered by blockchain.
I write articles between cocktails in Tahiti, my adopted island, and don’t mind, if the opportunity arises, to feast on a plump scam or a little too enterprising Ponzi scheme.
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