More recently, it was also launched on Cosmos, with a vision to become a ‘DeFi hub’ in Cosmos’s model of hubs and spokes.
It allows users to deposit crypto-assets and borrow USDX, Kava’s stablecoin. Kava is another DeFi project that provides interoperability to users. Ren reached its all-time high in July 2020. Did you know there’s more Bitcoin on Ethereum than on Bitcoin’s own Lightning Network?
In its own words, Ren is “bringing BTC, BCH, and ZEC to your Ethereum dApp”, which is a fairly exciting idea in itself. In other words, it solves the problem of interoperability and allows users to carry out permissionless and private transactions. Ren is a DeFi protocol that aims to provide access to inter-blockchain liquidity for all dApps. Augur’s cryptocurrency REP is currently ranked at #50 and saw its highest prices in December 2017 and January 2018 when it breached the $100 mark. The underlying concept is the ‘wisdom of the crowd.’ It allows users to bet on anything – from sports to the economy – at low fees and with guaranteed payouts. It is an application of blockchain and cryptocurrency to improve the prediction markets. Launched in July 2018, Augur is essentially a decentralized prediction market that runs on the Ethereum blockchain. The SNX coin prices have accelerated upwards since the end of May 2020 and reached a peak in July. The project was initially started as a stablecoin project but later shifted to DeFi. Therefore, users hold Synths without actually holding real-world assets. #4 Synthetix Network Tokenīuilt on Ethereum, Synthetix is a token trading platform that allows users to bet on synthetic assets, also known as ‘Synths.’ Synths mirror prices of real-world assets such as currencies, commodities, or gold. Its unique features also include flash loans, uncollateralized loans, unique collateral types, and rate switching.Īlso launched in 2017, Aave prices reached a peak in January 2018, followed by a long period of dip until it eventually spiked again last month. #3 AaveĪ decentralized, flexible, scalable, and non-custodial money market protocol, Aave allows users to borrow and lend a range of cryptocurrencies using varied or stable interest rates. Launched in 2017, the Compound cryptocurrency’s price touched $350.95 in June 2020. In other words, borrowers and lenders can lock their crypto-assets in the protocol, and the interest rates that they pay or receive on their assets depending on the demand and supply of each crypto-asset in the market. Therefore, this would allow users to exchange the time value of Ethereum assets. It is centered around enabling people to borrow and lend loans using DeFi systems and establishes money markets with algorithmically set interest rates based on supply and demand. #2 CompoundĬompound is a DeFi protocol built on Ethereum. It hit its highest price so far in July 2020 at $8.66. Since May 2019, ChainLink’s price trajectory has been on a fluctuating but upward climb. This makes tamper-proof and secure transactions practically possible via smart contracts. Launched in 2017, Chainlink, as the name suggests, solves what is called ‘the oracle problem,’ by providing a reliable connection to external data that is end-to-end secure.
Executing any smart contract requires external data such as API or off-chain data may be required. But there is still a connectivity problem – smart contracts cannot access data on their own. We know the crucial role smart contracts play in DeFi systems. Let’s take a look at some of the most exciting DeFi projects to watch out for. Challenges such as interoperability, addressing market volatility, and accessing external data are being addressed, among many others. Multiple projects have come up – some that attempt to solve an existing challenge with the technology and some that seek to expand its applications. The attempts to recreate traditional financial instruments in a decentralized architecture have gathered much pace and enthusiasm. DeFi, short for Decentralized Finance, has been the subject of much excitement.
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