I am sure that you are aware of the DeFi craze that is in FULL MOTION as you read this post. The numbers that DeFi projects have managed to post are genuinely staggering. There is now a total of $6.34 billion that is locked inside DeFi smart contracts;
What is even more surprising about this enormous growth is that most of this value came in the past 2-months. In June, the total value of DeFi was just at $1 billion. Since then, the total value has skyrocketed by an additional $5 billion.
With the current cryptocurrency craze concentrated around DeFi, I decided to hunt for projects that have yet to steal the show. I have found a total of 5 viable cryptocurrency projects that have yet to take off, and I believe these will experience this DeFi wave pretty soon.
1. Defi Money Market - (DMM)
DeFi Money Market (DMM) is a new type of interest-bearing cryptocurrency in which users can receive a stable return. Users are guaranteed a certain level of interest, currently set at 6.25%, when the deposit ETH, DAI, and USDC in the DMM Smart Contracts. In return, users receive DMM mTokens.
The deposited funds are used to purchase real-world assets, such as vehicles, and this is what provides stable interest returns for investors. All the acquired assets are transparently made available on-chain.
DMM mTokens can be redeemed for the original deposit of ETH, DAI, and USDC.
- DMG, the governance coin behind DMM, is currently ranked in the 157th position with a $50 million market cap.
- As you can tell, not too many people would even venture beneath the Top 50, let alone the second page of CoinMarketCap, so this means that the average crypto joe should not know too much about it.
- Backed by heavyweight investors including;
- Tim Draper - Super Heavyweight investor with a portfolio that includes the likes of Hotmail, Skype, Tesla, SpaceX, Twitter, Coinbase, and Robinhood.
- Alon Goren - Founding partner at Draper Goren Holm
- Josef Holm - Another founding partner at Draper Goren Holm
- Unlike other DeFi Interest yielding programs, the APR value for DMM comes from real-world assets. [See Here]
- The DMM CEO, Gregory Keough, is a highly experienced veteran. He is fluent in Spanish and has had high profile prior roles, such as being the CEO for Mastercard and other money transmitter companies.
- Data from Santiment shows that, since the start of August, DMG has seen a significant surge in trading volume;
- This shows that this project is only just about heating up.
- Further Santiment data from the Daily Active Addresses shows that the ‘herd’ is still far away - providing a fantastic opportunity for us to get in early;
- Lastly, it is apparent that whales are still accumulating as the total number of ‘bagholders’ with over 100,000 coins continuously increases;
2. bZx - (BZRX)
bZx describes itself as an open finance protocol, built on the Etheruem blockchain. It is a DeFi lending platform that allows users to earn interest after depositing cryptocurrency into their smart contracts. At the same time, traders can come and use this liquidity to facilitate margin trading on the platform.
They also have a borrowing arm to their company at torque.loans which allows users to take out cryptocurrency loans from the platform.
The BZRX token itself can be used to pay fees on the platform and is also used for governance voting proposals on the future direction of the platform.
- BZRX is found on the second page of CoinMarketCap, a place where many choose not to venture.
- It is ranked in the 125th position as the coin starts to take off with it being released not too long ago.
- The team is quite humorous, roasting its competitors on its Twitter feed using valid points;
- bZx makes it possible to trade with 100x leverage on Ethereum (insane!) markets through Fulcrum - its own platform.
- Tom Bean, a graduate in Computer Engineering from the Georgia Institute of Technology, founded the protocol.
- Bean has prior experience as a Manager and Principle Engineer at Nokia before founding bZx in August 2017.
- Decentralized Exchanges play an extremely pivotal role in the entire DeFi ecosystem, and bZx offers a professional trading experience complete with margin capabilities.
- bZx offers an insurance fund where the protocol collects 10% of all the interest earned by lenders.
- Data from Santiment shows that whales have slowed down their accumulation of BZRX;
- Additionally, the total number of daily active addresses for BZRX remains relatively low - providing an excellent opportunity to get in before everybody else does;
- Lastly, the developmental activity for BZRX has started to increase its pace over these past 2-months which indicates that the team are still working to make constant improvements;
3. UMA - (UMA)
UMA describes itself as a platform for financial innovation. The platform allows users to create Synthetic Assets in which financial contracts can be created with automatic enforcement protocols. Both parties are required to deposit a margin of 10% into the created smart contract which acts as a financial incentive to prevent them from misbehaving.
The UMA platform has its own oracle service that tracks off-chain data and brings it on-chain to be used as a reference in the smart contract.
After the time limit of the financial contract has expired, the funds are settled instantly according to the terms agreed in the contract.
- UMA is sitting quite deep in the market cap rankings like every other coin on this list. However, UMA is currently ranked in the 203rd position right now - that’s page 3! A place where not too many crypto joe’s venture through.
- Investors include the likes of BainCapital Ventures, Blockchain Capital, Dragonfly Capital Partners, and Coinbase Ventures.
- In addition to these investors, it seems like quite a large proportion of AMPL and LINK holders hold quite sizable bags in UMA. You can see this topic well researched here and here.
- Easily create synthetic tokens to track any type of underlying asset.
- UMA contracts can be used to create leveraged futures positions and generate interest-paying synthetic tokens for yield curves on Ethereum.
- Santiment data shows that the number of Daily Active Addresses is on the rise for UMA as interest begins to appear in the project;
- In addition to this, whales and retail traders are accumulating this coin as much as they can;
4. Balancer (BAL)
Balancer considers itself a protocol for programmable liquidity or in other words it's an Automated Market Maker (AMM). It allows users to create baskets of currencies that are based on weighted percentages. The protocol will make trades between the cryptocurrencies within the bucket to maintain the assigned weighted rates.
Users that put cryptocurrency inside any basked of currencies on Balancer (also known as pools) are known as liquidity providers. Their provision allows other users to quickly come and conduct decentralized swaps between cryptocurrencies on the platform.
When swaps occur, the liquidity providers are earning fees from that swap and also $BAL token are being airdropped as a form of incentive. When portfolios rebalance, liquidity providers are paid in $BAL tokens - generating a passive income for cryptocurrency holders.
- $BAL only started to trade at the start of July 2020. The coin has witnessed one significant swing higher during August, which allowed $BAL to reach as high as $20.
- Unlike other projects on this list, Balancer appears on the first page of CoinMarketCap but is ranked in the 80th position. This shows that it still has space to push higher through these rankings.
- In its short lifespan, the protocol has already managed to reach $228 million in Total Value Locked (TVL) inside the Balancer smart contract. [SOURCE]
- Balancer can be considered a better alternative to Uniswap as it offers the option to be less exposed to specific cryptocurrencies. On Uniswap, users can deposit liquidity into pools with just two tokens, split at a 50/50 rate. On the other hand, Balancer allows up to 8 different tokens in any pool with any weighting preference. This allows users to keep big exposure to their favorite tokens while still being able to provide liquidity.
- Fernando Martinelli co-wrote the whitepaper with Nikolai Mushegian.
- Nikolai is the same person who wrote the MakerDAO purple paper and pretty much co-created MakerDAO. He also served as a software engineer at Apple and Google. He was also a core developer for BitShares. [LinkedIN] - in short, Nikolai is a beast
- 3rd party audit conducted by Trailofbits, ConsenSysAudits, and Open Zeppelin [SOURCE] - the top players in smart contract space
- DeFi giants continue to create ‘partnerships’ with Balancer as they try to take advantage of their liquidity incentive programs. For example, $MTA, Ren Protocol, Curve Finance, Gnosis Safe, and SNX have all made relationships to get their coins on Balancer.
- Data from Santiment shows that developmental activity for Balancer has continued to increase over this past month;
- Furthermore, it does seem that large $BAL holders might have finished filling up their bags;
- Lastly, it seems that the volume for $BAL has been increasing quite significantly in August - this was accompanied with a price rise up to $22 levels, however, given the scale of Balancer operations it might be a stop before the $50 range which will place Balancer in a highly deserved top50 CMC.
5. THORChain (RUNE)
Thorchain is described as a decentralized liquidity market that facilitates cross-chain liquidity pools. It allows for cross-chain swaps on their network and provides an incentive to users to borrow and lend from the platform. The cross-chain exchanges occur through a bridge designed by Thorchain, known as the Bifröst protocol.
The unique aspect of Thorchain among other DeFi players is that it is blockchain agnostic, which means that its functionalities are not limited to just Ethereum.
- $Rune is ranked in 100 ranked coins as it sits in the 85th position.
- The coin has been actively traded for over a year now, and it has only recently started to take off during July 2020.
- Audit by Certik, Kudelski, and Gauntlet.
- Thorchain offers non-custodial swaps between chains.
- Users can also stake their coins in existing pools or add new ones. Liquidity providers earn fees from swaps and block rewards.
- Nodes are churned every 3-days and there is a competition between nodes with bonded capital incentives.
- They are still in public alpha, which means that once they are ready to go live, the project is likely to explode further in popularity - assuming they can deliver on their promise.
- If you watch their Twitter feed closely, you'll see a $RUNE army being formed. Reminds me of the early days of $LINK marines, and boy, don't underestimate the power of committed crypto armies and their memes...