As it couldn’t be any other way, within the cryptocurrency industry there is a growing number of people and community members interested in finances and how to increase their wealth outside the traditional centralized system governed by banks and financial institutions.
In this article, we dive into eight cryptocurrencies that have the potential to disrupt the traditional financial industry and build the DeFi landscape.
Everlodge (ELDG), democratizing vacation rental properties
Who hasn’t seen those social media videos of influencers staying over dreamy destinations in luxurious properties? You may not be able to afford to stay there now, but you could invest in those properties. That is the proposal of Everlodge, a new DeFi project that aims to disrupt the profitable vacation rental market by making it more accessible to everybody, no matter how wealthy that person is.
By minting NFTs for the value of those properties and fractionalizing them in equally valued fractions of $100, anyone with some spare funds can invest in these properties and earn interest from it, putting their money to work instead of sitting in the bank account. Currently, in stage seven of the presale, ELDG tokens can be acquired at only $0.025.
Lido (DAO), investing without selling your digital assets
Lido is a Decentralized Autonomous Organization (DAO) and Liquid Staking protocol that is used by node operator partners to validate the infrastructure on the Ethereum, Solana, and Polygon blockchain.
Lido is a solution that enables users to earn a yield on staked assets without investing their capital for long periods. Furthermore, Lido is the largest DeFi protocol by total value locked (TVL) with more than $8 billion in assets in the platform.
Essentially, Lido enables users to leverage their staked coins without selling them by wrapping the asset and providing a derivative that is used as collateral by the underlying asset. As a result, investors can access the funds when they need it and earn yield while they wait.
Aave, borrowing with over-collateralized loans
Aave is a decentralized finance protocol that works similarly to traditional finance markets in terms of borrowing and lending. By using Aave, users can borrow crypto assets through over-collateralized loans, meaning that users will need to deposit more crypto worth than the amount they need to borrow. In this way, lenders are protected against the loss of all the money due to loan default and allow Aave to liquidate the collateral if it drops too much in value.
Additionally, Aave has launched Flash Loans, a tool that allows users to obtain quick loans without using a collateralized asset. Flash Loans are a feature that allows one to borrow any available amount of asset without using collateral, as long as the liquidity is returned to the blockchain protocol within one block transaction.
UniSwap, a peer-to-peer cryptocurrency exchange
UniSwap is one of the top decentralized cryptocurrency exchanges in terms of transaction volume and a pioneer in decentralized finance. UniSwap allows peer-to-peer market making, meaning that the platform enables users to trade cryptocurrencies without a third party as an intermediary.
The UniSwap blockchain is hosted on the Ethereum platform and governed by UNI holders. Besides, the Uniswap blockchain uses an open-source protocol, meaning that anyone can view and contribute to the blockchain’s code.
Therefore, Uniswap is a completely different type of exchange because it is not owned and operated by a single entity – like Binance – and uses a new type of trading model called Aumated Liquidity Procotol. So, the difference is that centralized exchanges charge higher fees for trading and are more profit-driven. Furthermore, because it does not belong to one entity, users keep control of their funds at all times and they do not need to give up their private keys. By retaining control of their keys, investors are prevented from losing their assets if the exchange is hacked.
According to the latest data, Uniswap is the fourth-largest DeFi platform and has over $3 billion worth of crypto assets locked away on its protocol.
Avalanche, Ethereum’s main competitor
Avalanche (AVAX) is a blockchain platform and cryptocurrency that aims to compete with Ethereum. The main difference between Ethereum and Avalanche is that the last one was built and developed to provide instant transactions. Avalanche is used to pay transaction processing fees and secure the Avalanche network.
As Ethereum, Avalanche uses smart contracts to support a variety of blockchain projects and enables the development of decentralized applications (dApps). The network is capable of processing up to 4,500 transactions per second and this allows it to scale more effectively than Ethereum. Furthermore, Avalanche is creating a bridge to the Ethereum network, which will enable users to transfer assets between the two chains without delays.
Launched in 2020, it aims to be fast, versatile, secure, affordable, and accessible. Like UniSwap, Avalanche is an open-source project, so everyone can view and contribute to the platform’s development.
MakerDAO, using its stablecoin to lend money
MakerDao or the Maker Protocol is an open-source, Ethereum-based platform whose crypto coin is the Dai stablecoin, which, aside from ETH, is the most used crypto asset in the DeFi ecosystem. The project offers crypto lending and borrowing by using its collateralized stablecoin, Dai.
MakerDAO is different from the other projects we have seen until now. What MakerDAO has done is adapt the traditional central banking model to the blockchain and open the governance of its blockchain only to a network of token holders.
It allows users to lend themselves digital money in the form of its stablecoin DAI. By locking up some ETH in MakerDAO’s smart contracts, investors can create a certain number of DAI. When users are ready to unlock their ETH – which serves as collateral for the DAI loan – they pay back the loan and the fees.
Pancake Swap, based on BNB Chain
PancakeSwap is a decentralized exchange native to Binance Smart Chain or BNB Chain. It is similar to other platforms like UniSwap, in which users can swap their crypto coins for other coins without intermediaries, with the difference that PancakeSwap focuses on the BEP20 token, a specific token developed by the exchange platform Binance.
The BEP20 standard is a checklist of functions new tokens must be able to perform to be compatible with the Binance ecosystem of dApps and other services.
Stargate Finance, a cross-chain bridge for the crypto space
Stargate Finance ($STG) is the largest cross-chain bridge in the crypto space. It allows users to transfer assets between several Layer 1 and Layer 2 networks, such as Ethereum, BNB Chain, Fantom, Arbitrum, and Optimism. The platform is expected to grow in usage as more L1 and L2 chains demand for interoperability increases.
The token itself has a lot of use cases within the protocol, granting voting rights, revenue rights, and more to holders. The token also gives users access to yield farming, staking pools, and liquidity mining opportunities. Overall, STG is a great investment for those looking at long-term value growth on a small market cap DeFi token.
GMX, a multi-chain derivates platform
GMX is a multi-chain derivatives platform on Avalanche, Arbitrum, and BNB Chain that enables users to trade futures, perpetual contracts, and options with up to 25x leverage. The platform has over $400 million in TVL and offers over 20 trading pairs for cryptocurrencies such as Bitcoin, Ethereum, Solana, Cosmos (ATOM), Uniswap, and Chainlink (LINK).
The GMX platform is one of the most popular investments in 2023 because its protocol is the 3rd highest fee-earning cryptocurrency or blockchain available in the space (including Layer 1’s like Bitcoin). The high fees come from the high trading volume on the platform, which results in staking rewards for GMX stakers above 30% APY paid out daily.