As the XRP price continues to crash and burn, tanking by 40% on leading exchanges following the US SEC’s lawsuit against Ripple, Ethereum Founder Vitalik Buterin appears to be enjoying the show. But with the recent ETH 2.0 upgrade to Proof-of-Stake (POS) of the Ethereum network, it may not be long before the US regulators reclassify ETH as a security.
The United States Securities and Exchange Commission (SEC) has filed suit against Ripple for the sale of its XRP token which it has deemed are unregistered securities. As a result, the XRP token is being culled from exchange lists and opponents of the questionably decentralized XRPL are out in force.
The majority of the XRP cryptocurrency is controlled by Ripple Labs and the 100 billion tokens were created in one go, they are not mined gradually like Bitcoin. Ripple owns the vast majority of XRP tokens and both Garlinghouse and founder Larsen own a large holding of the crypto themselves—leading many to see XRP as more of a share in the company than a cryptocurrency.
XRP has long come under criticism from the SEC and a large number of the crypto community for its lack of decentralization. The SEC has in the past ruled that both Bitcoin and Ethereum are not securities as these cryptocurrencies are not centrally controlled by any person or company. The regulator instead views Ethereum and Bitcoin as commodities.
In a rebuttal to the charges laid by the SEC, Ripple claims that in fact, XRP is far more decentralized than Bitcoin and Ethereum. Ripple is also accusing the SEC of bias towards BTC and ETH, which it also argues are “Chinese-controlled” due to the majority of the mining taking place in China.
Per the statement:
“By alleging that Ripple’s distributions of XRP are investment contracts while maintaining that bitcoin and ether are not securities, the Commission is picking virtual currency winners and losers, destroying U.S.-based, consumer-friendly innovation in the process.”
In regard to Ethereum and Bitcoin’s Chinese control, the statement reads:
“XRP is a widely adopted digital asset based on open-source blockchain technology, with an extremely robust, fully-functioning currency market. XRP consistently ranks among the top three virtual currencies by market capitalization—alongside bitcoin and ether, the two Chinese-controlled virtual currencies that the SEC has stated are not securities.”
Ethereum Founder Vitalik Buterin took issue with this comment and tweeted a response:
“Looks like the Ripple/XRP team is sinking to new levels of strangeness. They’re claiming that their shitcoin should not be called a security for *public policy reasons*, namely because Bitcoin and Ethereum are “Chinese-controlled.”
Why Vitalik May Eat Shitcoin Comment
The SEC does currently regard Ethereum as a commodity and not a security, however, due to the network’s transition from Proof-of-Work consensus to POS, ETH 2.0 may once again raise the eyebrows of the SEC.
Ethereum’s previous Proof of Work (PoW) block validation method has been helpful in eliminating SEC scrutiny thus far, the basis for the evaluation of a security, called the Howey Test, has maintained that decentralized mining (e.g. Bitcoin and Ethereum 1.0) prevents them from being considered a security.
Proof of Stake changes the game significantly. POS authentication in a network in turn creates a profit-based system that effectively links owners with returns. From almost any angle, POS systems certainly meet the SEC’s normal classifications of security.
Just as stock owners receive dividends from profits, the PoS system links the returns from the platform with the line of most staked validators. In this way, it functions far more like simple security than a decentralized work-for-return model.
In fact, this point was raised specifically in an interview last year with Commodity and Futures Commission (CFTC), chairman Heath Tarbert in November 2019. The CFTC chairman cast doubt on Ethereum 2.0’s future legal status as a commodity in regard to U.S. SEC classifications and financial regulation. The warning was directly related to the block validation planned for the ETH 2.0 upgrade, which went live earlier this month.
Tarbert explained at the event that the previously held view that Ethereum is a commodity is now in serious jeopardy due to the POS upgrade. While the CFTC has no jurisdiction over Ethereum’s status, the Securities and Exchange Commission (SEC) has been carefully analyzing the platform’s newest iteration.
It should be noted that the SEC has been targeting Ripple Labs for the XRP token since 2012. Just because the regulator has not taken action a few weeks after the launch of ETH 2.0, does not mean they are not planning further action.
As it stands and until the SEC clarifies their position on proof-of-stake systems such as Ethereum 2.0, the new Ethereum should be approached by those looking to invest as though it is an extraordinary liability at the mercy of the SEC (and other regulators) who are becoming ever-more aggressive in pursuing non-compliance in this space.
How Decentralized is Ethereum?
Decentralized or not, Ethereum is by and large governed by the Ethereum Foundation. While the foundation claims that anyone can contribute to the Ethereum codebase—and technically this is possible—the reality is that Ethereum is run by a small group of developers who get to propose and implement the most significant changes within the Ethereum network. Only 0.5% of the system stakes, which means a small elite group really controls the system. On top of that, virtually every non-code innovation in the Ethereum ecosystem can be traced back to the Ethereum Foundation and its developers.
While Ethereum may pass for decentralized on the surface, its founders, including Vitalik Buterin, have a more than enough stake to ensure control no matter how many users vote by staking. Ethereum has so far escaped the scrutiny of the SEC that XRP is now receiving, and the case may not be as clear cut as the one laid against Ripple Labs. Nevertheless, Ethereum has exhibited many of the characteristics of an ICO without registration or offering any investment protections.
Vitalik Buterin may be laughing at Ripple and XRP now, but ETH 2.0 may soon find themselves back in front of the regulators and fighting a similar battle.
Bitcoin mining firm Marathon has purchased 4,812.66 BTC for a total of $150 million, according to a press release shared with Coin Rivet.
The Nasdaq-listed company executed the trade in collaboration with financial services provider NYDIG.
“By purchasing $150 million worth of Bitcoin, we have accelerated the process of building Marathon into what we believe to be the de facto investment choice for individuals and institutions who are seeking exposure to this new asset class.
“We also believe that holding part of our Treasury reserves in Bitcoin will be a better long-term strategy than holding US Dollars, similar to other forward-thinking companies like MicroStrategy,” said Merrick Okamoto, Marathon’s chairman & CEO.
Okamoto goes on to state that Marathon is contracted to purchase 103,060 miners that will be fully operational by the end of the first quarter of 2022.
Marathon Patent Group, Inc. (NASDAQ:MARA) (“Marathon”) today announced that it has purchased 4,812.66 BTC in an aggregate purchase price of $150 million via @NYDIG_BTC. Another public company adopts #Bitcoin as a treasury reserve asset. https://t.co/acwghygNxC
Robby Gutmann, co-founder and CEO of NYDIG, added: “We deeply admire Marathon’s commitment to the Bitcoin ecosystem, and we are very pleased to add them to the list of companies who utilise NYDIG as the institutional choice for Corporate Treasury Solutions.
“NYDIG is uniquely positioned to help corporations navigate the challenges they face around executing and structuring the holding of large Bitcoin positions, and our ability to deliver Marathon a tailored and custom solution, with a quick turnaround, and no market impact, is why corporations and insurance companies choose NYDIG.”
Marathon is the latest in a long list of companies to put respective balance sheets into Bitcoin, with MicroStrategy holding more than $1 billion while Square purchased $50 million late last year.
For more news, guides and cryptocurrency analysis, click here.
Decentralized finance (DeFi) projects have been increasingly common recently as the space has become wildly popular, but each one suffers the same problem of a lack of interoperability.
This creates some frustration from users, since they have to interact with a number of different applications if they want to take advantage of all that DeFi has to offer. A simple interface allowing a user to interact with all their preferred DeFi applications in one place would be an excellent solution, and that’s exactly why Reef Finance was created.
The Reef Finance project is attempting to create a platform that combines all of the various DeFi applications in one place, easing user access to the DeFi ecosystem. With Reef Finance it becomes possible to buy, trade, stake, loan and borrow a variety of assets in one platform.
What is Reef Finance?
Reef Finance is a liquidity aggregator and multi-chain smart yield engine that allows the integration of any DeFi protocol. It has been created with Polkadot, and shares its security model across the ecosystem while enabling cross-chain integrations. Reef will allow retail investors a way to access DeFi without significant technical barriers, while also aiding in the decision making process.
Reef is the newer, simpler way to do DeFi. Image via Reef.finance
Denko Mancheski, CEO and co-founder of Reef Finance, envisioned a solution to the psychological barriers that have held back adoption of DeFi products. According to Mancheski the average person is just overwhelmed when looking at the DeFi space due to the large number of overlapping products. This makes adoption by newcomers unlikely. Mancheski has stated that at Reef their
job as a global development community is to abstract away complexities.” He further adds, “from a technical point of view, we’re moving towards being able to onboard a simple non-tech savvy user.
That would be a huge leap forward for the DeFi space.
The underlying infrastructure of Reef is a chain of smart contracts that compose and integrate the ecosystem This is the base component of the system and is known as the “basket engine.” It communicates with the analytics engine and liquidity aggregator to allow a user the ability to enter and exit positions on multiple DeFi platforms from one easy to use interface.
It also does away with the need to manage the outputs (e.g. LP tokens) of all the various platforms manually. In addition to its basic functionality the engine is also being extended to allow for multi-hop strategies, and to extend insurance cover for the basket engine. Ultimately the infrastructure will support Ethereum and a number of other blockchain networks to give users the greatest access to DeFi.
Reef simplifies the DeFi ecosystem for all users. Image via Reef blog.
The platform also includes an AI driven system that makes crypto asset management much easier for the beginner. It corresponds to various risk levels, is customizable, and can be set to help achieve the financial objectives of individual users.
The system also includes a utility token – REEF – that can be used for the governance of the system and to pay for fees within the ecosystem.
Reef Finance was created as a non-custodial platform as well, meaning users do not need to worry about giving up access to their private keys. And thanks to the underlying use of Polkadot the entire platform is hardened against attacks. Taken together there is a diminishingly small chance of any loss of funds due to theft from the platform.
Why was Reef Finance Created?
Reef came about organically as a result of the founders observations of the same problems related to complexity that have repeated over and over in various industries. They then applied those observations to the DeFi ecosystem.
The Current DeFi Landscape
Any time a new industry moves too fast it can easily become fragmented, and the same has been true for DeFi. For users that means whenever you want to do something that involves more than a single aspect you need to find a way to piece it together yourself. Some people like this type of challenge and can thrive, but most people will balk at the complexities involved in bringing together a number of disparate systems and platforms.
DeFi becomes complex very quickly. Image via Medium.com
Imagine trying to create a system of bank accounts in a number of countries and different currencies, and then using those accounts to shift money around. It’s going to be complex and it’s going to encompass not only a number of banks, but also all the infrastructure behind those banks, which isn’t necessarily connected (such as SWIFT and IBAN).
Now include the purchase of bonds and equities from those accounts and things become even more complex. That’s why bringing new retail investors into the stock market has been an arduous process until quite recently. Previously the only way for an individual to participate in global equity markets was to use the broker middlemen who were charging exorbitant fees.
With the revolution in finance however we now have apps like TransferWise for banking, and Robinhood for trading which connect everything together seamlessly, freeing the user from the troublesome experience of figuring it all out themselves.
The DeFi ecosystem is increasingly large and complicated to maneuver. Image via Medium.com
A similar thing is happening now with DeFi. Currently there is a high bar for entry into the ecosystem. New investors are confused by the need to work with so many different platforms and manage wallets across all of them. The fear of making a mistake is real, and many stay away simply because of that.
In addition to the issue of using multiple platforms to accomplish many strategies, there’s also the inherent complexity in the technology behind the systems. All of this combines to freeze many investors, keeping them from participating. It’s Reef’s plan to change this.
Validation for Creating Reef Finance
Despite the fact that there were no others envisioning a way to leverage blockchain technology and DeFi to enable interoperability between all the platforms, the team at Reef did. They began working on a solution without any validation, understanding inherently that a solution to the complexity of DeFi was needed.
Fortunately the Reef team members have a long history of working together, which has created strong relationships and synergies. Many team members are already experienced with building trading algorithms and analytic tools for crypto firms. Others have experience in creating the software that runs blockchains.
Denko Mancheski – the brains behind Reef Finance. Image via Reef blog
The project was named Reef because the founders saw it as similar to the reef ecosystem in the sea. In looking at a coral reef you can see how all the individual components of an ecosystem work together to create a whole. Reef Finance wants to bring together all the individual projects in DeFi to make it simple for the user to see how the whole works together.
Reef Aids Mainstream Adoption
One of the problems with many applications is that developers become immersed in the technology, and they miss out on how an average user views and interacts with the application.
Later the developer community continues building on existing tech, and soon you find an ecosystem of technological complexity, new concepts and terms that are only understood by the development teams, and a lack of approachability. At some point, developers need to step back and view their systems from the perspective of the users.
Instead developers have the assumption that users will adapt to their creations and learn new ways to interact with technology, however that rarely happens. This is why so many projects struggle with adoption. It doesn’t matter how the new tech is presented from a value standpoint when much of it is too complex for the average user to ingest.
Reef Wants to corner the mainstream
This creates resistance, and as time passes complexity increases until adoption becomes nearly impossible until someone can abstract the complexity to make the tech approachable again. This is where Reef comes into the DeFi ecosystem. And once the complexity is removed it is possible for innovation in the space to accelerate alongside adoption and the increased stability of the entire ecosystem.
Currently it is primarily the tech-savvy who are participating in the DeFi revolution, but Reef will make it possible for everyone to reap the benefits provided by DeFi, which is the intention and reason for DeFi in the first place. Reef is the force abstracting the DeFi landscape so everyone can participate as intended.
Most DeFi projects run on the Ethereum network, so why is Reef built on Polkadot? Reef made the choice to deploy on Polkadot as a way to benefit the user base in terms of speed and transaction costs. It avoids the problem of skyrocketing fees and excessive transaction times that have increasingly become the norm on the Ethereum network. While Ethereum 2.0 is meant to fix this problem it will be a long time until Ethereum 2.0 is fully deployed.
Reef uses Polkadot technology to avoid the problem of skyrocketing fees and excessive transaction times. Image via Reef blog.
Polkadot doesn’t have the issues common with Ethereum and it never will. The use of parachains means network congestion can’t occur. It also helps to power the interoperability needed by Reef. By deploying on Polkadot Reef can bring in services and products from various networks.
The Reef platform is made of three major components that complement each other. These three are the Global Liquidity Aggregator, Smart Yield Farming Aggregator, and Smart Asset Management.
Global Liquidity Aggregator
The Reef platform has connected to some of the largest crypto trading platforms available to offer unparalleled liquidity. The unique factor is that all the aggregated liquidity goes through DEXs and CEXs. This allows users to hedge against the downsides of the two different sources, which include high slippage and high trading fees.
Reef gets liquidity from everywhere – both CEXs and DEXs. Image via Reef.finance
Centralized exchange liquidity is accessed through broker services, while decentralized liquidity comes from online order books and AMMs. As an additional benefit, the liquidity aggregation protects Reef users from issues such as front-running and market manipulation.
Reef Trading Terminal
Reef uses the Polkadot atomic bridge in the aggregation of liquidity in its ecosystem. This includes the largest crypto exchanges in the world, such as Binance and Huobi. With the inclusion of decentralized and centralized exchanges users are able to access the greatest liquidity possible, keeping slippage and spreads low. This will make trading on Reef affordable as well as easy and diverse.
Smart Yield Farming Aggregator
Another feature of Reef is the way in which it simplifies yield farming, making this profitable, but complicated asset management activity accessible to the average user. The basket engine used by Reef allows anyone to earn yield rewards when creating a stake in various asset baskets.
It also automates other DeFi services such as mining, borrowing, and lending. The basket engine combines with the “Yield Engine” and the “Intelligence Engine” to make this happen. Users have little to worry about since the Reef AI will allow for asset management based on the needs and goals of individual users.
Reef brings together liquidity from CEXs and DEXs alike. Image via Reef blog.
The Reef Yield Engine allows users to stake in any of the available asset baskets, and the entire process can be automated with the use of the AI, which is configured based on financial goals. Once the user configures the system and allocates assets to each basket the AI will dynamically adjust and rebalance the portfolio, moving assets to more appropriate basket as needed.
Smart Asset Management
The third major component of Reef is the Smart Asset management that’s provided by the Reef Intelligence Engine. It allows users of Reef to seamlessly rebalance their holding between the various baskets. Plus the AI engine will make recommendations based on all its available information.
Reef Intelligence Engine
The Reef Intelligence Engine works to enable the AI to appropriately manage assets based on the user’s needs and goals. With the Intelligence Engine anyone is able to automate staking and trading. Creating a profitable asset allocation is simplified so it is available to all. And the Intelligence Engine uses machine learning, which powers its growth and evolution over time.
Machine learning improves the Reef platform over time. Image via Shutterstock
Because the AI is driven by data it requires off-chain data to function. That’s being provided by an oracle that serves the off-chain data to proxy smart contracts. The AI also monitors every online source of information that could be pertinent to the Reef Finance services. And Reef integrates with some Defi insurance protocols to provide coverage for its users.
The Reef Engine uses the data coming from this function to manage assets and determine investing opportunities. This way, theory can create profitable allocations through multiple asset baskets while keeping note of their risk levels.
The REEF token is the native utility token for the Reef Finance platform. It has several functions on the platform, which include powering the governance mechanism and the reward structure of the protocol. Of course it can also be used as a medium of exchange and it is available for trade on a number of exchanges.
Use cases for the REEF token. Image via Reddit.com
Here are the four primary uses of the REEF token:
Governance: vote on different proposals such as releasing new features and re-adjusting certain parameters in the system.
Protocol fees: pay fees for operations such as entering/exiting a basket, reallocation, rebalancing and other activities. This also helps in moving liquidity between pools.
Staking: stake into various pools to earn interests with preferred APR.
Yield Distribution: choose the payout ratio of the profit generated by the activities in your basket.
There is also a way to generate REEF tokens by helping to maintain the network. The group called “Network Collators” hold a full copy of the parachain and create the new blocks that help to form the Polkadot Ledger. In return for helping to maintain the reliability and accuracy of the network they are rewarded with REEF tokens.
The REEF tokens allocated to the network collators come from the gas payments made as protocol fees. There are a number of transactions that require the payment of network collator fees, which include transaction processing, deployment of smart contracts, and submitting governance proposals, among others.
In September 2020 Reef held a private sale, raising $3.9 million. Tokens were sold for $0.0009 and $0.00125 at the time. When the REEF token began trading in late December 2020 it opened at $0.02792, giving those early private investors a massive return.
Price quickly dipped from that opening high, but began recovering again within weeks and as of late January 2021 the price is remaining above $0.02 for a return of more than 1,600% for the early investors. As a DeFi token further gains are expected for as long as DeFi remains popular.
Staking Yield in the REEF Pool
Those who stake REEF tokens in the Reef pool are rewarded with more REEF tokens. The APY that’s being generated by the Reef pool comes from the three income streams in the Reef ecosystem. These income streams are:
Interest paid by power users borrowing REEF tokens to increase voting power.
In the future there are plans to introduce the Reef Treasury, which will receive these income streams too. Then the DAO can vote on the best way to use these funds, whether that be buybacks, grants, or something else entirely.
In addition to earning yield from the Reef pool, users can also generate yield through the use of the smart yield farming engine that gives exposure to a variety of DeFi activities and tokens from all the ecosystems included on the Reef Finance platform.
Voting rights in the Reef platform are granted to those who stake REEF tokens. This allows the owners to also have a say in the decision making processes of the network. There are many things that could be voted on, but here are some of the more common possibilities:
Changing asset basket structure, including fees and new proposals;
Modifying reserve limits, as well as adjusting yield rewards and interest rates;
Amending liquidity pool attributes like voting power time function and dynamic interest;
Revising the structure of the DAO.
The voting power of any individual or entity is proportional to the amount of REEF they have staked. Because of this it is possible for users to borrow REEF tokens in order to increase their voting power.
While governance is important, one of the primary features that most users will be interested in is the ability to stake REEF tokens in liquidity pools to earn yield. Users can receive their rewards in ETH/USDC or they can receive rewards in REEF tokens for higher rates. This is to incentive platform users to hold more REEF, which allows for compound staking and greater interest payments.
An early look at the Reef app. Image via Reef blog
There is an ETH/USDC pair kept in smart contracts. They are used to:
Pay interest fees for those who stake REEF tokens;
Buyback and automated market making functions;
Accumulate revenue and support the platform’s cashflow.
All of these processes are automated through the use of smart contracts, and users don’t need to be aware of what’s occurring in the background. This allows the platform to remain as user-friendly as possible, so anyone can begin to earn yield from the digital assets they hold.
Reef Finance & Binance Access
Reef Finance has many valuable partnerships, and one of the most recent and most talked about is the integration with Binance Access that will allow Reef users to purchase cryptocurrencies using fiat currency and trading in a non-custodial manner. The Reef team has also announced that the platform will soon be able to offer Binance Smart Chain support.
As one of the largest global cryptocurrency exchanges, Binance is expected to be an important partner for Reef Finance. Reef has chosen to work with Binance Access and Smart Chain for many distinct advantages, including the ease of use for fiat access, encompassing seamless user experience and low transaction fees, and access to liquidity that Binance offers.
The collaboration with Binance brings a host of benefits to Reef Finance. Image via Reddit
Early in 2020, Binance launched the Binance Smart Chain , an Ethereum Virtual machine-compatible blockchain enabling the creation of smart contracts for tokens on the Binance blockchain. BSC seeks to create an ecosystem where validators, token holders, developers, and users benefit from a blockchain platform that offers high performance and opportunities for further innovations. Of course this meshes well with the goals of Reef Finance.
As you might guess, this partnership is expected to bring many innovations for Reef users. When users want to trade the Binance brokerage integration can be used, and an Access gateway will be created to allow for the purchase of cryptocurrencies with a credit card. Since Binance Access supports many different currency options the Reef platform will be able to span the globe, allowing users to transact in their own currency. Reef Finance CEO, Denko Mancheski said:
We share the vision of Binance in ushering in mainstream adoption by making the fiat to crypto onboarding experience seamless
The Reef Roadmap
The first quarter of 2021 is crucial to the development of Reef Finance. Image via Reef.finance
Ever since DeFi burst on the scene developers have struggled to find ways to make their services responsive and understandable for users. Unfortunately their tech backgrounds often made that unworkable.
Thankfully the Reef Finance platform has been developed, allowing newcomers to enter the DeFi ecosystem without needing to fully understand what’s happening in the background. This is helping to promote increased adoption of DeFi applications and services in general.
Reef is a ground-breaking platform since it finally opens DeFi to anyone who wants it. Experience and knowledge of blockchain will no longer be a block to those just starting out in the realms of DeFi. Through the reliable automation provided by Reef users now have a simpler method for earning yield and managing digital assets.
Institutional investors are also seeing the immense benefits Reef can offer to the DeFi ecosystem and have been throwing their support behind Reef in increasing numbers. Of course their investment will grow if Reef becomes a successful platform.
More importantly, Reef can increase the numbers of newcomers entering the cryptocurrency and DeFi space dramatically if it becomes successful. That’s the ultimate goal of the project.
Featured Image via Shutterstock
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
With institutions at the reigns of the market, no one knows how far BTC will drop, or if Ether will follow through into price discovery. Either way this is the first period of the year that crypto seems to be slowing down. Below we’ll highlight some of the week’s most important stories involving Bitcoin, Ethereum, … Continued
January is nearing an end, and bitcoin is starting to see its first sustained downturn since breaching another all-time high. It briefly dropped to $29,000 but has already recovered to near $34,000.
With institutions at the reigns of the market, no one knows how far BTC will drop, or if Ether will follow through into price discovery. Either way this is the first period of the year that crypto seems to be slowing down.
Below we’ll highlight some of the week’s most important stories involving Bitcoin, Ethereum, and of course, America’s new president.
Joe Biden and Crypto: What You Need to Know
Joe Biden has been officially sworn in as the US President. The world’s most powerful man will surely have an influence over the global reserve currency, the US dollar.
Biden may be more crypto-friendly than his predecessor, with key members of his administration having a background in blockchain tech. He may also choose an ex-Ripple Labs board member to head the Office of the Comptroller of the Currency (OCC).
If Biden approves large stimulus checks and prints more money, crypto will likely benefit from the inflows.
This suggests that investors are buying for medium to long-term holdings. They are likely moving assets off exchanges and into more secure solutions like hardware wallets.
This could eventually create a liquidity crisis for cryptocurrency exchanges. Top-tier cryptos have a limited supply, and a supply shortage will probably heavily affect most exchanges.
Ethereum 2.0 Staking Attracts Over 2% of Circulating Supply
Ethereum is also being withdrawn from exchanges and into the Ethereum 2.0 deposit contract. Approved stakers are currently earning an annual percentage rate (APR) of about 9.4%.
Recently launched, the staking contract has received over 2% of the entire circulating supply, a multi-billion dollar amount. With the staking address locked for at least the next year or two, funds will be inaccessible.
This will add another dimension to the growing liquidity crisis that the market will have to take note of.
It’s been a wild ride over the last few months in crypto, and it’s probably only natural that the market recovers after experiencing such substantial growth.
When looking at the fundamentals surrounding the networks, everything still looks good for both hodlers, traders, and institutional investors alike.
All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Harrison is an analyst, reporter, and lead specialist at BeInCrypto based out of Tel Aviv, Israel. Harrison has been involved in the cryptocurrency space since late 2016 and is passionate about decentralized ledger technology and its potential.
As Bitcoin dominance falls and the alt-market picks up speed, here are five DeFi cryptos to watch out for during the impending alt-season
DeFi: 1. Polkadot (DOT)
The Polkadot network is a web-based platform designed for blockchain interoperability. Its mission is to “enable a completely decentralized web,” giving control to web users.
It also aims to allow developers to easily build web-based, decentralized apps (dApps) and connect them to businesses or other organizations.
Several projects use Polkadot’s network as a foundation, including distributed ledger consultancy ChainSafe, and recently launched DeFi project Reef Finance.
Its token sale took place in July last year. The network’s native token DOT launched at just $0.29 a coin. Since then, the price has surged to $17.22, a more than 59x increase.
This price puts DOT’s market capitalization at $16.4 billion, making it the fourth-largest cryptocurrency behind only Bitcoin, Ethereum, and Tether USD.
2. Aave (AAVE)
Aave, formerly LEND, is a “decentralized non-custodial liquidity market protocol” that allows its users to lend or borrow crypto-assets without the need for a third party.
The concept works by allowing individuals to stake several crypto-assets in return for interest paid in Aave-based assets. The staked assets become part of a pool that borrowers can tap into by using other crypto-assets as collateral.
The protocol’s native token AAVE is currently worth $188.31 and has a market capitalization of $2.32 billion. It’s currently ranked number two in DeFi in terms of Total Value Locked (TVL), with over $3.23 billion staked.
3. yearn.finance (YFI)
yearn.finance is a DeFi portal that aggregates several staking opportunities into one easy-to-use platform. This allows its users to stay on top of the cryptocurrencies that provide the best farming yields.
The platform also collaborates with some of the top DeFi applications in the cryptocurrency space, including Cream Finance and Cover Protocol. YFI, the platform’s token, led last year’s “Summer of DeFi,” rising from its launch price of $3,000 to today’s price of $31,016.96.
That may just be the start. Founder and lead developer Andre Cronje was named DeFi person of the year in 2020 by analysis portal DeFi Prime. There is still more to come with yearn.finance, including the second version of its flagship vaults service.
4. SushiSwap (SUSHI)
SushiSwap is a decentralized platform that allows crypto-holders to provide liquidity in return for interest. The platform then uses this liquidity to facilitate “swaps” between different cryptocurrencies.
SushiSwap is a type of automated market maker (AMM) and is a fork of the original AMM, Uniswap. Its lead developer goes by the pseudonym Chef Nomi.
The sushi theme continues with the platform’s latest product under development, Bentobox, which will add a lending platform to its list of products.
Alpha Finance Lab combines several DeFi products from lending to AMMs. Its objective is “to maximize returns while minimizing risks” for its users. It also seeks to make it easier for people to engage with DeFi projects by integrating a user-friendly interface in an often complex space.
Alpha Finance Lab’s latest product, Alpha Homora, will allow users to use leverage to stake tokens such as SUSHI. With Homora set to be launched in the next few days, ALPHA has gained over 300% in the past month.
The platform currently has $452.7 million in TVL, with ALPHA currently sitting at $0.81.
All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Emmanuel entered the cryptocurrency space in 2013 as a cryptocurrency broker. He is a crypto-enthusiast, entrepreneur, and investor, who has built and led several projects and communities in the space. Interests include: DeFI, CBDCs and investing.