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Top 10 Aspiring Crypto Coins for 2021

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It’s already 2021, historically the first year in this crypto cycle, almost entirely bullish in nature. I have taken a deeper look at the industry and have prepared a list of the top ten aspiring coins for 2021.

Which projects have the best chance of success? Can the parabolic rises of 2020 continue? Where is the best place to invest smartly and reduce the chance of failure while increasing your profit potential? Which crypto projects will rise to the top in 2021? Let’s dive in!

The Methodology Behind the Top 10 Ranking

When selecting projects for the top ten aspiring cryptocurrencies for 2021, I used three criteria. While any such rankings are arbitrary, I am giving the reader an opportunity to evaluate the list for themselves by disclosing my methodology.

The three criteria are as follows:

  • Position in the CoinMarketCap ranking

My set includes established projects from the list of the top 30 cryptocurrencies, according to CoinMarketCap, with a good reputation and a transparent trading history.

The purpose of the analysis was not to search thousands of cryptocurrencies to identify risky gems that could moon 100x, 1000x, or even 10,000x next year.

They could also drop to zero. I prefer to identify some of the most reliable projects with the best risk-reward ratio.

  • Annual ROI chart

The chart contains historical data on selected cryptocurrencies and compares the return on investment (ROI) that investors could have gained during 2020.

One commentator who refers to this chart frequently is Benjamin Cowen. In the video below, he indicates cryptocurrencies with the highest ROI from March to December 2020. LINK, VET, and ADA were the top three, followed by XLM and ETH.

  • Opinions of crypto market experts

This is the most arbitrary criterion. There are influencers, commentators, and analysts of all kinds in the crypto sphere, but there’s certainly no consensus on who is unquestionably an authority.

Thus, we only refer to a few people, such as Cowen, Kevin Svenson, and Lark Davis.

Each coin’s description includes a brief outline of its specification and foundations, the latest news that suggests a strong entry in 2021, and a paragraph on long-term price action.

10. Bitcoin (BTC)

Price: $26,800
Market Cap: $500 Billion
CoinMarketCap Rank: 1

The top ten aspiring cryptocurrencies for 2021 begin with the orange king of crypto itself: Bitcoin (BTC).

Created in early 2009 by Satoshi Nakamoto, the first cryptocurrency is, in fact, a distributed, decentralized ledger where users send funds directly to each other, peer-to-peer, without an intermediary.

There is no need to convince anyone who has been around the cryptosphere for a while that investing in bitcoin is profitable. Especially recently, when on December 16, BTC broke out from $20,000, 2017’s historical all-time high (ATH).

So far, bitcoin is one of the most profitable assets in history, surpassing big names like Amazon, VISA, Microsoft, and JP Morgan in terms of ROI by several orders of magnitude

But some people ask, is it still profitable to buy bitcoin at such a high level above $20,000? Does anyone else still buy? This turns out to be an overwhelming yes! And it’s not random retail players who missed the discount prices during the March crisis (below $4,000), but serious financial institutions.

In the recent top 5 list of institutional investors, BeInCrypto showed that companies like MicroStrategy, 3iQ, or CoinShares are investing additional capital into BTC.

The Grayscale Fund is a leader in mediating between the purchases of the alpha cryptocurrency and its investors’ interests. The secret Bitcoin purchases made for some time by Guggenheim Partners and MassMutual have also recently come to light.

We are witnessing the first Bitcoin cycle in which institutions are initiating the rally. Something that Bitcoin hodlers have been expecting for years, and that could bring unprecedented gains in the crypto market.

Some investor’s decisions may result in an avalanche of followers who’ll want to FOMO in for themselves. For example, according to JP Morgan’s estimates, 1% of the capital in pension funds and insurance companies in Europe, Japan, and the USA would be enough to pump an additional $600 billion into the crypto market.

The involvement of big financial institutions and other macroeconomic factors could lead to an enormous BTC price explosion in 2021 and the fulfillment of optimistic forecasts.

9. Stellar (XLM)

Price: $0.13
Market Cap: $2.9 billion
CoinMarketCap Rank: 15

Stellar (XLM) is a blockchain network for storing and transferring money. It was established in 2014 to increase financial integration in different regions of the world and help companies exchange value.

The network’s main task is to provide a platform for low-cost payment services where the transaction fee is fixed at only 0.00001 XLM.

Stellar has succeeded in integrating with several fintech companies. A few years ago, it launched World Wire together with IBM. The platform enables transactions between bridge assets like stablecoins.

What’s more, it incorporates the idea of ​​decentralization. The Stellar network allows users to vote in the decision-making process when adding companies to the ecosystem.

XLM is gaining additional global adoption after Grayscale Investments created a dedicated trust.

As BeInCrypto recently explored, the oldest bank in Germany, Bankhaus von der Heydt, announced the creation of a euro stablecoin (EURB) on the Stellar blockchain. It’s the first token of this type issued by a banking institution.

XLM’s price action since the March crisis is impressive. The cryptocurrency is among the top five coins that have brought investors the highest ROI. From the low of $ 0.026 in March to the high of $0.23 in November, XLM generated almost 800% profit.

Currently, Stellar is undergoing a deeper yet healthy correction that recently reached the 0.5 Fib level of the entire long-term upward movement. The all-time high (ATH) from January 2018 at $0.94 is still quite far away, which gives great potential growth in 2021.

8. Tezos (XTZ)

Price: $2.09
Market Cap: $1.6 Billion
CoinMarketCap: 19

Tezos (XTZ) created its own blockchain network for smart contracts that aims to evolve. One of its tasks is to avoid Ethereum and Bitcoin errors, allowing hard forks. Adaptability, an open structure, and the influence of validators (bakers) on the network are its main advantages.

A recent upgrade to the Tezos network called Delphi planned to cut smart contract gas fee by 75% to attract DeFi developers to the ecosystem. However, Tezos’ applications extend much further and implement the latest trends in the crypto market, such as NFTs, video games, and the film industry.

Tezos recently announced a partnership with Logical Pictures, a European film producer, with a $ 121 million project. This is one of the first initiatives towards tokenization of movies and series, thus investing in the movie industry using crypto.

This will likely set a new trend for investing in Hollywood movies and provide a greater ROI, fluidity, and transparency in the film industry.

Since the launch of the Tezos mainnet in 2018, XTZ’s value has been growing. The price of the token was steadily increasing until it reached an ATH of $ 4.48 in August this year.

Later, however, there was a deep correction, reaching the 0.786 Fib of the entire upward move from March 2020. Today, XTZ needs to double its price to return to the ATH.

However, both the sensational results from the first half of this year and the structural strength of the upward trend make Tezos an excellent investment option at the beginning of 2021.

7. Binance Coin (BNB)

Price: $38.13
Market Cap: $5.5 Billion
CoinMarketCap Rank: 9

If 2021 is to be the year of cryptocurrencies, trading platforms will be in the spotlight and should see great benefits. Cryptocurrency exchanges could be one of the biggest winners of the coming crypto madness.

Even though more cryptocurrency trading is moving towards decentralized exchanges, their well-managed centralized older sisters still dominate. And the biggest one is Binance.

Launched in China in July 2017, Binance has the unrivaled largest trading volume, offering access to hundreds of crypto assets. It was founded by the charismatic Changpeng Zhao (CZ), who has held the status of a cryptocurrency celebrity for years and is one of the most recognizable characters in the industry.

CZ was included in “The Bloomberg 50,” published in December. The list contains 50 people who have shaped the world’s financial, political, technological, and scientific landscapes in 2020.

Binance has had a huge impact on the crypto market for years. According to a statement by CZ, in 2020 Binance would generate profits between $800 million and $1 billion.

In 2019, profits reached $570 million. 2020 will likely double this record-breaking figure. Moreover, the exchange is also entering the DeFi market with the recent launch of its Binance Smart Chain. It claims can quickly and cheaply handle transactions of various asset classes.

Source: Binance

Binance’s upward prospects are not without impacting its native token, the Binance Coin (BNB), likely to be an excellent investment choice. BNB went live several days after the opening of the exchange in 2017.

In June 2019, the token reached a historical ATH of $39.57. It hit a low of $6.41 during the March crisis but has since been rising in price and recorded a new ATH of $40.17 on December 29.

An additional advantage of holding BNB is lower or zero commissions for trading on Binance and the possibility of using it to buy other tokens in periodic sale campaigns.

6. Uniswap (UNI)

Price: $3.63
Market Cap: $972 million
Rank in CoinMarketCap Rank: 30

The Binance example shows how finance flows into cryptocurrency exchanges. And if we combine the growing potential of trading platforms with the biggest crypto hits of 2020, which undoubtedly became Decentralized Finance (DeFi), we get decentralized exchanges (DeX).

The leader in this niche is the Uniswap exchange with its UNI token. Although the spectacular boom in the DeFi market collapsed along with the drastic drops in early September, there are many indications that the growth in popularity of this industry will continue in 2021.

According to available data, the number of users in the DeFi space has increased over ten times in the past year: starting from less than 100,000 and ending with over 1 million.

Uniswap is the leader of decentralized exchanges in many respects. The amount of total value locked (TVL) is worth $1.47 billion. Users have already created 600,000 addresses relating to DeFi.

In September, the exchange created and released its own UNI governance token. As in the case of Binance, this move adds new profit potential to Uniswap users and the possibility of a real impact on its future.

Source: DeFi Pulse

5. Ethereum (ETH)

Price: $730
Market Cap: $83 Billion
CoinMarketCap Rank: 2

There are many indications that 2021 will be a breakthrough year for Ethereum, the second largest crypto project, and its cryptocurrency Ether (ETH).

Unlike Bitcoin, the Ethereum blockchain is a decentralized system that serves as a platform for many other cryptocurrencies and smart contract development.

Ethereum’s goal is to build a global network for decentralized applications (dApps) that would enable the writing and running of software that would be immune to fraud, delay, and censorship.

Ethereum’s prospects are great, as are the problems its developers have experienced over the years. Only this year, after many months of preparations, we finally saw the long-delayed launch of Ethereum 2.0 that initiates the transition to PoS (Proof-of-Stake) from PoW (Proof-of-Work).

On December 1, network validators began stacking ETH, and the price of the cryptocurrency broke $620.

Ethereum has a huge spectrum of potential applications. Suffice to say that virtually the entire DeFi world is built on the Ethereum blockchain. And this world is opening up to additional investors.

Many institutional entities have already gained exposure to Ethereum through the Grayscale Fund (ETHE). As BeInCrypto recently explained, this was followed by 3iQ from Canada, which is preparing to launch an ETH fund for its customers.

Moreover, the latest report shows that the CME Group, the largest exchange for financial derivative instruments globally, is preparing to launch futures contracts for ETH.

Therefore, it seems that institutional investor interest in 2021 will not be limited only to Bitcoin but also redirected to Ethereum.

This may be because Ether, unlike Bitcoin, is still far from breaking its January 2018 ATH at $1,432. ETH still needs around 100% growth to achieve this, so the profit potential seems to be much greater here.

4. Polkadot (DOT)

Price: $6.59
Market Cap: $5.9 billion
CoinMarketCap Rank: 8

Polkadot (DOT) is an open-source protocol for sharding that enables the transfer of data and tokens between different blockchains. It is characterized by interoperability, which aims to create a fully decentralized and private network to develop applications and services.

Its native DOT token serves three purposes: network governance, operations, and the creation of parachains (parallel chains) through bonding.

A recent listing on most major cryptocurrency exchanges pushed the DOT price to an ATH of $6.84 in early September. Despite the correction, the cryptocurrency price has stabilized and is growing faster, laying the foundation for positive price action in 2021.

Source: Polkadot Nework

Polkadot is on the right track to permanently join a group of the most important cryptocurrency projects. One of YouTube’s crypto-influencers, Lark Davis compares the impact that Polkadot may have on the cryptocurrency market in the current cycle to that of Ethereum in 2017.

In his opinion, this young project’s growing ecosystem is already crushing the lists of partners the competition can boast.

Recently, the project’s founder Gavin Wood, who is also one of the creators of Ethereum, stated that Polkadot should not be seen as an “Ethereum killer” but rather as a ​​blockchain maximalist killer.

The idea behind Polkadot is not to favor a selected blockchain but to build a “network for the networks” in which bridges and connectivity will be most important aspect. Speaking to Laura Shin on the Unchained Podcast, Wood added:

“If Ethereum ends up being a chain that is sort of bridgeable […], I think that there’s a very good chance that Polkadot and Ethereum will happily coexist.”

3. Cardano (ADA)

Price: $0.19
Market Cap: $6 Billion
CoinMarketCap Rank: 7

The vision outlined by the Cardano (ADA) creators is breathtaking. The team’s goal, led by the eccentric visionary Charles Hoskinson, is to provide a tool for creators, innovators, and visionaries to bring about positive, global change.

They are to rely on the redistribution of power from centralized, unaccountable structures into the hands of individuals who will create a safe, transparent, and just society. A truly impressive prospect!

Cardano has a very elegant but complex development roadmap. It breaks down the entire history of network testing, launching, and adoption into five development eras: the Byron (foundation), Shelley (decentralization), Goguen (smart contracts), Basho (scaling) and Voltaire (governance).

We are currently in the second era, but intensive work is already underway to implement the Goguen era by the end of February 2021.

Source: Cardano

The native token ADA has a three-year history, beginning with parabolic growth at the end of the 2017 bubble that finished with an ATH of $1.33.

The drastic declines that followed stabilized the ADA price below $0.10, where it had been trading for more than two years. The coin recently managed to regain support at $0.10 and move more confidently towards new annual highs.

The results of the ADA price action in 2020 gives it a solid third place, after LINK and VET, in the high-cap ranking projects, which gave investors the highest ROI.

For example, blockchain enthusiast @CardanoDan recently emphasized in a tweet that ADA could soon outperform LINK in this respect. This is an excellent prognosis for 2021.

Cardano may be the project that will bring exceptional results in the coming year, not only in terms of technology but also in investment.

2. VeChain (VET)

Price: $0.019
Market Cap: $1.2 Billion
CoinMarketCap Rank: 23

Supply chain management is a niche of blockchain technology for VeChain (VET). It aims to use decentralized management and the Internet of Things (IoT) to create an ecosystem overseeing various supply chains.

The idea behind ​​VeChain is to increase the efficiency and transparency of shipping procedures while reducing costs and giving individual users greater control.

VeChain brings true innovation to an industry that has remained fairly stable over the years. Companies that want to increase transparency, control, and efficiency are looking to introduce blockchain technology to their businesses.

For example, recently VeChain announced a partnership with KnowSeaFood – a US company specializing in seafood gastronomy, an industry worth $100 billion.

Farmers will be able to communicate directly with consumers, who can pinpoint the exact origin of the seafood they buy.

Source: VeChain

The VET price action from the low in March to the ATH in August at $0.023 is impressive. The cryptocurrency saw a 1,478% profit, followed by an approximate 63% correction. VET is already making up for most of the losses and creating solid support before further upward movement.

Benjamin Cowen points out that an investment in VET from March to December 2020 gave a record-breaking ROI that only gave way to the LINK token.

If such price dynamics are maintained, there’s a good chance that in 2021 VET will break its ATH and experience parabolic increases again.

Price: $11,9
Market Cap: $4.7 Billion
CoinMarketCap Rank: 10

2020 was a breakthrough year for Chainlink (LINK). The cryptocurrency has firmly established itself in the first place in the segment of oracle providers and has hit the top 10 cryptocurrencies.

The robust development of the ecosystem (already over 350 partnerships) and the increasing adoption in various global economy areas are just some of the fundamental reasons making Chainlink an increasingly accelerating enterprise.

The explosion of the LINK price from the resistance at $5 in early July pushed it up to an ATH in the $20 area in just a few weeks. The subsequent correction reached -65% but did not frighten any of LINK Marines, and the project is systematically gaining in value again.

There is a growing number of LINK hodlers, who increased their ranks by 59% between August and December 2020, currently sitting around 285,361.

The co-founder and a major character of the project, Sergey Nazarov, took second place in the recent “DeFi Person of the Year” award. Nazarov is a mysterious influencer in the crypto world.

Only Andre Cronje from Yearn Finance defeated him. This emphasizes that Chainlink is becoming a standard solution in data handling by the oracle.

In the list of cryptocurrencies with the highest ROI from March to December 2020, prepared by Benjamin Cowen, Chainlink came first.

This is also confirmed by Kevin Svenson, who points out that LINK’s 2020 price increased from $1.50 to $20, making it one of the most profitable projects in the top 20 cryptocurrencies.

If this trend continues, we can expect LINK to be one of the dominant cryptocurrencies in 2021.

Conclusion: Top 10 cryptocurrencies

The above list of top ten aspiring crypto coins for 2021 was my choice, based on the criteria presented in the introduction. The cryptocurrency space still has many promising projects that have shown just a sample of their huge potential in the past few months.

It’s enough to mention here, for example, a few of the largest ones, such as Litecoin, Aave, Kusama, Zilliqa, or Theta. However, they weren’t included in my top ten list because the competition is huge, and the list is concise.

Remember, however, that out of over 8,000 cryptocurrencies that are registered on CoinMarketCap, the vast majority will fail and deprive hodlers of capital invested in them.

Therefore, your investment choices in this wild west of crypto should be made carefully, individually, according to your own expectations, preferences, and risk tolerance.

Either way, 2021 will be a unique and interesting experience for the cryptocurrency market.

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed here are those of the author and do not necessarily represent or reflect the views of BeInCrypto.

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PhD and an assistant professor at an international university in Lublin, Poland. Spent 10 years studying philosophy of nature and sport science. An author of 4 books and two dozens of scientific articles. Now, he is using his mind for the benefits of the cryptocomunity. Technical analysis enthusiast, Bitcoin warrior, and a strong supporter of the idea of decentralization. Duc in altum!

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Source: https://beincrypto.com/top-10-aspiring-crypto-coins-for-2021/

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Marathon invests $150 million in Bitcoin

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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.

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.

Source: https://coinrivet.com/marathon-invests-150-million-in-bitcoin/

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PayPal allows Bitcoin and cryptocurrency transactions

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Just a few years ago, Paypal used to categorically oppose Bitcoin as a payment method. For those who used to buy Bitcoin during the prior bull run, in 2017, you might remember the large interest of Paypal users in finding ways to obtain cryptocurrency. Paypal did not only take an opposing stance but they even closed accounts associated with cryptocurrency purchases.

 

Fast forward to 2020, and we are seeing an incredible development taking place – Paypal finally supports cryptocurrency transactions. While the new feature of the payment system is only a few weeks old, many people are not yet aware of the specifics. And that’s exactly why we wrote this article.

 

Over the next few paragraphs we will break down the new offer of Paypal, and how it affects the industry as a whole. Let’s get started.

Paypal enables cryptocurrency storage

As of November 2020, users are now able to purchase Bitcoin, Ethereum, Litecoin and Bitcoin Cash directly through Paypal.

 

<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>Now you can buy, hold and sell <a href=”https://twitter.com/hashtag/Crypto?src=hash&amp;ref_src=twsrc%5Etfw”>#Crypto</a> with PayPal. Start with as little as $1 in the PayPal app today. Terms apply. <a href=”https://t.co/ydl63Q5kGB”>https://t.co/ydl63Q5kGB</a> <a href=”https://t.co/ArZP2FgrSk”>pic.twitter.com/ArZP2FgrSk</a></p>&mdash; PayPal (@PayPal) <a href=”https://twitter.com/PayPal/status/1330919854724026373?ref_src=twsrc%5Etfw”>November 23, 2020</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>

 

The offer initially rolled out for users who reside in the United States, and was later enabled to more than 380 active Paypal users around the globe.

 

Here’s how the process works:

  • Users can select to either buy or sell the cryptocurrency they want from the dashboard of Paypal.
  • After making a purchase, the coins remain in their account and cannot be transferred elsewhere. Paypal thus offers “paper crypto”, also known as a representation of cryptocurrency backed by the real asset.
  • Due to being unable to transfer the funds. Users are eventually prompted to sell their coins back to the platform.
  • While this limits the use of cryptocurrency obtained through the platform there is some great news as well. Until 2021, users do not need to pay any fees when buying or selling coins through the platform.

 

So is this a good thing for the growth of the industry?

Many claims that the somewhat “centralized” approach that Paypal adopts when it comes to cryptocurrency transactions gives the wrong message towards the public. Several authoritative cryptocurrency investors believe that new users should be able to use their coins as they please, and not be forced to hold onto them within the platform of Paypal.

 

However, there are some very good news for the industry as well. These are the developments you need to keep in mind as we are entering 2021 with a nearly fully recovered Bitcoin:

1.   Paypal now buys ±70% of all new BTC

Since their recent announcement, more than 20% of Paypal’s users have already bought some form of cryptocurrency. To support this extremely large user demand, Paypal is now forced to purchase nearly 70% of the daily minted supply, which equals roughly to 630 BTC. This move sharply increases the difficulty of obtaining new Bitcoin, which in turn increases its scarcity and price.

2.   Paypal improves accessibility to crypto

New technologies always take time to develop, especially when the majority of people are not very accustomed to decentralized technology. Paypal’s decision to support cryptocurrencies massively expedites this process, making the UX/UI issues disappear. Every Paypal user has now full access to cryptocurrency and can purchase however much they like.

3.   Cryptocurrency will soon be used when paying all Paypal-supported merchants

Starting from early 2021, Paypal users will be able to use their cryptocurrency to make payments to all 26 million merchants that support the payment system on a global scale. This brings cryptocurrency one step closer to being adopted as a fully capable and globally adopted payment system.

Wrapping up

Paypal’s move towards cryptocurrency support and mainstream adoption makes perfect sense when looking at the recent economic and geopolitical developments. With Bitcoin making a full recovery over the past two years, there is now concrete proof that cryptocurrency is here to stay. Those who welcome new technologies will be the ones that benefit most from it, and Paypal seems to have a low time-preference when it comes to their enhanced business model.

For now, we will need to patiently wait until more payment systems and institutions decide to join the BTC revolution. Who knows what the future may hold? We may soon see Bitcoin climbing to new highs, satisfying even the most demanding Paypal users.

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Santa is a Latvia-based cryptocurrency journalist with a passion for covering the latest happenings in the cryptocurrency and tech world. In addition to being the analytics specialist of Paybis, Santa is also into consulting, reading,

 

 

 

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Reef Finance Review: The Gateway To DeFi

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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 Logo

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 Ecosystem

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 Complexity

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.

DeFi Stack

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.

Reef Founder

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 Mainstream

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.

Why Polkadot?

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 Polkadot

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 Liquidity

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 Trading Terminal

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.

Intelligence Engine

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.

REEF Token

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.

Reef Token

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.

REEF Chart

REEF tokens really haven’t been trading for long. Image via Coinmarketcap.com

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:

  • Basket engine.
  • Protocol fees.
  • 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.

Reef Governance

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.

Yield Distribution

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.

Reef App

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.

Reef Binance Access

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

Reef Roadmap

The first quarter of 2021 is crucial to the development of Reef Finance. Image via Reef.finance

Or you can find a live version of the roadmap on Notion.so here.

Conclusion

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.

Source: https://www.coinbureau.com/review/reef-finance/

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Blockchain

5 DeFi-Related Projects to Watch During Alt Season

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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.

Its native token, SUSHI, currently sits at $6.72 after climbing almost three-fold in just under a month and has a TVL of over $1.87 billion.

5. Alpha Finance Lab (ALPHA)

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.

Disclaimer

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.

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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.

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Source: https://beincrypto.com/5-defi-related-projects-to-watch-during-alt-season/

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