“We are moving from a centralized understanding of the world to a decentralized understanding of the world – Mike Cernovich”
There is no denying that DeFi or decentralized finance has gained traction in the past few years. If you have been dealing with blockchain, DeFi is not a new term for you. This industry is on a rampage with over $4 billion in assets entirely locked in DeFi. As of now, the DeFi industry is growing by approximately half a percent each week.
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While the cryptocurrencies are already making global payments easier, the DeFi industry is aimed at going a step further by blending crypto and finance together to create a world with decentralized alternatives to all kinds of financial services such as savings accounts, investment accounts, insurance and so on, accessible to everyone with a smart device from anywhere in the world. DeFi can impact the global financial services market in many ways in the next few years.
Smart contracts like Ethereum are powered to achieve the objective of DeFi. These smart contracts run programs on blockchain, designed to be automatically executed when certain conditions are met. These smart contracts further help developers to come up with more functionalities and sophisticated actions beyond just the sending and receiving of cryptocurrencies.
The major DeFi innovators of this year:
- Chainlink (LINK)
Chainlink, popularly known as LINK is a decentralized financial system designed to secure inputs and outputs necessary to run the smart contracts we talked about above. By way of Chainlink, these smart contracts are connected to the real world, events, and payments. The system can even power oracles on the Ethereum platform. The researchers have marked a steady growth of the DeFi platform since a year.
- Dai (DAI)
DAI is a stable coin, backed by the US Dollar. The profits out of this crypto coin may be slim, but it has a great role to play in boosting decentralized finance. DAI stands out amongst the various stable coins backed by USD because it offers more flexibility and scalability. Anyone who has the required collateral, can create their own DAI with stable coins.
- Maker (MKK)
Maker is considered to be the second largest DeFi project, following the trail of LINK. An Ethereum based cryptocurrency project, Maker is responsible for DAI. It is a token that is quoted at a high price.
- Aave (LEND)
With Aave, DeFi has marked its presence in the lending industry as well. Aave is an open source, non-custodial protocol through which the users earn interest on the loans and deposits. They of course need to have the native token LEND. As per the official website, the market cap or LEND is $1,544,822,541.46.
- Synthetix Network Token (SNX)
The synthetic assets are used to stimulate the risks and benefits of any specific financial instrument with the help of modelling of one or more financial instruments. The Synthetix protocol is doing the same. The primary token used in SNX, which is used as a collateral to back the synthetix assets. The stackers can make money on each of the synth trade made.
- Compound (COMP)
Decentralized Finance has boosted the crypto lending and borrowing. COMP is a currency distributed to the users in proportion with the demand of USDC, DAI, and ETH. When COMP was launched in June 2020, it was valued at $65 and within two months, its value exploded to $172.20. As it has great usability and power, the investors are anticipating a great value of such currency in the future.
- Augur (REP)
Augur is a DeFi innovation to boost the betting and prediction markets. It is one such decentralized platform with no cap to the investment. whatever be the winnings, they are saved by the winner. This platform too is powered by Ethereum, and the native token is called Reputation (REP). This token is used to calm the market chaos and arguments phases of Augur. This is a very popular platform because there can be N number of predictions to bet on.
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DeFi tokens have gained traction and many people are taking interest it. Let’s see what’s in store for 2021.
