Over the last two years, the DeFi projects has exploded. TVL for Defi was above $210 billion at the time of writing. Every month, new Defi ventures debut with new promises. Some companies provide services to ordinary investors such as lending, exchanging, and staking.
While the majority of Defi initiatives begin with only one benefit or use in mind, others have several real-world applications. Investors must be aware of the Defi initiatives with the greatest number of use cases. This article will look at four Defi ventures that have the highest potential for investors. Continue reading.
Chainlink is the most widely used Defi project. The Defi technology, which is built on Ethereum, allows real-world off-chain data to be transferred to Blockchain contracts. Chainlink, to put it another way, is an Oracle network built on the Ethereum blockchain.
This tool serves dozens of tasks to many different Defi platforms as an Oracle network. Among them include:
- Dex and Defi: The Defi space depends vastly on oracles to get correct real-world data. Lending and borrowing platforms, for instance, need to get accurate data feeds from Chainlink.
- Stablecoins: Stablecoins need to accurately track the value of their underlying assets to keep their peg. By using Chainlink, stablecoins maintain the integrity of their reserve ratios.
- On-chain reserve monitoring: This is specifically to deal with wrapped cryptos like Wrapped Bitcoin WBTC. Chainlink monitors the assets on both blockchains to ensure the WBTC tokens are fully collateralized.
- Yield farming and staking: Defi projects use Chainlink to get tamperproof price feeds, which helps track the price and value of deposits. If Oracles are not tamperproof, hackers may manipulate them to gain rewards from farming pools.
- Supply chain: Supply chains are already starting to experiment with smart contracts, they need vital external data sources like IoT sensors, APIs, and data feeds. The Chainlink oracle network can connect the smart contract to external data sources.
Other applications for Chainlink oracles include income sharing, portfolio management, Node as a Service, account security, and many others. Chainlink is the best Defi project in terms of actual applicability.
The Synthetix protocol is another Defi network with a wide range of applications. The network was created to assist in the creation and hosting of synthetic commodities and assets known as Synths. Instruments that replicate other assets are known as synths.
The Synthetix protocol has a number of applications that can readily benefit investors. Among the use cases are:
- Powering projects: The Synthetix protocol offers the ability to power decentralized perpetual futures, options markets, deal coordination markets, and many others. By powering the many projects, Synthetic help achieve a financial space with lots of Synthetic assets.
- Scaling assets: This is a situation where real-world assets can all be traded on a chain in a trustless manner. You can trade fiat and many other real-world assets as Synths.
- Lending: Aside from just offering on-chain Synths, This synthetic network is also home to lending services. Anyone can access synth loans using other classes of assets as collateral.
- Staking: This network also offers token staking services to help investors earn incomes.
Another Defi protocol with large yields and benefits for Defi project users is convex finance. Convex Finance is a global, programmable, decentralized network that provides financial services. So, what are the applications of the Convex network? Here are a few examples of applications:
- NFTs: The convex network can support powerful NFTs with millions of NFT transfers per second. Moreover, convex allows individual metadata to be attached to the NFT assets. Hence, the support for powerful NFTs in one use case.
- Defi support: The Convex Finance network also has vast support for Defi applications. It supports fungible Defi tokens, DEXes, the ability to delegate asset control to others, and trusted smart contract upgrades, among others.
- Gaming: Convex is also a perfect platform for hosting gaming Dapps. Its ability to support NFTs and other fungible tokens makes it possible to host decentralized gaming. Its blazing speed performance is also a requirement to host promising gaming Dapps.
- Metaverse: This network also supports the development of virtual reality.
- Payment and retail CBDCs: Convex-based digital fungible assets can help in the payment of retail purchases.
Thorchain, a Cosmos-based platform, is another DeFi project with a variety of applications. This network, by definition, provides cross-chain swapping services for crypto assets such as BTC and ETH.
This Defi network, on the other hand, has a wide range of applications for investors. Among them are the following:
- Swapping crypto: This platform’s main job is to offer investors the ability to swap crypto assets across blockchains.
- Lending: Thorchain also allows users to get loans using collateral and fixed interest rates.
- Synthetic assets: Thorchain offers the ability to host synthetic assets. These synthetic assets are unique since 50% of their backing is from the asset, while 50% is RUNE.
- Stablecoins can be used for payment: The Thorchain network supports its own Thor.USD stablecoin. Digital currencies will often gain use cases in different ways, including payment, international transfers, and others.
Author’s Opinion DeFi Project
This guide has looked at Defi projects with a variety of use cases. Chainlink, Synthetix, Convex Finance, and Thorchain are Defi initiatives that provide investors with a variety of useful applications.
The majority of other prominent Defi projects, such as Uniswap and others, only provide one or two services, such as Dexes and staking. However, systems that support different use cases give investors more opportunity to profit.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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