It’s hot outside, as summer is in full swing and it’s getting even hotter inside the blockchain. According to DeFiPrime, there are currently 235 DeFi projects built, of which 219 are based on Ethereum, 17 on EOs, and 26 on Bitcoin. But what is DeFi?
DeFi which stands for Decentralized Finance is the new world order for the financial system. It takes the old method of doing things and leverages the power of the blockchain to host projects and platforms that are trustless in nature, thus making transactions anonymous and private. The fact that all transactions are conducted directly on the blockchain and then verified and authenticated automatically, removes the need for a middle man or an intermediary. This tends to make transactions more efficient, more secure and means they are not subject to tampering or human error.
There are a variety of use cases for DeFi, which include banking, cross-border transactions and payments, betting markets, trading markets, and of course the ability to invest your holdings directly on the blockchain. Staking is a new way of investing that often brings unparalleled returns, which an investor just cannot get from inside the traditional banking and savings industries. Passive yield can be anywhere from around 5%-8% APY or higher.
Let’s take a look at some of the projects that are shaking up the system and helping to propel DeFi forward.
Centrifuge connects lenders with borrowers directly. Meaning no contracts to sign and you don’t even have to meet the other person you are borrowing from. The process is as transparent as it is cost-effective. It removes the necessity for the middleman, such as the agent and it does away with the inefficiencies inherent in the traditional financial marketplace.
The project allows businesses to tokenize their assets and then use them as collateral against their on-chain borrowings, giving the lender security. This is conducted through Tinlake, an open marketplace of asset pools introducing Asset Originators and Investors. Asset Originators turn their real-world assets into tokens, with the assets backing each token. Investors can lend to the asset originators and in return can seek generous yields on their choice of tokenized real-world assets which include invoices, mortgages, or streaming royalties. Tinlake works on a smart contract basis and it automatically matches up the parties interested in administering, structuring, and financing the asset pools.
The team behind the project, which was founded in 2017, consists of finance and crypto entrepreneurs from the supply chain FinTech Taulia. Centrifuge raised $8M from its seed round in 2018 and a further $4.3M from a SAFT (Simple Agreement for Future Tokens) in 2020. Investors include IOSG, Fenbushi, Blueyard, Galaxy, Fintech Collective, Mosaic, Rockaway, Moonwhale, TRGC, HashCIB, Crane Venture Partners, Fabric Ventures, Atlantic, Inflection, Semantic, Mariano Conti, Stani Kulechov, and Julien Bouteloup.
Definitely a project to watch this summer, Reef Finance has been busy launching wallets, DeFi lending protocols, and bridges with long-term vision. Their successful Mainnet launch is expected imminently following a positive testnet launch. Reef, whose slogan “DeFi made easy” offers an entire ecosystem to investors and users in order to gain exposure to opportunities just not available in the traditional marketplace.
They focus on interoperability across a variety of blockchain ecosystems., meaning they integrate with DeFi projects from across Ethereum, Polkadot, Avalanche, Cosmos, and the Binance Smart Chain. This bridge across protocols helps boost the liquidity across the entire ecosystem. Investors who participate in Reef chain validation and governance can earn competitive APY on their Reef tokens.
Transactions on Reef are fast, scalable, with low transaction costs and they promise no wasteful mining. Reef is built using the Polkadot Substrate and comes with on-chain governance for token holders. Reef recently launched a $20 million fund for developers to help propel the usability and technology behind Reef Chain forward.
RSK is helping boost the usability of the Bitcoin blockchain, as this smart contract-based platform converts BTC to RBTC across its network through a two-way peg system. This means BTC is locked into Reef and users are furnished with the equivalent in RBTC. RSK Network uses the security of the Bitcoin blockchain, yet gives users the advantage of using a Layer 2 chain.
Bitcoin miners are able to mine RBTC using the same technology and systems they currently use for Bitcoin, and they can earn rewards along the way. RSK, which currently has around 50,000 account holders and growing, also promises scalability, as it can process approximately 100 transactions each second.
There is currently the equivalent of around 1400 BTC locked up inside this protocol, which at today's value is worth $43,957,200.00.
RSK is a way to execute BTC transactions that are faster and much cheaper than using the Bitcoin blockchain itself.
Orion Protocol gives users a new way to engage with the entire ecosystem of DEXs or digital exchanges, and CEXs or centralized exchanges using one single account. It is like the gateway to most of the leading exchanges, with the advantage of being able to compare market prices at a glance. To use Orion, investors only need a wallet address and from there they can immediately start buying, selling, and exchanging a huge selection of digital assets including leading cryptocurrencies, stablecoins, and altcoins using the exchange of their choice.
This system removes the need for clunky KYC processes and for opening accounts across the various exchanges, which is a time-consuming and often frustrating pursuit.
Trading using Orion is conducted in 3 simple steps:
1. Add your wallet
2. Deposit your assets
3. Start trading
With many users currently experiencing problems in depositing and getting withdrawals from CEXs like Binance due to regulatory issues, Orion, which links users directly to Binance, among other leading exchanges, means traders from anywhere in the world can access the platform seamlessly and of course deposit and withdraw freely.
Orion’s native token is the ORN and there are currently 12,647,511 ORN circulating or the total supply of 28,985,000 ORN which is equivalent to $52,048,205. There is a 24-hour trading volume through Orion of $19,145,535 at the time of writing.
The Bottom Line
Things move fast on the blockchain and the blockchain is so much more than just buying and selling Bitcoin. The crypto curious and crypto savvy should keep an eye on the ever-expanding DeFi market, with the number and quality of new projects heating up. Have a great summer!
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