Reasons for the Rise of DeFi Projects (Which Coins in DeFi Projects Can Appreciate)

08/10/2023 13:50 • Tech Ticker • 89 views

Reasons for the Rise of DeFi Projects Editor’s note: This article is from 8btc News (ID: bitcoin8btc), written by Kyle and authorized for publication by Planet Daily.

The most popular projects in the DeFi field are Compound and Synthetix, both of which are currently the best-performing DeFi tokens. However, they have very small trading volumes, which makes it difficult for them to attract a large number of investors because they do not have enough funds to do so. Many other DeFi projects, such as Uniswap, Aave, and Yearn.finance, are also facing the same challenge:

1. Compound

Compound is the first decentralized exchange protocol built on Ethereum, allowing users to create, manage, and exchange cryptocurrencies by collateralizing assets.

2. MakerDAO

In the past few months, more and more users have become interested in lending platforms and have been using the platform’s loan protocols for transactions. Due to its liquidity provision method being different from traditional financial services, people have also started considering using this method for other purposes, but the situation is changing now. From this perspective, the DeFi ecosystem is developing rapidly and many new participants have entered the industry, especially in recent months, attracting attention to some emerging projects.

3. SynthProtocol

The Synth protocol, launched by a decentralized open-source software development team, is a smart contract-based open protocol that creates a permissionless base layer for applications on all blockchains, allowing anyone to access it. It is a permissionless and scalable solution designed to help developers easily build new products and services. It leverages a new mechanism called “elasticity” to improve performance and availability for faster payment processing, cost reduction, and efficiency.

4. SushiSwap

According to CoinGecko’s data, as of the end of May, the total value locked (TVL) in SushiSwap exceeded $2 billion, accounting for over 10% of the overall DeFi market TVL, second only to Compound (COMP). In addition, SushiSwap’s governance token SUSHI price rebounded close to its all-time high after a sharp decline in late June, then rose again and broke through the previous low, eventually reaching a new high in early July.

5. Balancer

1. BAL

Balancer is a decentralized exchange protocol. Its code is written off-chain rather than generated on-chain. It also uses Chainlink’s oracle network to perform oracle computation tasks.

Which Coins Can Appreciate in DeFi Projects

According to defiPulse data, there are currently nearly one million locked funds in DeFi projects, and some coins have appreciated by more than 50%. In comparison, there are only about 1,000 circulating Bitcoins on the market, and other cryptocurrencies have less than 500 in circulation. In the past year, many projects have performed well, such as MakerDAO (MKR) and Compound (COMP).

However, to some extent, the low liquidity of these DeFi projects is also one of the reasons for their price volatility: if these projects do not have enough funds for long-term accumulation, they will experience high slippage. Therefore, the value of some DeFi projects is also difficult to estimate, and it is necessary to pay attention to which coins can become assets in these DeFi projects to help investors make reasonable investment choices.

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Reasons for the Rise of DeFi Projects (Which Coins in DeFi Projects Can Appreciate)

Which Coins Can Appreciate in DeFi Projects

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