The New Areas That the Cryptocurrency Space Needs to Focus On
The growth in Decentralized Finance (DeFi) has surpassed the predictions made by experts in the market. It is now worth $28.32 billion. It is posing a huge challenge to the traditional financial system by removing most of the shortcomings associated with it.
Along with DeFi, asset tokenization has also reached new heights. Any kind of tangible or intangible asset like financial securities, artwork, real estate, and wine, can be tokenized with ease. This is a game-changing concept as small investors can get easy access to expensive assets. Progressive regulations and the presence of more secondary markets will lift the demand for security tokens.
How Can DeFi Help the Crypto Industry?
- It can assist big businesses and corporate companies to raise a huge amount of funds for their projects in the leading cryptocurrencies.
- If the value of the asset stays stable in the market, it can overcome issues like over-collateralization and price volatility.
- Bonds will be beneficial as they offer stable returns to the investors in the form of interest paid by the borrowers.
- Flash loans can be availed in stablecoins that offer a lot of certainty and no change in value.
- Returns can be increased by the users through different methods like yield farming and staking.
- Users get decision-making powers and voting rights through governance tokens.
- The upcoming launch of Ethereum 2.0 will boost the strength of the network and also serve as the launchpad for launching several new decentralized finance projects in the industry.
- Crypto tokens offer higher returns than traditional financial instruments like fixed deposits, savings accounts, and equity shares.
The Latest Asset Tokenization Projects Making Waves in the Market
- Sygnum, a bank that handles digital tokenized assets in the form of investable wines recently. It executed the project by collaborating with a Switzerland-based wholesale wine supplier named Fine Wine Capital AG. The ownership rights provided to the token holders are safeguarded by the use of distributed ledger technology.
- CoreLedger provides the technical infrastructure for building blockchain platforms and plans to create an organized marketplace for Argentina’s farmers by partnering with Abakus. Both national and international investors can buy different farm goods like soyabeans and corn by investing in tokens. The benefits include the creation of a digital barter economy, protection from the risks of hyperinflation, and greater financial inclusion.
- LABS Group, a real estate investment platform has teamed up with Enjin, a blockchain ecosystem to tokenize property in the form of non-fungible tokens that can be bought at just $100. The tokens are highly liquid. There are no middlemen present and the settlement time for transferring funds is very quick. Investors can put money on commercial buildings, hotels, and apartments.
- Single.Earth, a venture capital firm tokenizes natural resources like forests and wetlands in the form of virtual goods and financial instruments. It rewards those individuals and enterprises who protect mother nature by maintaining biodiversity and reducing carbon emissions. The investors who buy the tokens get a stake in the ownership of the land. The value of the investments is maintained by Single.Earth through air and satellite sensors.
The Highly Promising DeFi Projects of 2021
- UniFarmer offers the UNIF (UNIFARMER) token to the investors. It uses the yield farming technique to offer greater returns. There are a total of 150,000 UNIF tokens and 500 UNIF tokens can be exchanged for 1 ETH. It offers returns of up to 250% APY. Tokens can be staked in any supported projects like Matic.Network, Reef Finance, Frontier, Oropocket, and Centaur.
- JuiceSwap offers a plethora of options for the users in the form of yield farming, decentralized exchange of assets, staking, and access to non-fungible tokens (NFT’s). It uses the mechanism of automated market-making. Users can store their holdings in the MetaMask wallet. The token offered for sale is named JUS with a supply of 300 million. Users can allocate their funds to 4 different liquidity mining pools.
- Exeedme offers NFT’s for gamers to get rewards. It has a native token named $XED. It was established on the Polkadot software. It conducts different tournaments where players can showcase their gaming skills. XED tokens are offered for each match. A video referee facility is available to prevent chances of cheating. The dashboard displays the statistics, ranking, and the XED tokens earned by the users.
The Cryptocurrency industry will achieve more milestones in 2021 with more interest expected from institutional investors and banks. Ambitious projects are being developed to strengthen the overall ecosystem. Integration with more real-world assets will add to the credibility of the industry and lead to massive growth.