Quick summary:
- 2020 will go down in crypto history as being the year of DeFi.
- Several DeFi projects have made the headlines due to their popularity amongst Yield Farmers.
- They include Compound, Yearn, Yam, Curve and Just, just to name a few.
- With new DeFi projects being launched every day, the future of DeFi solely rests on the ability to keep these projects attractive to Yield Farmers.
After the Coronavirus crash of mid-March, the crypto-verse entered a state of limbo despite the Bitcoin halving being only a few weeks away. The latter event had been projected as being a catalyst for a crypto-wide bull run that would reignite retail and institutional interest in the digital asset industry.
What many investors had not realized, was that a bigger catalyst for a crypto-wide bull run was in the making. This catalyst was DeFi.
In the second and third quarters of 2020, several DeFi projects have risen to prominence as shall be elaborated.
Compound Finance (COMP)
Compound Finance (COMP) was one of the first projects to shift investor focus away from Bitcoin due to the handsome investor earnings through Yield Farming. By lending out digital assets through Compound’s liquidity pool, investors instantly start earning continuous compound interest.
Furthermore, in June, the COMP token was listed on Poloniex thus causing a spectacular increment in value from $55 to $385 (600% in returns). COMP was then listed on both Coinbase and Binance soon after.
It is with the latter fact of COMP being listed on prominent exchanges such as Coinbase, Binance and Poloniex, that solidifies Compound Finance’s presence in the DeFi arena for 2020.
Furthermore, according to DeFiPulse.com and at the time of writing, $801 Million in digital assets is currently locked in Compound finance thus providing more proof that investors are confident about its future.
Yearn Finance (YFI)
With a circulating supply of 29,961 YFI, Yearn finance has taken the crypto-verse by storm. Due to demand, the value of the token has managed to skyrocket past Bitcoin’s current value of around $12k. At the time of writing, YFI is trading at $14,500 and after hitting an all-time high value of $16,700.
The success of the YFI token is one reason that Yearn Finance is a top DeFi project for 2020. Over $750 Million in total value is locked in the DeFi project. YFI has been listed on major exchanges such as Binance and Bibox thus providing legitimacy for the project.
Additionally, Yearn’s decentralized ecosystem aggregates lending services such as Aave, Compound, DyDx and Fulcrum to optimize token lending. Depositing funds into Yearn means that they are rebalanced to choose the most profitable lending service.
Yam Finance (YAM)
The story of Yam Finance (YAM) has a few similarities with DogeCoin’s in the sense that the project was launched as an experiment. The creators of Yam Finance even warned investors that its code was yet to be audited but by the time YAM experienced its first hiccup, over $477 Million was already locked on the DeFi platform.
The fact that its creators have learned from their mistakes and started the process of migrating to YAMv2, proves that it is a top project for 2020. Its migration contract has been audited by PeckShield and YAM finance looks set to have another go at the DeFi arena.
Migration from YAMv1 to YAMv2 is now live, please see below for more information.
Migration will be possible for all v1 tokens for 72 hours, from 4:20PM UTC 8/19 to 4:20PM UTC 8/22.
After the deadline, migration will be impossible.https://t.co/eSqrVfFnx9
— Yam Finance (@YamFinance) August 19, 2020
Curve Finance (CRV)
Like Compound, Curve Finance (CRV) rose to prominence in the third quarter of 2020. At the time of writing, approximately $1 Billion in assets is locked in the platform. Launched in January of 2020, Curve allows its users to trade between stablecoins with minimal slippage and low fees.
Its liquidity pools are provided by Compound and Yearn Finance thus providing the necessary volume to allow for efficient swapping of assets on Curve. With the Ethereum network being a beehive of activity leading to high gas fees, Curve provides the perfect solution for those looking for a safe and cheap option to convert between stablecoins.
Curve Finance can be considered as the UniSwap for stablecoins. Currently, the fee on all pools stands at 0.004% and there is no admin fee thus providing incentives for crypto traders to prefer Curve Finance.
Just (JST)
All the above popular DeFi platforms are built on the Ethereum network and the Just (JST) DeFi project breaks away from this pattern for it is built on the Tron (TRX) network.
The latter protocol is the reason Just (JST) is a DeFi project to consider this year. The Tron network is extremely fast when compared to Ethereum at its current state. Furthermore, transactions on the Tron network cost next to nothing thus catching the attention of DeFi investors who are looking for lower fees and faster speeds.
Key to the future of Just (JST) is the JustSwap decentralized platform that allows for the seamless exchange of TRC20 tokens in a manner similar to Ethereum’s UniSwap.
All the developments surrounding the Just (JST) ecosystem are through the efforts of Justin Sun and the Tron Foundation. Mr. Sun is known for his unrelenting work ethic and he has decided to go all-in on DeFi as explained in his most recent letter to the Tron community.
TRON and Just team are going All-In on the DeFi ecosystem. We will not back down until we see the decentralized financial revolution end in triumph. I have faith that as long as we race against time and keep upgrading our products, JustSwap will one day become the powerhouse of 100x cryptos and TRON will build a DeFi protocol that parallels Ethereum’s.
Conclusion
Summing it up, 2020 will go down in crypto history as being the year of DeFi. During the second and third quarter of 2020, several DeFi projects have risen to prominence due to their ability to attract Yield Farmers and the vision of their creators.
The five projects of Compound, Yearn, Yam, Curve and Just stand out from the rest but as time goes by, new DeFi projects will be launched that will enhance these protocols as was seen with the ICO boom of 2017. In the weeks and months to follow, Yield Farmers will be spoilt for choice as they migrate their capital to the newest and most attractive DeFi platform.
As with all analyses of DeFi projects, traders and investors are advised to do their own research. Furthermore, chasing the newest DeFi project poses a significant financial risk as seen with the initial collapse of Yam Finance due to a bug.