Decentralized Finance (DeFi) protocols have accumulated a total value locked (TVL) figure of $16.1B and feature a combined market cap of $20B. Now, investment into major DeFi protocols has raised the net worth of many individuals who were savvy enough to capitalize on the new opportunities and minted new millionaires. With the DeFi fever at all time high and major developments happening across, we thought that it’s the best time to introduce five DeFi protocols which show tremendous potential and are likely to soar higher in the coming days.
5. SushiSwap – $1.16B TVL
A forked version of the famed Uniswap – SushiSwap is an orderbook-less liquidity provider decentralized exchange. It offers better incentivization and integrations with the Yearn ecosystem, allowing it significant capability upgrades and better long term value aggregation. SushiSwap allows liquidity providers (LPs) to earn SUSHI tokens for providing liquidity, it’s a governance token ensuring that all participants have a chance to shape the protocol’s form and function.
The team was earlier criticized for initiating the so-called “vampire attack” on Uniswap and for the sale of millions of worth of tokens for ETH (which were eventually returned after the community backlash). However since then, SushiSwap has changed it’s course and started a new chapter in the journey. It joined the Yearn Finance ecosystem recently and is on it’s way to release new products in the future.
4. Yearn Ecosystem Token Index (YETI) – $7M TVL
Featuring effortless investing facility into Yearn Finance ecosystem projects, YETI is an index fund featuring a total of 8 projects namely Yearn Finance (YFI), Sushiswap (SUSHI), C.R.E.A.M. (CREAM), Akropolis (AKRO), Cover Protocol (COVER), Concentrated Voting Power (CVP), Keep3rV1 (KP3R) and Pickle Finance (PICKLE) at varying weights. It saves users from the hassle of finding promising projects and having to invest in them one by one.
Yearn Ecosystem Token Index (YETI) automatically purchases the underlying tokens (according to the weightage determined by the governance) when ETH, individual or multiple tokens (already part of the fund) are provided by the user, though a clean and intuitive user interface. It also allows users to stake YETI tokens for more profits. It’s a no-brainer for people looking for simplified investment and fund management.
3. Power Pool – $11.8M TVL
Power Index is a serious-natured and fundamental DeFi index fund. It features only the essential, established and time tested protocols. The native token is Power Index Pool Token (PIPT) which derives value from underlying Aave (AAVE), Yearn Finance (YFI), Synthetix (SNX), Concentrated Voting Power (CVP), Compound (COMP), Wrapped Nexus Mutual (wNXM), Maker (MKR) and Uniswap (UNI) in varying weights. It’s also used for governance and staking.
The index fund is a typical example of an industry benchmark for investments and analysis. As such long term investors will find value here with 1-click no-hassle investing. Like YETI, it enables buying with ETH, individual or multiple assets contained in the fund. It is more suited for more fundamental investors with a long term outlook, looking for value accrual and root level investment hypothesis.
2. Yearn.Finance – $421M TVL
The flagship project of the Yearn Finance ecosystem, Yearn Finance (YFI) needs no introduction. It is an automated yield generation and harvesting protocol, driven by multiple strategies involving nearly all key DeFi protocols. The project was launched by developer Andre Cronje and has returned over 500x ROI for the early investors through YFI token appreciation! It features a robust on-chain governance involving YFI voting power and multi-signature wallets.
Yearn.Finance is all set to launch it’s v2 version before the end of 2020. It will likely enhance the value of the project’s treasury and that of YFI token beyond previous all-time highs. A few vaults for the next iteration have been released and the remaining deployment is expected to be completed in the coming weeks. Because of it’s developer base and a vibrant community, Yearn.Finance isn’t exactly hard to recommend.
1. Cover Protocol (COVER) $43.9M TVL
An enhanced type of the Nexus Mutual DeFi investment protocol, Cover Protocol protects users against smart contract risks (exploits, hacking etc.) by setting up a market-determined coverage price for insuring against loss or theft. It does so by providing peer-to-market with fungible tokens. The market makers deposit collateral to receive claim or no claim tokens, which can be either staked for yield or sold for premium to coverage seekers.
Though Cover Protocol is a recently launched project, it shows great potential to dethrone Nexus Mutual by offering a more flexible design and features than it’s predecessor. The protocol has exhibited rapid growth in TVL and COVER token price appreciation. Since, DeFi is a relatively nascent field with lots of risky experiments and untested code, the insurance industry is set to thrive in such environment and Cover Protocol will likely benefit from that massively.