A detailed explanation of popular DeFi projects
DeFi is hot and cold for a while. But it is often noticed when the fire is on, but at this time the meat is no longer edible.
How can we better eat meat? Hence this article.
This article will explore the characteristics of DeFi’s wealth encryption from four aspects:
1. DeFi product development path, transplanting traditional finance
2. The list of DeFi products is rich and colorful
3. DeFi product classification with clear focus
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1. DeFi product development path, transplanting traditional finance
The prelude to the DeFi world starts with the decentralized lending business. Gradually transplant the financial components of the traditional financial world to DeFi, such as decentralized exchanges, decentralized insurance business, decentralized derivatives, decentralized index funds, etc.
In other words, anything in the traditional financial world that can theoretically be realized through smart contracts will be staged in the blockchain world in the form of DeFi. This is also the path of innovation, that is, to improve and optimize step by step on the original basis. Gradually, there are innovative products that are not available in the traditional financial world.
In other words, the trillion-dollar market for financial derivatives is the potential overall market for DeFi. At present, the DeFi market size is only more than 2.4 billion US dollars, and the future space is also very large.
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2. The list of DeFi products is rich and colorful
The picture above is a list of DeFi products organized by defiprime. Here are a few websites for querying DeFi information:
1) DeFi market capitalization ranking list query:https://defimarketcap.io/
2) DeFi market mortgage asset query:https://loanscan.io/
3) DeFi dynamics and product inquiries:https://defiprime.com/
4) DeFi product overview query:https://defi.dapp.review/ or https://dapptotal.com/
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3. DeFi product classification with clear focus
I have consulted a lot of information. Regarding the classification of DeFi, I have seen the classification of two dimensions: 1. Classification by function; 2. Classification by use.
The above two categories are described in detail below.
1. Classification by function
From the functional classification, DeFi can be divided into 6 categories, as follows:
2. Decentralized exchange (DEX)
2. Decentralized exchange (DEX)
3. Stable currency
4. Loan agreement
5. Anchored assets
6. Oracle
The DeFi products corresponding to these 6 categories are as follows:
3. Classification by use
3. Derivatives (options and futures market)
1. Mortgage lending (leverage)
2. Decentralized Exchange Tokens
3. Derivatives (options and futures market)
1) Mortgage lending (leverage): Maker is a signature product in this field. You can borrow a certain amount of DAI (stable currency) by mortgaging Ethereum. It can provide some lending financial services. For example, if you don’t want to sell coins for urgent money in the short term If you miss the bull market, you can use this method, use the money first, and then redeem the coins later, but now most of them are also used as leverage.
Coin-issuing projects: Maker(MKR), Aave(Lend)
Coinless projects: Compound, dYdX, bZx, Nuo network
2) Decentralized exchange tokens: Similar to platform tokens, they mainly represent some rights and interests on the platform, and mortgage sharing.
Projects that issue coins: 0x(ZRX), Kyber(KNC), Loopring(LRC), Bancor(BNT)
Projects without coins: Uniswap, 1inch
3) Derivatives (options and futures market): This is not the same as the leverage generated by mortgages. It is closer to the margin-based contracts played by exchanges, and they are moved to the chain. In addition, through such tokens, Other assets in reality can be synthesized, such as gold, stocks, etc.
Projects that issue coins: Synthetix (SNX), UMA, Opyn (Opyn)
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4. Multi-dimensional comparison to find out the wealth code
For the above two classifications, from the perspective of making money and seizing opportunities, it is better to choose the classification based on usage. The following is a classification of mining wealth codes in terms of usage.
DeFi Market Value Ranking
Among the top 10 DeFi projects by market value, there are 3 mortgage lending projects; 4 decentralized exchange tokens; and 2 derivatives projects. Therefore, from the perspective of market capitalization, the number of decentralized exchanges is the majority, followed by mortgage lending, and finally derivatives.
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The abscissa is the market value range, and the ordinate is the range of rise and fall from January to June
Among the top 10 tokens of DeFi tokens:
1. Mortgage loan: 1, for lend;
2. Decentralized exchange tokens: 6, KNC, LRC, BNT, AST, REN, IDEX;
3. Derivatives: 2, GNO and POLY.
It can be seen that in the field of DeFi, although the decentralized exchange is not the largest in market value, it has the largest market value in the top 10 rankings. Among the top 10 risers, 6 are decentralized tokens.
Let's look at DeFi from the wealth code given by Coinbase.
Coinbase announced that it is reviewing 18 new digital assets, including Aave, Aragon, Arweave, Bancor, COMP, DigiByte, Horizen, Livepeer, NuCypher, Numeraire, KEEP Network, Origin Protocol, Ren, Render Network, Siacoin, SKALE Network, Synthetix and VeChain.
Among them, there are 5 projects on the DeFi track: Aave, Bancor, COMP, Ren, and Synthetix.
Among these 5 projects, there are 2 mortgage lending projects; 2 decentralized exchange tokens; 1 derivatives project.
Judging from the market capitalization rankings, growth rankings, and wealth codes given by Coinbase, decentralized exchange tokens have greater advantages over lending and derivatives.
4. DeFi gains growth
1. Unlimited Quantitative Easing (QE) -> BTC/ETH
2. ETH growth<->ERC20 growth
3. ETH growth<->DeFi gets growth
4. DeFi gains growth<->DeFi Token Growth
5. DeFi tokens with large market capitalization<->Small Cap DeFi Tokens
So far, most of the funds have flowed from large-cap DeFi tokens to small-cap DeFi tokens to decentralized exchanges.
