Besides liquidity staking, what other DeFi narratives deserve attention?
Compilation of the original text: Deep Tide TechFlow
Compilation of the original text: Deep Tide TechFlow
Liquid Staking Derivatives (LSD) ushered in explosive growth:
$LDO + 114%
$RPL + 89%
$SWISE + 128%
$FIS + 74%
$SD + 165%
Are you feeling FOMO? But please don't buy at the top of this narrative. Instead, we should identify upcoming trends.
Here are 5 DeFi narratives that could take off in a similar fashion in early 2023.
zk-EVM (and zk-rollups)
2022 is the year of Optimistic Rollups, Arbitrum and Optimism are growing rapidly in terms of TVL and user dominance compared to the copycat L1.
zk-EVM utilizes zero-knowledge proofs, so it also has great potential for scaling.
The recent hype surrounding the upcoming launch of zkSync, and their ability to raise close to $500 million in funding in a bear market, speaks well of the excitement around this.
I'm personally following closely:
Upcoming ecosystem (launch of new projects, potential airdrops and migration of the protocol);
zk-SYNC token release;
The case for other zk-EVMs.
OpFi (Decentralized Options in DeFi)
GMX leads the wave of decentralized perpetual transactions in 2022. Many of the native tokens in this sector saw gains of over 300% in the last year.
Decentralized options are inherently more complex, but may see big adoption in '23.
"OpFi "It refers to using options as the back-end infrastructure of DeFi, rather than a market trading tool like Tradfi.
OpFi = DeFi infrastructure driven by options, the Dopex team is working on developing multiple OpFi products.
stable currency
Stablecoins remain one of the biggest industries in the crypto space. Decentralized stablecoins were the biggest narrative in the first half of 2022, but an unfortunate incident brought the entire narrative to a halt.
In the years to come, stablecoins are likely to continue to evolve. Therefore, there is a lot of upside in being able to develop robust, liquid stablecoin protocols.
These agreements include:
✥ Fraxfinance：It has strong liquidity due to its $CVX position and a series of DeFi products such as Fraxlend and frxETH. Watch $FXS in 2023.
✥ CurveFinance：Coming Soon $crvUSD -> Overcollateralized using LLAMA (Lending-Liquidation AMM Algorithm) with liquidity pools.
✥ Aave：Coming soon to $GHO (also overcollateralized).
✥ Redactedcartel：Coming soon to $DINERO (over-collateralized by ETH LSD). They also launched their own $ETH LSD.
✥ Dopex：$dpxUSD coming soon (with $rDPX and $dpxETH as collateral for the upcoming $ETH LSD).
real income
While I think the term is overused in 2022, the backside of GMX's success proves that people who stay in the crypto space actually care about token economics, i.e. token inflation, fees, revenue models, etc.
Protocols with real demand and revenue + token value accumulation could outperform if the market overall remains bearish. The main problem with this model (fee distribution revenue) is that it is very similar to securities. There are some potential regulatory headwinds to be wary of.
AI
I'm not a big fan of the metaverse bull run in late 2021, and I agree that many AI tokens are approaching price ceilings.
However, the technology is just getting started, and since cryptocurrencies are so accessible, it's worth keeping a close eye on this narrative.
